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MARKET UPDATE 820PM - Its not holing $39.00 well on the short term which indicates that a good dip is still available as well as the chances its not support to go lower. Maybe from 90% to 85% to be some level of support. Its pretty common that it pierces (going a little further) below the key support level and with the volatility at its current level that would bring it to around $37.80. This would be the last time I would buy bullion on weakness (unless you really wanna get outta fiat) until it gets to $33.00. I'll try and cover this on Thursday in buying on strength if it breaks $37.80 rather than on weakness. If it goes to $33 without the changing of the guards (5 day average has to rise to change) I will be very strong again like I am today for the buy. However, if we fail then it will only be on strength with a rising five day average. How you play paper and margin and all that crap, I don't care but if I have helped you out, your welcome.
POST MARKET REPORT
This $39 level is a very massive one that has a huge probability of finding support and a bounce from this level. That should mean the chances for an up session on Thursday is very high, but it is not guaranteed. Even if there is an up move in the market the odds do tell us that on the intermediate trend we will make a lower high and thus the first time you enter a big level is the strongest point for support. If the market rallies six or seven percent and then falls back then it won't be strong to find support there as it is now. We have had heavy selling over the last few days and an unprecedented move of over 20% from the highs of $49.81. I've stated on the blog yesterday why it was done and if are familiar with how fiat money is created as well as a little knowledge on how the paper ponzi market works these moves should not surprise you. Even through it is a manipulated market, I still expect this area to be support for a bounce. This may not be the bottom for the intermediate trend, but further selling would shock me a little bit, however it would not surprise me. The reasons $39.00 is massive support is the following:
50 day average of Highs and Lows is currently at $39.03
The Exponential 38.2% down Fibonacci from the 2011 Lows is $39.02
The Exponential 61.8% down Fibonacci from the March lows is $39.05
The Exponential 23.6% down Fibonacci from the 2010 breakout lows is $39.04