Monday, July 18, 2011

07.18.2011

Daily Chart has a rise in volume over the last few days as it has cleared from the fifty day moving average with it's first close above $40.00 since May 3, 2011. I find this an interesting pattern because it looks like someone has just broke the metrodome roof wide open as the shape of the fifty day moving average resembles a baseball dome. No confirmation as of yet on the break above this level as a test of the fifty and previous resistance would be ideal and healthy for the market in some sort of correction mode either through price or time. To sum up the support found at the 38.2% level was magnificent and the bounce is happening. The market has given many people time to buy silver and not miss the boat because of over two months of discounted prices. It is unfortunate that people pass on these deals.


This indicator has managed to surpass the twenty percentage level that I have been talking about, and not only has it moved above the blue line (direction from the low) but with new highs not seen since early May we are also making new fifty day highs in the forties again for the second time this year. For this pattern to show a breakout signal now it needs to have some formation to hold these gains and this isn't happening yet. It is just going up and up and up and thus if this happens then at some point you just have to say "This is a confirmed up trend, wow!" When this happens its very much a great play the first moment it breaks the resistance level and in this case it was eighteen percent and myself I like support to be found at previous resistance and that's where I would be looking to buy with this chart moving back to 18% and then going higher. With that said, this chart is useless this time other than for any other knowledge needed and its for its looks, because the breakout signal will come when this $38 area is used as support with momentum moving back higher. Again even this information is useless when you understand the entire spectrum on how currency is created and what the cause and effect is of people in mass waking up world wide. Take care and have a great day. Be back Tuesday.





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UPDATE 1335 EST - The dow is down over one percent with a declining five day average and silver is breaking forty and making a new two and a half month high with a rising five average. Gold is now breaking $1,600 and I think it is an understatement to state that it is holding $38.11 very well right now, but we have still yet to confirm the break above this level as of yet.

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