Silver Short Squeeze in Progress
A few weeksago, I alerted you to the bullish situation being created in the silver marketsince the global equity panic ended on February 9th. A few hoursago, the silver price began to take off like a scalded cat without anyrecognizable catalyst, other than the reasons I spoke of in this article. Based on the extremebearishness of the speculator positions in the latest silver Commitment ofTraders report, the price of silver can rally very quickly and far beyond whatfundamental and technical analysis projects."
This silvershort squeeze could easily drag gold along with it and break the safe havenmetal out of a huge rounded bottoming pattern which has been building below$1375 for nearly five years. The rounded bottom in the GDX, which I alerted you to last week, may have been the warning of thesebullish developments taking place this morning.
If you havepositioned yourself accordingly while this set-up was taking place, I would stronglyadvise ceasing to trade until the sector becomes extremely overbought on aweekly basis.
By David ErfleContributing tokitco.com
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