Tuesday, December 28, 2010

12.28.2010






SILVER BACK OVER $30.00 on news of the consumer confidence that has shocked the nation by revealing as consumers remain cautious of the economy as it slipped to a 52.5 index. Other reasons the Silver market has been making these gains is on the houses falling for the forth straight month. Another reason is because the New Orleans Saints defeated the Atlanta Falcons on Monday night which gives reason that the Saints can repeat as champions. Ok, I've done this joke before, and its obvious those are not the reasons why the market has proceeded upwards. I say this because the Mainstream media loves to say the Dow falls or rises because of these key economic indicators. Even when they don't make sense articles would read something like "Investors ignored unemployment figures...." and so on. The reasons they go up or down is big big financial institutions want to or have no choice but to have the market follow in one direction as well as the technical indicators.

This does happen to the 15th day I was talking about around Christmas and it really needs to get above $30.75 to breakout. Previous corrections took fourteen days to sell off and consolidate and the last ones 14th day was yesterday and thus it broke out big today. Because it is staying in the $30.30 area as of today's close, this does not mean that the breakout is not today as it has to break out and above the last top. For the breakout to be today, the market will need to keep moving higher without any time corrections on the daily chart. Therefore if we have a 1.5% up day on Wednesday and 4% day higher on Thursday making new highs then this would qualify. If it corrects through time for a few days then the day it breaks resistance will be the breakout day. If it tops and retraces lower then this is only going to the top end of this range. When in doubt during this bull market the bias should be the upside. This means when you are in spots where the analysis states the movements should break either up or down, the benefit of the doubt to the upside would be more accurate as historically trends result themselves with the current trend. Shorts are getting crushed in this market as they should be as they have been dead wrong. If one thinks the market is up too much because it has gained over 70% in only a few months then they will find out the hard way how good that strategy is. If one shorts because of other indicators like bollinger bands, then proper risk/reward strategy would be to take your profits if and when they come as well as ensuring the market doesn't soar as you short.

There is not one time frame where the market is bearish and thus when this is the case I will be giving any doubt that may appear to the upside. We were in a pattern of lower highs and higher lows and thus, we had this indecision period. Because of being in doubt the bias was higher and those whom played upon this rally are now making profits. If one is buying bullion on the dips then every single one of these has been successful. We are heading towards the 685.4% Fibonacci Level from the $4/$8 levels at $31.40. We also have the 161.8% on the $25/29.33 range that gives us a price objection towards $32.00. This could give us a reason to say "SELL, SHORT" when we reach $32.00? I think it is very likely that this will happen on the short term as it may move lower for a few days or few percentage points. However, the bias is higher and the fundamentals keep growing larger. It kind of scares me to think that Shorting at $32.00 in the hopes of a 15-20% correction will be successful. Thats why if you do choose to make this play to have your stops in place. If expected resistance levels do not play out and sellers can not control the market then you would expect the next key levels to meet up fairly quickly of massive gains very fast or have the resistance become support. Becoming support means $32 to be a lower end of a range for the first few months of 2011. I'm not saying this because I buy silver, but more so the reason I have bought and will continue to purchase silver is because of its massive upside potential. IF these levels go parabolic to these high variables over $200 or even $500 then many of these key levels will be destroyed on a technical level which will give us symptoms of silver climbing and falling $1.00 in a minute and 10-20% days. Therefore the next fiboancci levels above here is $50.00 on the longest of term time frames and $36.33 on the intermediate term. However it's very sketchy to say that thirty-six and one third will be the next level as the message of the market may change. However the 261.8% from the November highs and lows is that number that is used to calculate.

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