Silver’s 2011 big move: Was it the end or the beginning?

“I see no evidence to suggest that anything we’ve seen so far was the end of the Silver bull market, so I am expecting a very powerful upleg yet to unfold.”

Silver Price Forecast 2012: Silver Likely To Make Explosive Move
The price of a good often behaves in a similar manner at or around the same kind of milestone. An example of such a milestone could be a significant top. Price often forms a similar type of pattern at different significant tops—different in terms of time of occurrence. This is a reflection of how market participants themselves often behave in a similar manner when faced with the same kind of situation. This of course makes perfect sense, since it is normal, for example, to rest after you have been extremely busy for a while. For most people, this is true whether it was yesterday, or in 20 years.

In the current silver market, there are some similarities as compared with the 1970s. There are also things that are much different today, in the economic landscape, compared with that of the 1970s. One of the significant things that is different now is the fact that debt levels, relative to GDP, are extremely high compared with the seventies.

In my opinion, this is one of the main reasons why we are likely to have a massive Depression this time around.

Here, I would like to illustrate how the silver price behaves in a similar manner, today, compared with the 1970s. Below is a graphic that compares the silver price chart of January 1978–August 1979 to the period from January 2009–present (charts generated at barchart.com):

I chose these timeframes because price broke out of the significant high (for the relevant decade) around these periods. I have drawn a blue line at the level of the relevant significant high.

Note how the run-up to the blue line is visually similar in both cases. After going through the blue line, price rallied significantly until it peaked at point b (in both cases). It then corrected/consolidated forming a flag/pennant type formation.

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Tags: price of silver, Silver, silver analysis, silver futures, silver futures prices, silver news, silver price, silver price 2012, silver price forecast, silver prices, silver spot, spot silver

Posted by Silver Guru on Jan 20 2012. Filed under Silver Analysis. You can follow any responses to this entry through the RSS 2.0. You can leave a response or trackback to this entry