Monday, May 23, 2011
The direction from the 50 day low and high indicates how far the current price is from these levels. Being 40% from the high means that it needs to gain 40% to get back to the high seen around four weeks ago. This also can tell you if the bulls or bears are in charge by which one is higher than the other. By looking at this chart it is obvious that the bears are finally in charge as its been mainly bullish for months. To use this for an indicator to go long I would not only need to see it move past the 10% mark off the low but even over the last resistance point at around 15%. What would also be nice is if the market can establish a resistance level around 10-12% and then play on the breakout of the level. Tomorrow some time I will update the 1979 comparison.
POST MARKET UPDATE -Same old story, same old dance. Market is in a tight range and is having a hard time getting any momentum going. Lots of indecision and the longer it stays like this, the bigger the aftermath details will be. Take care everyone.
1100AM UPDATE - Still boring and still neutral as far as the short term is concerned. It has stayed above the five day moving average, however the average is not rising and thus it is flat. The longer this market stays in a boring trading range like this then the bigger the breakout(down) usually is and what happens is many long and short positions hold on to their position because they have their stops outside of the range. This means when it breaks one way or another with added participants you can get explosive moves one way or another. The fundamentals of what silver can do in industrial practices or the fact that we have a piece of fiat crap as currency means nothing as its paper traded game and if the powers that be want cheaper prices to get their silver then they will most certainly keep the price lower if they can. Until then I am going to be very less active on this channel and thus take a small vacation.