Wednesday, August 25, 2010

August 25, 2010

Break of Trendline!

The volume today is as high as it was in yesterdays early session. There was 5.1 million volume at 10:30am today which matched yesterdays level. When higher volume comes in on turning points you would like to see further volume carry forward with the pullbacks to come on lighter volume. The trend line drawn into this chart has been taken down today. Three things happen when its a break of a trend line which would be

a)Reversal - In this case, a pattern of higher highs and higher lows that should bring us back to at least the 2008 highs.

b)Trap - This would mean it's gain would be short lived and somewhat soon you would break below this trend line and would ultimately test the bottom of this range.
c)Time Correction - This is what silver has been doing for months is correcting through time on the longer term charts. If this were to occur that would mean that the range we have been for months would be extended even longer.

On this chart $17.50 and $18.20 SLV values seem to make a nice little range. If we take 161.8% of the difference of 70 cents this gives us $18.63 as a price objective. Therefore on the next move higher, this would be an area to watch for resistance. As far as Fibonacci support is concerned, the areas of support i would like to use is from the beginning of the breakout which is $17.43 in SLV and on the comex it would be $17.75. Therefore take the difference from the high to it's low and take 38.2% and 61.8% off of these values to get the fibonacci levels. I will put these on the blog later on.


In 6:36 min. David Rosenberg, Gluskin Sheff & Associates chief economist, discusses his belief that we are in a depression despite the government's best efforts. Positive gross domestic product readings and other mildly hopeful signs are masking an ugly truth: The US economy is in a 1930's style Depression

Gold rallies on investors' fears
Anxiety over poor economic data and slowing global growth fuels a rally in the precious metal's price...

I was not able to find as many links today that I would have liked that I put in an MSN money article in. The previous article above pretty much states that investors are getting into gold because of poor market conditions. Well DUH, what else are we supposed to expect? I only heard the mainstream media talk forever on this word "Recovery" as if they expected it to happen. The reason for this blog is because of the fundamentals for how money is created and distributed which makes silver an amazing investment in my opinion. In fact the fear that people should be placing during this economic collapse really has not even started yet. I still think before the year is up I will hear many mainstream pundits state at different times lines like "Investors are fleeing to safety to the USA dollar as Bonds have gone higher" or "Is gold in a bubble?, it sure looks like it to me!" This has been style and I do not expect it to change that much. In fact I would expect much more of the same.

Regardless of the fact, the panic of this currency crisis has pretty much only begun and when the train ride to gold takes off to the upside, Silver seems as if it's very happy to tag along. The crisis is that of a dollar and currency issue and you can not create phantom money out of thin air and then label it "Valueable" and make it such. They can try their best to make people believe it and for many years they have done so.

They have been doing so by fueling the word "Recovery" like its a for suer thing. This is endless as I browse onto Yahoo's finance page and read an article that says Recovery in Danger and when viewing the first paragraph I read "The economic recovery appears to be stalling as companies cut back last month on their investments in equipment and machines and Americans bought new homes at the weakest pace in decades." Myself personally the label given for "Economic Recovery" makes me feel ill at times when I hear it, because I know its a lie or they are that clueless. Either way it is scary, and I am all for an economic recovery, but by putting the printing press in a higher gear this does not constitute a recovery and can only devalue the dollar even worse

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