Silver Market Update
Originally published February 25th, 2007.
Although silver did not stage such an obviously important breakout as gold last week, it did nevertheless rise in tandem, and succeeded in breaking out above important resistance at its early December highs, putting it in position for "The Big One", which will be the breakout above last year's highs at about $15.20, which is an objective that silver, with its propensity for big moves could easily achieve in a single day from the current position.
We had earlier looked to delineate a 3-arc Fan Correction in silver to match the one in gold but didn't find a truly satisfactory fit. Now, however, after last week's action, we have it. On the 14-month chart (the time period for which was selected to allow last year's high to be viewed without interference from writing on the chart) we can see how a 3rd fanline drawn from last year's highs across the early December highs is what created the resistance that caused silver to start rolling over the week before last before it suddenly blasted higher in tune with gold last week.
Having broken out above the resistance at the December highs, in the process breaking out above the 3rd fanline of the 3-arc Fan Correction, silver has arrived at the threshold of "The Big One". Silver is now very well placed to stage a breakout above the highs of last year, an event that could well involved a $1 - $1.50 up day, which will mark the start of a powerful uptrend.