Tuesday, August 23, 2011

08.23.2011



DAILY CHART ANALYSIS




The Reason I am bullish with Silver extends to this chart which is the gold to silver ratio. The pattern I am noticing is that the fibonacci support level is now being resiatance and looking to test its lower fibonacci mark with a ratio of around 42 to 1. Normally the ratio goes lower when the metals go higher and that is why I am bullish as well as a $42 Fib test support after spectacular $38.11 confirmation and the trend line hit that we have seen today. It does seem is if the dollar is a collapsing soon and I stand by my view of anything under $78 is an amazing bargain which means as long as we are in times today with spot below $70/oz then it is really never a mistake to buy if you are unsure about market timing. The worst feeling in the world is trying to time a price that never reaches. Down below is the original post from 450pm eastern time with a lot of ranting




posted 30 minutes before market close:

Hello. I just back from being out all day and have now seen that the market fell to $41.52 which undercut the $42.25 area that was mentioned. Whenever you have higher volatility then you can expect to have larger under and over cuts of a big level. The $33.58 fibonacci level in May was undercut by a little over a dollar and that could have been cut even further given its volatility then. With that being said, I am guessing the market is near the five day moving average and I sure as heck would not be a seller now as my thinking for part of the afternoon was "Idiot me, only two purchases during this sweet retracement and I set my goals to have a confirmation break both above $38.11 and the direction from the fifty chart to give me an indicator. Both have succeeded so far and I have yet to buy on strength as my last purchase was over a month ago back in early July. Therefore I was not happy thinking that I didn't buy a few weeks ago and rather wanted to wait for lower prices of confirmation. I have learned that patience is a virtue and having no patience or too much patience is never that good. No patience means you execute a big game theory decision without taking more time to go over the risk/reward data. Being too patient is pretty much scared to pull the gun on a play because you are still somewhat unsure. An example of this was the 2008 and crash where silver fell from $19 to $8 very fast in a couple of months from July to October. The not being so patient was making your big purchase at $16.00 and to some degree $14.00 which I thought at that time was "THE BOTTOM!" Having more patience would have resulted in getting the fiboancci level at $11.26 which as the 61.8% fiboancci retracement from the $4.00 lows and the then $21.35 highs. I said at the start of this paragraph how big moves can easily over cut the areas and this was a sure example of this as the bottom was $8.46 or another 25% more to the down side. Continuing on the buying on strength came afterwards and that was buying between $12-$15 and then again over $20. What i find funny are those people whom state not to buy on weakness succeeded in my opinion then from fourteen dollars and lower. After all if the smart people who bought when the confirmation shows me its a buy signal at $14.00 then those who bought at that level and all the way down got in cheaper and thus were the winners. It's important to know that if you are buying on weakness that the longer term trend is in your favor and if it is not then it can get you in trouble. If you thought in 1985 that the dollar has lost so much value that it can not keep losing its value and you decided to go hardcore on bonds or paper rectangles then you got yourself in trouble. I kind of hope to be unlucky and over the next few days of planning I wake up and see $52.87 (+7.85)on the CNBC screen in a morning where I finally see that kind of day I have been waiting for. I was kind of hoping to miss the boat at this level because I feel as if I am getting over patient with this purchase. Time will tell. Its 458pm EST and the market closes in 17 minutes as I write this. Charts coming later this afternoon.

1 comment:

  1. silver performance doesnt look good for the last two days. do u think silver can hold up above $40.00 this time? your insight pls. grateful for feedback.

    ReplyDelete