Wednesday, July 20, 2011

07.20.2011

Quarter-day Chart is showing a nice pattern as it has found support at this twenty period average of highs, lows and closes and has just broke that level above it and back above forty fiats. This twenty average is five days because there are four ticks per day. This means it has went through the five average and then recaptured its level back above the rising average. This is a failed move that can often times cause fast moves. You can see the last one on this chart broke below the five day average and then a fast move that made it to the upper part of the band at thirty-nine fiats. This band is different from the bollinger band and seems to be working very well as I have been using this now going on my second month. Currently this band is at $42.35 and when silver was breaking past the five average a week and a half ago its bad was around thirty-eight and it rose another dollar when they met. If this rises another dollar then it brings us to $43 area, but what is important to realize is there is upside potential in silver as it closes at the highs of the day today.


Daily Chart ends with a close above $40 and more importantly the $38.14 number on the chart that represents the fibonacci from the big highs pre-crash and the crash bottom totaling three dimes above thirty fiats. What I like about this chart is how it is holding well as support in what used to be resistance. With further momentum we can now look to make a move towards the target which is the band at 42.00 which is moving and the $42.23 level that is not moving. This number represents the "must hold" level for this selling to become a legit move and ultimately start a 6-200 month bear market. I say 200 only because history has shown that it is not uncommon for a market index like silver to have a bear market in that duration from fifty fiats based on what happened in 1980. Of course, a multi year bear market is not going to happen and even a twelve month bear market does not seem logical today. Even though its possible for the price to make new lows breaking the thirty handle or even stay in this range for a longer period of time, it is most likely that if this does happen that would be it for the bear market. It is insane that silver is below the 1980 highs and that a correction of over ninety percent down was even possible. This should bring a yellow or red flag when you see this kind of activity and most definitely questions should be asked. There is two ways of looking at silver investing for long term holding and that is 1) If the dollar collapses, how will this play out with the physical? The answer to this one would be of holding something that other people are favored to want or be happy to barter with. Many people may not like silver in this environment but will realize they can accept your silver in trade and then trade it back for something else they want and thus giving it money principles. 2) We are crazy about the dollar collapsing and the world carries on like it always has and we can just do our thing. In this case inflation of normal values will reign in and by 2050 the silver should be worth over four hundred and thus its higher than having those fiat notes. I expect number one to happen, but I like to look at things from multiple angles.

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