Silver is in position to move strongly higher, if the bulls can push it up through the “D” target of a small pattern and then through the important prior high of 33.585. Yesterday silver broke out of its triangle with a modest but very impulsive rally. Only the rebound high of 33.585 remains, and a move through that level will probably be energetic. The midpoint of the small pattern shown in green on the attached chart has held silver down for the time being, and its “D” target of 33.475 is just below the key level. If that target is approached, bulls will almost surely gun for 33.585, and they’ll probably get it. If so, the next question will be how much damage they can do to the bearish look of the longer-term charts. In this potentially explosive situation, we don’t see any short-side trades that we can recommend in good conscience. The enemies of higher silver prices are now playing a goal-line defense. (Posted by Doug “harry” McLagan)
