Ernest Hancock

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More About: Precious Metals

Time to fill the trucks with Silver?

(From a firend...)
Just my 2 cents worth here. If you look at the silver chart here:

(symbol: $silver   Periods: Weekly    and scroll down to choose Range: 
3 yrs)


Notice that silver took about nine months to break through resistance at $20 in August 2010; prior to its run-up into April 2011.  Often times when such a breakout occurs a commodity will re-test that resistance point to find support.  Today's weakness in silver ( -$2.50 to $31.50 spot price) looks like we are heading for some sort of downside test. 
Initial support looks like trend support around $25, then the 200 moving average around $21, then the $20 area mentioned above. In any event I expect the move down to be swift and breathtaking.  A metals bull market always tries to scare the be-jesus out of the bulls before it resumes.

In my opinion anything below $30 is a bargain. If you see $25, back up the truck. If you see $20-$21, back up two trucks.  Once this correction is over the move up (I think lasting 6 months to a year) will take us past the $48 nominal high of 1980 and last April. Once that happens I believe the next stop is $100.

Note: None of this bodes well for the euro or the dollar!

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