04.25.2011

11:35PM UPDATE - MORE SELLING

Market is down a little over ten percent in a little under twenty four hours. If you are looking for a dip, then here you go as it has now at the five day moving average. Given the volatility in the market the odds state that some support should be found at this level and the movements will continue to be enormous. If this level fails then the fibonacci targets will be $42.85 and $43.33 that should rely for good support. The odds do go higher that we have faced an intermediate term top. It's unlikely that we will have another large wave lower without at least another correction through price going higher or time that corrects sideways as the market faces a very oversold condition in the short term for what is still an uptrend on most long term time frames. I was kind of hoping for this myself because of my plan to buy more silver on Tuesday and a move of this nature makes it easier to barter for lower prices.

12:35am (FINAL) - I am off to bed and I fully expect the price to be higher when I wake up as the odds this area is support is big. Does not mean it will, but greater than 75% likelihood I think. There has been eight straight hours where the movements are one percent or greater and 15 of the last 17 periods have been greater and therefore something is going down!


Post Market Wrap Up

Today was most certainly a volatile day and the volume on the SLV shares had 188 million shares traded which is a new all time high surpassing the high from November 9 of 148 million shares. These high volume moves should create one of two scenarios. One of them is a top that will take a long time to be revisit and the second is the start of a big push to the upside that may have higher volume even later on. The last time it had the big volume is the second of the two as the prices doubled from its $25.00 bottom. Tops and bottoms are known after the fact and are very hard to guess. For today’s movements, the range from bottom to top was 8.95% and this was the highest since the exact same day of the high volatility. It is a little interesting this happens as we approach the Wednesday session that was mentioned last week in the 31 year comparison video. If we are to have an explosive rally which has gains we have not seen in quite some time in a percentile basis then the most likely scenario is to encounter the action we have been seeing. Having 16 up days out 18 to start and follow this with a violent nine percent retracement in a few hours. Federal Reserve chairman Ben Bernanke also is speaking on Wednesday and this should increase some volatility even more if you haven't had enough already. Day traders are now going to be able to win or lose big over a short period of time as the most likely moves in the afternoon session and from the only source I seen the time this begins is at 12:30pm EDT and 9:30am pacific. The ultimate outcome is as certain as a morning sunrise still as the currency will either have to re-peg itself to real commodities like gold and silver or the currencies are going to flat out die and become a souvenir that will leave us with memories and a popular historical story for the generations of the future. During this run to these large levels many quote not only the triple digits but possibly even four digits and if this occurs, then there will have to be some very volatile moments and down moves that will take us there. The most likely scenario is that many ten percent days will occur and over 70% of those big days will be down movements like today and back in November. The daily chart is still in a great position and still no need for me to even display the fifty day moving average until it can either correct more through price or time. The five day moving average is rising and all sell offs (including the big one today) are guilty until proven innocent.


VOLATILITY


This move of almost 9% is the second largest as you can see on the top part of this chart. The warning signs on this image tells us to buckle our seat belts more than anything. I do not have older data the 2008 bottom on the daily time from for the OHLC on the twenty four cycle and am unsure on the data before this for an index value but I do have it from 09/28/08 which can give me something to work with. This move today most likely will spark something on the longer term charts and this can be very dangerous for individuals whom are trying to time the market and especially those who play with any kind of leverage. The movements from 1980 had average closes of ten percent one way or the other and we are not in that kind of ballpark (yet).

Short term things are just wild to say the least. Since midnight began on the New York time frame there has been thirteen hours where the moves from the lowest and highest level exceeded one percent. To put this into perspective there were that many one percent moves in a span of five days that preceded this wild action. It's tough to say what is going behind the scenes, but by using technical analysis it is easy determine that it is something. With the events that took place last Friday we can trigger this to something and the high volatility should ultimately mean either an intermediate term top or an explosive up move to follow.


There is more on the post market summary including the fact the Silver priced in Gold broke 1,000! No one will talk about that or at least this would probably be the place it is talked about. Update will occur later tonight.



AM MORNING UPDATE - The volatility is wild right now and every hour one and two percentile moves are occurring and thus things are starting to get out of control. It is only a matter of time or it was only a matter of time before this happens and any big selling (that may occur) is very bullish for this market for the $100+ Longterm levels people are eyeing. There is no way we are going to cruise to $100 and beyond without having this volatility. The higher a market comes up then the further they will fall and thus it's went up pretty high and can continue to go up. Granted the higher this baby goes up the bigger the correction with eventually become. Key word of course is eventually. If it does get out of control to the downside in the next few hours or couple of days I would expect the five day moving average to become good support and the roller coaster has left the station and fasten your seat belts and enjoy the ride.