Most writers in the gold community focus on the fact that silver tends to outperform gold in the later stages of a move, but the focus is more reactive, than predictive. I don’t think very many investors in the gold community who are silver buffs really understand what has just transpired in the gold and silver markets.

First off, gold has exploded from what I labelled a “michaelangelic” head and shoulders pattern and targets 1320 or higher, the same as the small ascending triangle.  Second, silver has yet to make a new high.  Again, the bears see this as a non-confirmation. Again I say, wrong. Quantitative Easing is accelerating and George Soros is pounding the table that the crisis is just getting underway.  Just starting.  Not ending.

Click HERE or on the image to view the analysis

Third, the bears have built themselves a horrific track record and are making fools of themselves while George Soros and Jim Sinclair are putting their own monster money where their mouths are; gold is going higher, not lower.

In my view, silver has a bull head and shoulders continuation on the 1 and 2 year charts, and the kitco charts show it better than most.  Is it as good as the gold pattern between 680-1033 was?  No.  Is it powerful?  Yes.  Silver appears to be making a run at the neckline.  If it is successful, I believe the silver price will become so volatile that it becomes virtually untradeable to those with no core position.

So my words to you gamblers out there are:  Your time is now to take action.  Silver action.  That is, “Hi Ho Silver!”, not High Ho let’s buy Junk Bonds and wait for the banksters to maul us!”  The worst case scenario is you own one of the world’s greatest assets as the theme of the crisis becomes the banksters’ attack on paper money itself.  If price were to decline in dollars per silver ounce, is that such a disaster?  I think the risk/reward is skewed massively towards reward, as is the timing.

Kitco Silver Chart This chart tells you all you need to know about what is coming to the metals bears:

Click on the image or HERE for a larger Chart

“There’s plenty we could talk about with silver, but our goal is to make money. So let’s focus on answering just two questions: Is today’s price expensive or cheap? And, what are the best silver coins, ETFs, and stocks to own?”

Silver has been sizzling and causing lots of buzz in the industry. Investors are excited.

Part of the hubbub is due to its current run. Since its February 8 low, silver has roared ahead 22.4% (through June 21) and has doubled from its November 2008 low.

This excitement has spilled over into greater investment demand – especially so for coins. The U.S. Mint sold more Silver Eagles in the first quarter of this year – just over nine million – than any prior quarter in its history. The Royal Canadian Mint produced 9.7 million silver maple leafs in 2009, also a record.

Take a look at the jump in U.S. Mint coin sales since 2007, on the chart above.

Silver bullion ETFs are growing, too, experiencing a five-fold increase in metal holdings since 2006.

There’s plenty we could talk about with silver, but our goal is to make money. So let’s focus on answering just two questions: Is today’s price expensive or cheap? And, what are the best silver coins, ETFs, and stocks to own?

We have all the answers straight ahead, including lots of actionable info, so let’s jump right in…

Why Should I Buy Silver?

There are several reasons to own silver in addition to gold.

…..read much more and view charts HERE

It is not exactly groundbreaking analysis to say that whats good for Gold is generally good for Silver. As observers of the precious metals know, Silver tends to lag Gold but eventually catch up quickly. In the long-term sense, Silver is still a year or two behind Gold as Gold has broken above all resistance levels. Technically speaking, we do favor Gold over the next few months, but ultimately, Silver is poised to catch up with vengeance.

Here is a great 40-year Silver chart from Nick Laird at sharelynx.com, with my annotations.

This long-term chart shows $15/oz as a critical level. Silver rebounded strongly from $15 earlier this year and is soon to attempt to break $20. A clean breakout and Silver should reach $25, which is its final long-term resistance.

This brings up the question, when will Silver break $20/oz?

The above chart provides some helpful hints. First, the 40-week bollinger bands are nearly tight enough (as in previous breakouts). Second, Silver has held above $17.50 despite numerous attempts to go lower. Finally, Silver is performing very well in relative terms. Silver against both currencies and commodities has already broken out past its 2008 high. On the other hand, Silver has yet to breakout against Treasuries. We are keeping an eye on that ratio as it could confirm a sustained breakout in Silver past $20/oz.

Of course no one can predict the future. We try and assess what is probable and what is unlikely. Given the macro backdrop, Gold and Silver should continue to outperform going forward. When we look at the technical backdrop for Silver, we see what is “probable” should the metal eclipse and hold the $20/oz barrier.

Hence, in our premium service, we’ve selected the Silver stocks that are most likely to outperform from the coming move past $20/oz and to $25/oz.

Good luck and keep your eyes on Silver!

By Jordan Roy-Byrne, CMT
http://www.thedailygold.com
Jordan@TheDailyGold.com