Monday, February 21, 2011


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Technical Analysis on a Comex Failure and Wild Times!

Technical Analysis on markets that surge out of control with wild moves usually increase its volatility and bigger moves. I can not count how many times I have seen the five day moving average be support, resistance or break through and above and because of that I generally know what to do pretty fast. I can't count how many times i've noticed an up or down move fail because it broke through 61.8% key level. However, I can count how many times a comex failure has affected the silver market. The answer is zero! We are in unprecedented times, and logic would state it could make massive moves and in the meantime the same technical analysis principles can come through. For example, the chart below is the daily chart and the resistance that has connected this one month rally is now broken to the upside. This is huge and usually results in more volatility and a market top (for a few hours/days). I would suggest otherwise that this is a market top because of the fundamental news. If this takes off, then just maybe we may test that trend line I was watching throughout the fall of 2010. Currently this baby is at $34.00 and it is unprecedented to have another 12% gain in a short period of time. But C'mon, this is not normal times.

The article I seen from a posting forum with links within' them shows this is going to be a march deal. The comex contracts are month ended (Feb 28) and there is not enough physical to match the actual holdings (surprise, surprise!) and its a matter of when and not if the comex fails and to what degree the price action will react to it. Well, the when might be soon and I'd guess price action will go wild (to the up side). I'll try and put another post before the end of the day. SLV is not trading today and thus I can't use their data today to make charts.

I am using the curve chart to analyse a parabolic move within' silver. Holding this trend line is extremely bullish for the market because the rate of ascent keeps increasing on a week by week basis. It's hard enough to hold a regular uptrend line, but holding this takes the cake if you will. This will be the final update for the day (pending a major PM movement in price/news and below is my intraday video. Thanks for stopping by to this page :)

1 comment:

  1. Thanks for the update, this is one wild pony ride...