Wednesday Showdown: Silver Just Called Out The Cartel's Right-Hand Man Whose Name Is Seventeen

SD Midweek Update: Gold & silver are rallying into the open. Here's what to look for today and going into the end of the week...

Silver has shown strength overnight and into this morning:

If we can get a close above $17 today, that would be very bullish.

Why?

Well, silver has been stuck in this miserable channel for months on end:

Overnight with follow through this morning, silver has broken through the channel to the upside.

Now let's not get too excited - we know how the cartel likes to take us behind the shed and teach us lessons in sentiment.

But things are looking rather bullish this morning indeed.

Remember that massive spec net short position on COMEX silver? I have been saying for some time that if silver breaks-down or breaks-out, then we could see the specs rush to cover their shorts, and depending on how the cartel decides to deal with it, the short squeeze could be rather impressive. Furthermore, those who are only casually looking at the markets in general may not know of the bullish spec net short position, so they will see they might not recognize it as a short squeeze but a solid break-out, and the momentum could feed on itself in a virtuous spiral to the upside for a change.

Look, we know the metals are going higher. It's just the timing that can make or break an investor.

But We've gone nearly seven full years since the May Day Massacre in silver, and with the bottom that has been carved out, and with the base building over that last two-and-a-half years, we're right there on the precipice of the major silver break-out.

Are we finally seeing the start of that break-out?

We very well could be.

And this strength is coming off of a world that has suddenly found peace after living through the shortest military conflict ever. Which means, in the mainstream at least, sell gold (and silver).

Yet silver is rallying.

Now, if we can get above $17 and stay above $17 and close out the week above $17.50, this would be very bullish. On Monday I said I think that the sweet spot for the rally to begin in earnest is $18.50, and recall that in past updates, I have said that once we finally get back into the $17s and especially above $17.50, that we could be above $18 in a matter of days.

I don't want to get too far ahead of myself and start making $20 calls, but understand this: Silver can and has moved up dollar moves or more in single days, as recently as 2016, so if we have a couple dollar move days return, we'll be in the $20s in short order and testing those 2016 highs as well. That would be a serious confirmation of the bull market the mainstream would simply ignore, but would internally acknowledge.

We'll see.

Right now, silver has tons of room to run, both technically on the charts, and considering the spec net short position and the fact that as the specs are essentially going up the insider, manipulation and price suppression traders otherwise known as the commercials, silver really has room to run.

Gold has been rallying through the morning as well:

Looking at gold on the daily, we see gold's stout wall of resistance at $1360:

Granted it's a cartel enforced Berlin Wall of resistance in which every attempt to escape gets shot down.

But if gold can get above $1360 and stay above it to close, we will be fast on our way to that all too critical $1377 which we need to take the highs from 2016.

On Monday I said the sweet spot for gold would be $1380. That is what would get everybody excited again about the break-out as we would be at multi-year highs.

Again, not to get our hopes up and not to get too excited but things look bullish indeed.

Even the gold to silver ratio finally put in a 7-handle:

So with silver breaking-out today, we'll look for the ratio to start coming down.

These could be the last days of upper 70s lower 80s we see until the next great gold and silver bear market are at their end stages, but we are talking years if not decades from now anyway.

The point is the arbitrage play is still on, although it's not quite the fire sale it was just days ago, and if this silver rally isn't some break-out fake-out, then on a forward basis the fire sale won't even be as good as it is today.

Palladium has been on a tear:

Palladium is up eight days in a row.

Granted, palladium was in an official mini-bear market, so the recovery like we've seen is to be expected, because the broader metals are in a multi-year bull market that's just really starting to ramp.

The thing about palladium is that it got ahead of itself last year, which can explain why it took a greater than 20% hit since January.

Platinum is finally showing signs of life too:

Platinum looks poised to test the 200-day moving average, and if the other precious metals are going to rally, then platinum may not even test it but rather break right through it, and when that happens, the 50-day moving average is not too far above the 200.

If platinum can get above both of those moving averages and not put in the dreaded "death cross", then we will be looking at platinum bullishly again, which, like palladium, considering the broader metals bull market, is to be expected.

Copper is showing strength today:

As bad as the chart looks, the roll-over top looks spared, and we can still count a series, albeit ugly, of three higher-lows.

In all actuality, the cartel needs copper to rise in price, because if things are going to get fired-up in silver again, they're going to need all the mine supply they can get, and a healthy copper price helps assure a sufficient silver supply because most of the silver production in the world comes from mining in the form of bi-products from mining base metals, such as copper.

Crude oil is back above $67:

Everybody said crude was set to crash back down, especially after the shortest military conflict ever alleviated fears of supply constraints, well damage, or pipeline issues.

But the thing is - crude has been rising regardless, up from $42 just a year ago, and Syria had nothing to do with it, so five days of "action" in Syria isn't going to change what was already set in motion.

My call is mid to upper $70s by the end of the year, but mid $80s is not out of the question.

Despite all of this, the dollar is just sitting there in suspended animation:

If gold & silver are really going to break-out, then the dollar might find itself breaking-down from it's own channel of 89.50 - 90.50.

And the yield on the 10-Year is in suspended animation as well:

Since breaking out in mid-December of 2017, the yield has been range-bound between 2.8% and 2.9%.

It has long been my opinion that rates can't just drift higher gradually, and if anything, since the break-out, yield has faded.

The stock market has rallied:

The Dow broke-out above the 50-day moving average.

We'll see if it holds, because making sense of the Dow can be done in comparison with the VIX:

Call it down seven days in a row, but really it's a fade since the last mini-spike on March 22.

Bottom Line: Silver is looking to take-out $17 today, and with all the bullish fundamentals and technicals silver has going for it, we very well could be above $17.50 by the end of the week.

I'd take that.

Anything to get out of this stinkin' cartel imposed channel is a start., and once we get above $17.50, we'll be above $18 in no time.

Stack accordingly...

- Half Dollar