I have found Mr. Karim to be correct more often than not, and more so on his very long term observations, which I define as 2+ years. I have linked to his recent twitter post regarding the implications for much higher silver prices after the recent breakout, pay particular attention to his “volume defined base”, and the fact this indicator suggests its potentially clear skies ahead, up to the $40 level conservatively, or the $62 level on the metal if things get bonkers. Bookmark his site, they do some fine charting and get the long term trends correct.
#Silver is coiled & tight above its 36 month moving average, enabling it to explode in price much higher before crumbling down.
If it was to reach previous peaks of #Fomo, then greedy 40$ and 62$ targets are on the table.
The chart below shows weekly data for the last 10 years. After a signifcant run out of the 2020 lows, cotton futures manages to triple over the next two years. Then we get the classic correction, followed by a correction lasting roughly a year and a half. Corrections can last longer, sometimes even three years, but the recent breakout early this year suggests the correction might be over. In that case we wait for a pullback to the breakout are of 90, then start acquiring a position. I am looking to add cotton futures for myself and client accounts in this area where it currently sits in the 88 region. As always, position sizing is the most important aspect of trading, and cotton has a weekly ATR (average true range) about $4.60, so size accordingly, knowing each contract trades in roughly a $2,300 range each week.
Today was the best day of the rally so far, with accounts jumping 7.5%-10%, after an already stellar month of March. Notice the huge volume flowing into the SLV etf, which I only for charting purposes, I do NOT recommend anybody invest in this particular etf for silver exposure. Much better to buy physical metal, miners, and the PSLV etf (Sprott physical silver fund). While the metals and miners are getting heated in the short term, there is a LOT left in this bull. It will be something to behold, and most have not yet gotten involved. At this stage of the bull, all dips should be bought, as they typically don’t last long.
The $HUI gold miners index shows lots of potential upside, once it can get back over it’s 200 week moving average in the 257 area. A move just back to the 2020 highs would be 51% from Thursday’s close, and seems highly likely to me. From there, if miners and metals can continue making new highs, we should expect to see the highs on the monthly chart taken out. The down trend line on the monthly chart, no matter how its drawn (bars to bars, or wicks to wicks), illustrates how important this current area is, with a move above 260 or so on both charts having big implications for the upside potential and probabilities. Testing the monthly chart high made back in 2011 would be 158% gain from yesterday’s close of trading, and that is just the bigger miners, the mid-caps and juniors should double those returns or more.
Ratio charts by definition cannot go forever in one direction or the other. With that in mind, take a peek at the PPO and MACD on the longer term chart of SILJ:SLV, after testing the horizontal support going back when SILJ was first introduced, we observe both indicators about to cross and turn higher. It’s not too late, the miner have lots of catching up to do!
On top of the already substantial gains the gold and silver miners have made, we see action like today with leaders such as Royal Gold, symbol RGLD. The first chart is just seven months of data, to easily show the magnitude of today’s move. The second chart goes back to early 2022, so we can see what happened the last time RGLD acted similar, noted by the blue arrow. It was the start of a 33% move over just 6-8 weeks. Buckle up!
The down trend in this ratio was broken convincingly earlier this month, suggesting it was time for the silver mining stocks to outperform silver, which has occurred. Today, it’s good to see a strong bar higher, boosting the ratio over its 200 day moving average, after dancing around on either side of it the last several days. It’s still early in the move, and once the ratio can turn, all its moving averages to trending higher, the silver mid-cap producers and juniors will really fly.
The precious metals miners group in general is performing quite well, with stocks like EXK, FSM, NGD, JAGGF, and AYASF all making new recovery highs, with many others very close to doing so, such as GATO and SVM as they hang up near their recent new highs. Today we also saw GDX make a new recovery high, with GDXJ, SILJ, and SIL all in hot pursuit. Even recent laggers AG, PAAS, HL, and MAG are in the game again, MAG is up just under 10%, while AG is back over its 200 day MA, with PAAS and HL looking to do the same, as they sit just under their respective 200 day MAs. All in all, the move looks great, more so because its hardly getting any press, its still as if nobody cares! These have a long way to run, in my opinion.
Just a quick chart that shows silver nearing oversold stochastics, along with possible support levels as defined by a horizontal trend line, and fibonacci retracements, suggesting the metal could be nearing a turn higher again. It already touched the horizontal trend line, and the classic 50% fib retracement is not far below around $24. I would certainly take a close look at which miners to add to, if we get a weak opening on Monday. Some of my miners are holding up extremely well, including JAGGF, NGD, SVM, CDE, GATO, AYASF, EQX and FSM just to name a few.
There are many similar charts across the precious metals mining group, today I just picked two that seem notable, but most of them exhibit similar developments. First, SVM appear to have broken its long downtrend, the next step is to start a sustainable uptrend, which I am confident it will.
Then we haver FSM, going back even longer we see the general support area where it seems to always get a good bounce, and more interesting, about every four years its not just a bounce, but a 400-600% run to the highs in short order. Furthermore, this last trip lower towards the trendline, FSM wasn’t able to make it all the way down there, suggesting the path of least resistance is higher. I am looking for this miner to take out it 200 week MA (the red line above current price, which would be a nice gain in itself), for a sign that the stock is again headed up to test its all time highs. That would put another 500% or so gain on the board, and the gains happen very, very quickly, one has to be in them BEFORE the move starts, because they become quite difficult to buy once moving, and especially in big size, since they can have 10% drops overnight here and there along the way to making those stellar gains. I will add to both of these miners, and many more, into good sized pull backs that bring them down to their 10 WEEK MA’s, or near their 50 DAY MA’s, or 200 DAY MA’s, all over which are good enough areas to add.
