For those who missed the article or perhaps skimmed over it, we would like to dedicate a post specifically to 3 extremely bullish developments in silver (2 technical and 1 fundamental), which appear likely to power silver to The Doc's $70 target for 2011.
1. The first such technical development is a BULLISH crossover of silver's 50 day moving average crossing over its 100 day moving average. Please look at a 3 year silver chart, and examine what happened the last time silver's 50DMA cleared its 100DMA back in September of 2010 when silver was trading near $23/oz.
Jim Willie has noticed the same technical formation in the long term silver chart in his latest Hat Trick Letter out today, and looks for an imminent break in silver to $46 (the top of the rising uptrend channel) as a result.
2. Next is silver's open interest, which at 112,375 is pretty much at ROCK BOTTOM.
With an OI nearing 110,000, risk of a major raid or dip in silver is extremely low (although this is the jobs report week, so a short term raid on Thursday or Friday morning remains a possibility)
|Daily Settlements for Silver Futures (PRELIMINARY)Trade Date: 08/31/2011|
|Prior Day |
3. QE3. Whether the official announcement is made at the expanded September FOMC meeting, or in November in a replica of 2010, QE to INFINITY AND BEYOND is a given.
Look for silver to respond to additional QE in the same way it responded to QE1 and QE2: POWERFULLY.
We believe $46 (the top of the current uptrend channel) is an excellent short term target for silver, but look for silver to power past $50 early this fall, and then rapidly run up to $70-$75 once the all-time nominal high is convincingly taken out, much the same as silver shot from $22 to $50 once the bull market high of $21.35 was taken out in Sept 2010, along with a bullish crossover of the moving averages.
Look for silver to then correct and retest $50 (although it is quite likely that the correction will end short of the $50 technical target, possibly in the $55-$60 range).
Can you see how The Doc's $70 target for silver in 2011 is not just possible, but even likely?