Last Monday I posted a chart of Silver suggesting that Silver's battle for independence would begin at $36.25 with a possible short squeeze triggered at that price point. Silver has responded admirably to it's call to arms. Silver slipped right past resistance at $36.25 and roared right up to the Silver bears first line of defense at $36.75. The battle for Silver's independence will be joined here by bulls waiting on the sidelines to "buy the dip" from this level as weak handed longs gladly dump positions and "break even" at this price they put on two weeks ago expecting a breakout then. They may be sorry...
The charts posted below make the long and short-term case for an imminent Silver breakout this month...contrary to the "summer doldrums" crowd. Silver at $35.50 is the key to the whole Revolution...that was the spark as it is the 50% retracement of the run Silver made from $21 last Fall up to near $50 this Spring. As Silver clears resistance at $36.75 it should encounter another skirmish around $37.84. Expect another dip buying opportunity as more weak handed longs look to dump positions happy to break even once again.
Once Silver clears $37.84, prepare for a Revolutionary fireworks show near the $39 price point. This is where the Bulls are sitting to pounce on the Bears. I do not expect to see the $39 level fall before mid-August...however in this Silver market, you never know what might occur.
I'll let the charts tell the rest of the story:
Weekly Silver Chart: https://4.bp.blogspot.com/-nvcfL3s2TmM/ThpMnJKPZPI/AAAAAAAAB8I/Lt45rUzEpUg/s1600/Silver%2Bweekly%2B7-10-11.bmp
8 Hour Silver Chart: https://2.bp.blogspot.com/-p1l2L27Gi3g/ThpMmy6mPTI/AAAAAAAAB8A/tYJsO445fpk/s1600/8hr%2BSilver%2B7-10-11.bmp