Tuesday, April 5, 2011

04.05.2011

Breakout Continues






5:08pm Quick Update - Silver closed at a 31 year high at 5pm EDT (This is my level of close, as there really is only one closing time per week at 5pm Friday) as the market trades 24 hours a day through the week. Gold didn't perform better than Silver today, but it sure felt like it did as Silver barely had better gains. Therefore there were solid movements today in gold that was not currency related or specific trades that occurred that dealt solely on gold and not the currency or precious metals. Silver is now at the $37.33 level I talked about yesterday and this area might be an area where it finds resistance or continues to correct through time. If not, and fast moves occur then not only would I expect it to break $40.00, but even test $41.00. Until then, keep adjusting to the message of the market

Currently the market is holding up very well. These are the gains we are looking for and there are many more to come. I personally like seeing these low volatile days where the market goes up a few percentage points at a time. Inflation is much lower than the rise of silver and the higher that the price of silver is when TSHTF, the better it is for bullion investors. For those whom are watching this price by holding paper contracts, all I will say is to either adjust your stops or quote Brian Shannon that "Risk management is job #1" and make sure to protect profits.


TREND LINE (Log vs. Linear)


There is a little disconnect on the daily chart with the logarithmic (increasing by percentage gain) levels and the linear (increasing by equal increment). The trend line used as support has not even been tested yet as resistance on the Logarithmic chart and thus showing us that it's movements have not been as aggressive as they were on the original part of this leg higher from the January lows. There is also a disconnect with the resistance level on this chart which on the Linear chart is breaking past the resistance level and on the Log chart it is still resistance. My guess is that they will work out in both cases when using trend line analysis will be successful by understanding the psychology of what is happening in either case. Also, the low was $26 and the high is now $39 and thus a 50% gain in a few months is fairly decent, but it maybe time to use a Logarithmic chart if movement gets out of control. Finally as far as the candle sticks on the top (middle) of the chart shows the time consolidation pattern with the breakout yesterday. Within' today's candle we see a move down to the $38 area giving us lift off support from yesterday's resistance.

Be back later today with the market wrap up.


Embedded video of the day

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