Silver to $50?

It looks like this call was about right… as silver has accelerated its climb.  Next stop may well be $50, as that’s the old high from the Hunt Brothers episode in 1980.  Chris Kimble is targeting the same area as the likely next test.

USSIF, SNDXF and MILL have all held above their breakouts – SNDXF and MILL very comfortably so, USSIF not been able to fully clear the old high and is the weakest of those breakouts, though silver’s continuous churning higher may pull it into the clear.

I’ve been on the road a lot in recent weeks and unable to post much.  The U.S. Dollar continues to get pounded.  It formed a bullish wedge and threatened to bounce… but has now broken down to new lows.

I suspect that Dollar action is the key to figuring to where equities go next.  As long as U.S. Dollar weakness persists, equities have wind at their back to push higher.  At some point, Dollar weakness could lead to a fearful panic that hurts equities… but that day is not here yet, as the S&P is back to re-test its 2011 highs after support held at the old falling trendline.

It’s worth noting that small caps have lagged in this latest rally.  The S&P is retesting its highs from February.  The Russell 2000 is also testing its February high… but is still a few percent below the higher high it established earlier in April.  A turn for the worse here would put a head and shoulders pattern into play.

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