Let me start by saying that I am not a technical analyst. Consider the following to be for learning or entertainment purposes only.
If you take a look at the silver chart from last October, there appears to be a classic reverse head and shoulders pattern forming with a neckline in the $36-37 area. This is considered to be a very bullish formation. The difference between the head and the neckline is about $10, which is indicative of the size of the breakout once the second shoulder has been completed. If the formation plays out, it would mean somewhere around $46 silver in the mid to late summer time frame.
Is classic technical analysis relevant in today’s silver market? Can a reverse head and shoulders pattern overcome the summer doldrums? Stay tuned and find out…
Long term, the fundamentals look stronger every day with central banks around the world continuing to grow their balance sheets (the real QE) and bankrupt governments foolishly pursuing their panacea of endless debt.