Monday, January 31, 2011

01.31.2011

Silver closes at $28.00 USD today

Images can be enlarged by clicking on them


Today the market remained in a sideways pattern as it consolidated Friday's gains. 2% top to bottom from the highs and lows shows it was not that volatile and the volume today seen only 22 million shares trade on SLV which is lower than the 50 day average of 27 million.

The five day moving average is now rising and the market is above the downtrend line. This means the trend has been broken. A break of a trend line can mean one of three things
1-Trend reversal and the market should go from a downtrend to an uptrend
2-Market to correct through time or the rate descent will not be as greater
3-Bull trap and thus a failed move, which should create a fast move lower

With all that being said, the 50 day, 20 day and 2011 Volume Weighted Average Price are all declining and above the current price of $28.00. This means the battle is between the rising five and day averages versus the ones mentioned.




The 50 day low will change to $26.34 tomorrow and thus there will be a dip in this chart. After this happens then it will remain near this level for a decent amount of time. Thus, the charts will re-adjust themselves and I'll show Tuesday what it means on the blog again. The main thing is that the downtrend line has been broke and the five day moving average is rising, which now puts the short term in a uptrend.


The monthly chart, which is one more suited for long term traders is still in a major uptrend. This was the first down month in Silver since July of last year. This has given us one little bit of a correction on here and at the trend is clearly higher. No reason at all to give the sellers any credit what so ever on the long term time frame because of the major rally from the summer breaking the $17-$18 levels. Mix this with the fundamentals of silver being priced in fiat dollars that has no intrinsic value as well as the fundamentals of people waking up to how currency is made and doing something about it. The sales of physical silver has never been so high and the demand is soaring. When these factors come into to play this gives us exceptionally strong reasons to keep on stacking.

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