James Turk - Bullish Flag Pattern to Quickly Send Silver to $70

With gold, silver and stocks all moving strongly to the upside, today King World News interviewed James Turk out of Spain to get his take on what is happening.  When asked about the action in gold and silver, Turk responded,“What a great way to start the week, Eric.  This move is going to catch a lot of people by surprise as evidenced by the extremely low sentiment readings.  Those low readings are a clear indication that there is a lot of money on the sidelines that is waiting to jump on board.”

James Turk continues:

“That money will come into the market like a tidal wave with just a little bit more upside progress.  Importantly, I think we are going to see more upside progress as we work toward the end of the year.  There are two important developments from a technical perspective.  

he first we have already spoken about, namely the bullish flag pattern on the weekly silver chart (above).  When silver breaks out to the upside, this flag measures to a target price of around $68 to $70.  More importantly, the jump out of the flag should happen more quickly than the $18 to $50 move we saw back in 2010 and early 2011, which took about nine months....

“The other important technical point is the bullish non-confirmation between gold and silver.  Silver made a new low in September, below the price reached in July.  Gold, however, did not.  This bullish non-confirmation is giving a clear picture that gold is ready to move higher.

If it was going to break that July low, gold would have done it by now.  So taken together, these two developments are very bullish and suggest much higher prices in both gold and silver over the next few months.

During a big correction like the one we’ve just gone through, a lot of weak hands get shaken out of the market.  We know that has happened because of the change in open interest and also because of the smaller volumes of late. 

The bottom line, Eric, is that the market is now dominated by the strong hands.  The shorts have had their fun for the last six months, but now it’s time for the long to enjoy the ride.  Get ready for much higher prices.”