Thursday, August 4, 2011

08.04.2011














What would be ideal is if the lines would connect to each other and that would give us another two or so percent down. The buyers are still in control according to this chart because their line is above the sellers line and because the sellers were in control for a violent short term period and it has not broke much resistance this could be going sideways or neutral. It is anyone's guess when you look at this on a blind level. This chart is a measure to see who is in control of this market. It can also be used for buy/sell signals and its normal for there to be fights in a boxing match and this game is like a boxing match and the game is market trading. Bears versus Bulls and after the bulls dished a huge nine month rally the bears had a decent short term move. I always say a little of things is bigger than one big thing and the many days and weeks breaking the teenage price barrier was bigger than the thirty plus percent move lower. The Bulls took over by bringing the market from it's July lows of $33 to $42 and now it is the Bears turn.









The Fibonacci Calculation is (H/L)^.618*L for one of the two key fibonacci marks and in this case we can use the high of 49.81 and low of 32.32 and get us the mark of $42.22 and that's pretty much precisely where the market topped this morning. We had confirmation for days that we were going to this level because of how well it hold previous resistance of $38.11 which is the 38.2% of that calculation. I also said that as long as it holds 38.11 that I will not be bearish and because it is currently above it then I am only bearish on the shorter term trends. This sell off is global and this means all markets are affected. Crude Oil is down 4.79% for the day and under nine percent for the week so far. The Dow Jones is 2.5% for the day and about five percent for the week with selling even before the start of this week. The bond rates are going lower and this tells us money is going into bonds and thus TLT is up today as is the US Dollar index which is common on global sell-offs. These are market conditions that are expected to occur during an economic collapse of fiat currency as people get educated in masses to how currency and the economic system works.

In my community there is one major bank branch for around every three or four thousand people here. With only a few tellers per bank this tells me that there is going to be problems here when people demand their cash. Sure they can do whatever they want on the internet with their account as far as moving currency into many forms of financial instruments, but the one thing you can not do on the internet as far as I know is take physical cash in your hands. The only way to do this is to go to the bank machine and pull out money or ask the teller for money. This will cause problems with lineups at bank machines that would eventually lead to machines running out of currency as well as lineups at the teller machines and maybe the same thing for running out of currency. I see the banks busy on a regular day by day business and when something like this surfaces the world then it should be note worthy. I am not saying this is happening today, this week, month or year but it is very predictable that this will occur. The reason I say this today is because SOME-THING is going on right now and usually these things balance themselves out like it did last summer. The problem, is we are not in usual times.

2 comments:

  1. I read some analysis talk about the broken silver parabola leading to further weakness. Do you have any comments on that analysis?

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  2. @Jeff silver has not had been parabolic long term since early '80. it has tried to go parabolic and that failure occurred three months ago. If you think silver weakness is coming short term, good luck and if you think that on a long term level, I will laugh and say good luck :)

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