Thursday, December 9, 2010

12.09.2010



The market is consolidating well at this level. The ten day moving average was successful support as on its first test it stayed around its level above and below it. It made a nice gain and then came back to it very nicely and has thus lifted again. This now means the battle is between the ten day and five day average. The benefit of the doubt goes to the buyers with the trend being very bullish. Just because we came close to $31.40 as the huge resistance does not mean that it is down down and away. The odds do state however that a break of the $30.75 brings us the $31.40-$32.00 range where it most likely will stop going higher for a few moments. For now its jumping the gun with $31.40, but the $29.00 level is holding nicely.

Its alright that it is below the trend line, because the current trend in the market is price action going above and below it back and forth over the last couple of months. The trend will not always stay this way, and there is no sign of this current trend ending. To end we would need to see it breakdown and have a serious retracement or a serious time correction to go below it. It hasn't had a big enough price correction as of yet, nor has it corrected through time long enough for us to say the trend of the trend line flirt is dead. The other direction for breaking this trend line is bursting well above this level and thus making parabolic gains in a larger up trend line. That is very possible at this moment, but very unlikely to happen. However, theres a better chance it will happen any given day today than on any random day in the past based on the certain circumstances with the current technical analysis within' this big level and the fundamentals on all streets on planet Earth it could very easily happen. This would result in 40% gains in a week or 20% in one day.

Because we have had a lot of volatility in the market and the massive 150 million share day in November, this tells me its either a precursor to something else. This is either to a lower decline on lighter volume than it was in November until it makes it washout lows or a much higher volume day that would be at least 180 million on SLV seeing Silver make those higher gains where it moves up in the 10-30% range in a one day period or 40% week with 17% in one day. Those kinds of possible events. It may sound outrageous using those numbers, and I have learned to not take ballpark guesses unless you have something to back it up. In this case I am going back to days in the late 1970s when Silver had a boom and bust cycle.

Hold on to your hats, it will be a bumpy ride.




With Silver trading a little short of $30 per ounce currently and gas prices a little short of $3 USD/Gallon this means with each ounce of silver you can obtain around ten gallons of gasoline. This is why many have been advocating buying silver to protect your purchasing power. You simply are not able to hold cash and think that you are going to maintain value. You can try to invest your cash into bonds and stocks to increase value, but currently the bonds are not giving any interest rates that will be near the inflation value. Yes you might get three or four percent, but real inflation is over ten percent per year and thus you are losing. You can buy stocks, which is nothing more than playing a casino style game. To win you need to have an increase greater than inflation. For example if you buy $5,000 worth of stocks on one date and over a period of time real inflation goes up 25%, then you would need to have your stocks be worth at least $6.000 to break even.

The video below is that off the gas prices in fiat dollars and silver and later today there should be a regular silver update.






EVEN THOUGH HOME PRICES ARE GOING LOWER, HOME PRICES ARE STILL BULLISH!

Yes many people bought houses at prices much higher than they are today if they bought a few years ago, but they got ripped off at the time. They were told that it was an investment and it could only go higher from here. I guess that will be true if we price it in fiat dollars over the long haul, but when you look at a 100 year chart (below) we can see it is been going up at parabolic rates. Its increased over 5000% since 1913 today and that was around 10,000% back in 2007.






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