The purpose of this update is to celebrate and mark silver's powerful breakout from a giant base pattern that started to form as far back as 2013–2014, a breakout which has only happened during the past few days, July 21 and July 22, with Wednesday's advance finally seeing it break clear above the resistance at the upper limits of the base pattern. While this doesn't mean it can't drop back again, it makes it less likely, and even if it does, it is likely to soon turn up again.
Quite clearly, when you are only two days into a bull market that is starting after the completion of a six-year-long base pattern, the probabilities are very high that it has much further to go, both in respect to time and magnitude of advance.
Wednesday's breakout may very well have been triggered by the bellicose actions of the U.S. with respect to China in closing its embassy, or whatever it is, in Houston, which is a continuation of an increasingly hostile attitude to China, based on the U.S. attempt to tear down what it views as its main rival for global dominance.
Now, with its economy getting ever closer to imploding completely, the U.S. is looking to direct the mounting anger and frustration of its population toward a manufactured external enemy, which is what politicians always seek to do when their backs are against the wall.
Wednesday's action was another step on the road to a major war, which is a normal consequence of economic depression. In addition to that, we had the ludicrous and laughable assertion that Russia has been trying to hack coronavirus research secrets, which is just another irrelevant distraction.
Regardless of what actually triggered the breakout, it was a valid and powerful breakout, as we can see on the charts set out below.
Not surprisingly, the effect of silver's breakout on all things silver was electrifying, with a good example being shown below, Kootenay Silver Inc. (KTN:TSX.V), which is a silver stock we went for back in May because its charts looked so strong, and which is already up 50%.
This is a very good juncture at which to watch Mike Maloney's interesting and insightful new video on silver entitled Silver Soars–Where to Next?
Originally published on CliveMaund.com on July 22, 2020.
Clive Maund has been president of www.clivemaund.com, a successful resource sector website, since its inception in 2003. He has 30 years' experience in technical analysis and has worked for banks, commodity brokers and stockbrokers in the City of London. He holds a Diploma in Technical Analysis from the UK Society of Technical Analysts.
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Charts provided by the author.
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