Over the past few weeks we've analysed the Gold/Silver ratio, the correlation with month ends and moon phases and yesterday we took a look at the COT report and the Speculator and Commercials longs and shorts.
Let's take a step back and have a straightforward look at the 2 year daily chart. Throw in a couple of lines and what do you see? Most certainly we have a large wedge formation that began at the start of the new bull market in late 2015, if indeed it is a bull market. While at the same time it seems that gold has broken out and is steadily on the rise, silver, for some reason is being stubborn and frustrating investors (as it so often does) by continuing to consolidate for much longer than it should. Taking a closer look at the more recent price action we seem to have another wedge within a wedge forming signalling that the price action is on the edge of either a break out or a break down. Looking at silver alone it would be difficult to make a prediction as to which way it will turn, but taking other factors into consideration (as have been discussed in previous posts) my money is on a major break out. The price action that we saw tonight is a precursor for the big move that lies ahead. Remember though, silver is a petulant metal, and just when you think it will reward you handsomely, it will often rip your face off!!
For disclosure, I'm not a professional financial advisor and this is not investment advice, merely my own observations of the market and indexes, so do your own research.
