Silver breaks out!
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The market was resilient today. It kept going higher and higher and higher all day long and it was up another $1.00 today. These kind of moves makes Joe (aka silverfuturist) very excited and it will make me smile to see him so happy about the move. However, the $31.40 level that was big resistance was taken out today. What I would like to see silver do is correct through time for a few hours and find support at the previous resistance at $31.28. This was the high that started 2011 off with and then start moving a lot higher from there.
For those whom are not aware, fibonacci upside is a tool used to predict where charts have the potential to go towards. The calculation used for Silver takes the $4.00 bottom from a decade ago and the $8.00 double top you will see in the image below. The math formulas below give us the following targets:
(HIGH-LOW) X FIBONACCI + LOW
Level 1 (8-4) x 1.618 = $10.47
Level 2 (8-4) x 2.618 = $14.47
Level 3 (8-4) x 4.236 = $20.95
Level 4 (8-4) x 6.854 = $31.40
Level 5 (8-4) x 11.090 = $48.36
The psychology of hitting the $31.40 last January and only having a small retracement to $26.30 is very strong for Silver. If resistance is not met at these key levels or the resistance is very light, then the probability odds state a fast move to the next key resistance mark. This is the $48.36 level which is next on the horizon for Silver. Today is only the break of the level and is a small pierce above it by only a shade over 1% thus far, but when you mix in the fundamentals for silver within' the technicals there is reason to get excited about this rally as it seems poised to keep on breaking through to big gains.