Wednesday, April 20, 2011

04.20.2011




Update - 948pm EDT


Another 31 year high as the market keeps moving higher. The failed move today was the over two percent drop in under 1,800 seconds (30 minutes) and it has proceeded higher. Already off to a good start with a six game winning streak on the long side and the $48-$50 target seems to be in clear view. This means the $78 level will have be to talked about a little bit, but before that will be the "Hunt Brothers" as I made a prediction months ago that when silver would approach $50 for the first time we would hear "a little more" on the mainstream media about silver and the story will most likely be the Hunt Brothers and how they tried to corner the market. I doubt I will believe much that they say but for now enjoy the gains to the upside as the trend keeps soaring higher.


End of the day Report - Nice up day today and the fast move lower was just that. Fast! It went down over 2% in under thirty minutes and recaptured its losses that quickly. This market is holding up very well and $48.36 most likely is the next resistance on the intermediate term up to $52 and the 1980 high.



Silver to Gold and Gold to Silver


On the Silver to Gold ratio or the Silver priced in Gold this chart is skyrocketing. It is approaching a key 1,000 level which will mean an ounce of silver will be even with a gram of gold or a 31.1 ratio. The trend lines shown on this chart are showing explosive signs. The big spike from 850 to 880 was on a break of the resistance line. By taking the same length as the previous range and same ascension rate it has moved above the line and has found support at this level. What this tells you is a higher ascension rate for the market as drawing trend lines in this chart with higher uptrend angles would be a very easy task. No signs of a top right now and in my opinion picking a top in this current market is a fools game.


The trend is lower! Much lower. This is an aggressive downtrend line that has been hugging support much more than the upper edge of this trend. Its due for support and maybe because it is at the trend line it may however since the breakdown less than one year ago the ratio has lost around fifty percent of its value. I guess Gold is in a bubble (or was) priced in silver and the bubble would have burst in 2008 when gold was under $700. The ultimate bubble I guess is dollars, but this shows us that silver has been over performing the gold and metal and there is no such thing as down to low. If this ratio rallies from here up to the 37 area or something that can be considered a bounce then that is both bullish and bearish. The market needs a lower high as the last one was a little over 40. The fundamentals of course should signify it has much more downside room to more or at least another fifty percent down more to move to its historic 16 to 1 ratio. Stats on inventory and production may state it should be closer to nine or ten to one and tangible usages can make this number go even lower than that. This one is up for opinion and what is not up for opinion is the historic ratio as well as the current trend of this chart.

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