07.13.2011 - Breakout Day?

WEEKLY CHART has the market snug in a nice neutral position still waiting for decision. The eighteen period average of highs is $38.91 using a front weighted average and it has not even tested this average yet during the last few weeks. In fact the market has never closed a week above the eighteen period average on these closes during this time frame and is currently above this level now. Breakouts from these patterns can be fast and furious and a confirmed break above the $39 mark i've been saying for a couple months will give this chart bullish signs.




DAILY CHART has the market with a close above the significant fibonacci level at $38.14 for the first time in a month and a half and the analysis I take from this is the chances are higher we take it out and because it has not been there for a while it may need time to consolidate. The 18 period highs and closes average is well above the price and there is nothing wrong with a decent size price correction without destroying the momentum. If we can have a higher high, higher low and a close above $38.14 on Thursday then it looks like we are good to go in the start of a new uptrend




THE BEAR LINE or the direction from the fifty day high has crashed today with both newer lower highs coming into the market as well as over five percent gain on Wednesday. In fact silver ended the day meeting up at the same spot with both lines. The direction from the low is now at 16.48% from its lows with the bear line at 16.11%. At the start of the day the fifty day high was $47.25 and it is currently at $44.19 and tomorrow at the end of the day will be $41.33 where we could potentially have a realistic shot of making a new fifty day high (SLV days) if it can close with a nine percent gain. That won't happen (or should not happen), but what will happen is the orange line moving significantly over the blue line which is important to have to go long. That is not enough to go long as its one of the variables needed as it needs to have a confirmed break above the 20% area and that works to the same as having a confirmed break above this current Fibonacci variable we are at now.





Update 1612 est - I'll update this blog in the evening session most likely and it will be interesting to see how the direction from the fifty day is going to look and especially because the market is rising as the fifty day high moves into crash mode through time of fifty days passing. I took a peak at it this afternoon and the direction from the fifty day high has crashed, but is still above the direction from the fifty day low set at $32.32. To put this into perspective the May 10 high was $39.48. May 10 was also forty-six days ago counting holidays and therefore SLV has a lag on the calculations, but it is close enough. This means we could potentially get a confirmed buy signal next week if things go well.



1530 est - Rally is looking great right now and holding above $38.00 with some small corrections along the way. We still need to confirm that this is a real breakout and this will happen over time. The key is that move above $39.00 and we are still below it. The volume on SLV was higher today as well as volatility and will comment more on that later on for those watching live. For those not watching live, this is nothing more than the final update blip on the bottom of the screen.