Tuesday, July 19, 2011
Daily Chart had a move today that brought silver below thirty-nine dollars as the market was flirting a move to forty-one that did not occur. $38.11 is huge which is calculated at $38.14 using the automated fibonacci of the last sixty-seven periods. Either way, this number area is big and a move to this level for breakout support would be ideal and nice. I stated that the hammer candle was not a bearish one this time because it found support at this massive level. That turned out to be true and that level of support is the original breakthrough support to the next level. Now that it has had a decent move from that previous close of $38.17 on July 14 I will be paying attention to see if we can have a final lift off support near this level. Final note was that the market got up to my upper band before retracing. This band is different from the regular bollinger band as this is calculated by taking the average volatility percent over the last eighteen days on a front weighted manner. It takes this percentage and multiplies this by three. For the upper band this percentage increase is added on to the eighteen period average of highs and the target is made.
Quarter day chart has the market moving towards the front weighed five day moving average. It moved a decent amount below the five day average of closes at $39.50 however the actual five day moving average which is not front weighted $38.89 and a sizable difference. With the at least short term bottom coming at $38.61 this meant it pretty much had a bounce on the five day average most people are familiar with. The front weighed gives a better more accurate picture. This bigger size move can give some concern, but I wouldn't expect this to be the case although it is possible. The higher volume started on the morning of July 11 as the rally was starting to ignite. With the volume being relatively the same as yesterdays move it is going to be hard for me to give much conviction to the down side. With that being said, this is the first breakout/down on this range and I am concerned that the first one does bring a failed move. This is the second test of the five day moving average on this chart and the last break low was $37.60 and that is the number it needs to find a bottom higher than to make a higher low. If the market goes below this level then the fibonacci retracement from these levels equates to $37.85 and $36.11 and therefore a break of this previous low means its breaking below fibonacci and this could set up a DDAY moment at the lower level at thirty-six per ounce. I say DDAY because this is a term I use when the market is a point where it needs to make a decision and thus its Decision Day and because the bull versus bear market is like a war, it is only fitting in my opinion.