The pattern is moving towards what I like to call "D-Day" and this always occurs in some form of an indecisive pattern that is coming very close to making its decision. We have experienced a great deal of selling from the top and around 44.66 has been established as massive support but it can very easily go lower. That doesn't mean it will but a break of this level would certainly mean the odds for another wave lower to occur. The one and the five day averages are crossing together and this is the area where we will see if the five is used as resistance for that leg lower or if it is support for the move higher. This same line works within' the fibonacci retracement from the lows of around $40 and the highs close to $50. Because it has stayed above the lower purple line this tells us that the move higher is still successful and that line is the must hold to continue this rally. The upper 61.8% Fibonacci level has been used as a level of support and has moved sideways (or corrected through time) and it falls from here it will be a classic fall from the key level. The market can keep correcting through time and for upside targets are $46.56 and $47.77 which connects the high from the start of this week and the big support at 44.66. On the shortest of term levels it looks likely that we will test the $46.50 area in a few hours as the volatility is reducing a little bit and the push from its previous low after it not being a lower low is assuring.
This image is from March 1, 2011 to April 26, 2011 at 12:00pm Eastern. This shows me two different things and the first one is that gold is not that volatile. It's movements are much weaker and smaller in comparison to silver. This is to be expected and goes with the historical movements. When we see Silver go up two percent then gold should be up 0.4% and when silver is down two percent then gold should be down around 0.4%. That seems to be the way things are going, however the main point on this as well as the reason I posted this image to the log is because as the silver volatility is skyrocketing this week the gold one is staying flat or in the direct area that it was before. Gold had some big moves in March as did Silver but as Silver made new highs on their volatility the Gold one did not. The calculations for this index is by taking the hourly volatility in percentile moves (High-Low)/Low and then taking the average of the last 30 & 120 periods. I add those two numbers together and multiply 1,000.