This Always Happens Before Silver Price Doubles

Key Concepts

• Silver Price Doubling: The central theme is identifying the conditions that precede a doubling of the silver price.
• New All-Time High Breakout: The primary trigger for a silver price doubling is identified as breaking out to a new all-time high.
• Historical Instances: Three past instances of silver breaking out to new all-time highs are analyzed (1967-1968, 1973-1974, 1978-1980).
• Monthly and Weekly Charts: Analysis uses both monthly and weekly price data to identify breakouts and trends.
• 150-Day Moving Average: This technical indicator is highlighted as a support level during corrections preceding breakouts.
• Bullish Corrections: The pattern of a brief, percentage-based pullback after reaching a new all-time high before a significant upward move.
• Long Bases: The concept of commodities consolidating in extended price ranges for decades before breaking out.
• Copper and Oil Breakouts (2004-2005): Analogous historical examples of commodities breaking out from long bases and experiencing significant price appreciation.

Historical Breakouts and Price Doubling

The video posits that the consistent precursor to the silver price doubling has been a breakout to a new all-time high. This phenomenon has occurred three times in silver's history, and the current market conditions suggest a potential fourth instance.

• Historical Periods: The three past instances are identified as:
  • 1967-1968
  • 1973-1974
  • 1978-1980
• Monthly Chart Analysis: On a monthly chart, silver has not yet closed above $50. A sustained close above this level would mark the fourth instance of a new all-time high breakout.
• "Modern New All-Time High": In 1967-1968, silver surpassed its 1920 peak, which is termed a "modern new all-time high." It did not, however, exceed the Civil War peak.
• Magnitude of Past Moves:
  • 1978-1980: This move, on the current scale, went "off the chart" and exceeded $400.
  • 1967-1968: On a weekly chart using the current scale, this move reached a peak of $97. In daily terms, it likely reached approximately $110 per ounce.
  • 1973-1974: This move reached $105 per ounce on the current scale.

Timing of Price Doubling

The historical data suggests a consistent timeframe for silver to double in price after breaking out to a new all-time high.

• Timeframe: In all three historical instances, silver doubled in price within approximately 7 to 11 months.
  • 1973 Move: Doubled in about 7 months.
  • 1967 Move: Took slightly longer, around 11 months, though it got "very close to doubling" in 7-8 months.
  • 1978-1980 Move: Required 10 months to double.
• Projected Timing: Based on this historical pattern, the video suggests that "next spring, next summer" is a ripe period for silver to reach $100.

Correction Patterns Before Breakouts

A key observation from the historical breakouts is the pattern of a "bullish correction" or a "mini cup and handle" / "ascending triangle" formation after reaching a new all-time high, before the significant upward move.

• Focus on 1973 and 1978: The analysis focuses on the 1973 and 1978 instances, considering the 1967-1968 period as potentially less comparable due to a thinner market and different trading environments.
• 1973 Scenario:
  • Comparison: The 1972-1973 period is considered the "best comparison" for the current market.
  • Correction: After reaching a new all-time high, silver experienced a bullish correction for approximately five months.
  • Magnitude of Correction: This correction was 16%.
  • Support Level: The bottom of this correction was at the 150-day moving average, not the 200-day moving average.
  • Outcome: Following this correction, silver "exploded."
• 1978 Scenario:
  • Correction: Before the major breakout, silver corrected by 10%.
  • Support Level: It "nearly tested the 150-day moving average" and bottomed around it.
  • Outcome: This preceded the significant breakout and upward move.
• Implication for Current Market: The 150-day moving average is identified as a potential support point for silver during any current correction.

Analogous Breakouts in Other Commodities

The video draws parallels with breakouts in copper and oil in 2004 and 2005, which also emerged from extended consolidation periods.

• Oil (2004-2005):
  • Long Base: Oil had not broken above $40 since 1980, trading in a range of $10-$11 to $40 per barrel.
  • Breakout Outcome: Upon breaking out in 2004, oil "exploded" and nearly doubled in the subsequent couple of years.
• Copper (1974-2004):
  • Long Base: Copper consolidated for a 30-year base, from 1974 to 2004.
  • Breakout Outcome: After breaking out past $1.50, copper gained approximately 170% in about 13-14 months.
• Relevance to Silver: These examples reinforce the idea that commodities emerging from very long bases, after breaking out to new highs, can experience significant and rapid price appreciation.

Conclusion and Future Outlook

The video concludes by emphasizing that the current setup for silver is "perfectly" aligned with historical patterns that precede a doubling in price.

• Anticipated Correction: The presenter acknowledges that a correction is expected, and the key questions are its duration and depth. These will be addressed in future videos.
• Call to Action: Viewers are encouraged to comment on their predictions for the length of the correction and the next low point for silver before it definitively breaks $50.
• Final Prediction: Once silver breaks $50, the evidence suggests it will double in price for the fourth time in less than a year.