Wednesday, August 24, 2011
BLOG WILL BE SHORT AND SWEET UNTIL MONDAY.
Below image is 1m chart on the silver market at lunch time. Notice how fibonacci plays this by the book so well
BREAKING NEWS: MARGIN HIKE ON GOLD REUTERS NEWS STORY
Click on the image to enlarge it
These Qday charts show us two different fibonacci points with the lowest lows we have at $32.32 as well as the current level $37.02. The current level tells us that $39.62 is a must hold for the breakout from the $37 mark to be legit. Therefore it is conducting it's test now. The second fibonacci point from the $32.32 levels tells us we hit the first fib level keeping the trend bullish. That mark is $39.23 and the silver price action traded under this level for only a couple of minutes making it a perfect hit. This number is the logarithmic version and would make a calculated wager that only 5-10% of people use this over linear. The linear number was $39.67 and therefore the log defeated the linear. Some people think that these numbers work because everybody sees these numbers and not many seen this one including myself. When the price action dropped large today I thought to myself that i was missing a fibonacci mark and the 32/50 is the prime one with the 37/44 the shorter term. The one in between this is 32/44 and therefore 32/50 is holding above 38.2% ($38.11) and thus neutral. The bottom rally from the April lows has us cautiously bullish and the other one is looking to become bearish in a neutral state. All of this is within' the more longer term fibonacci marks of 17/50, 8/50 and 4/50 which has us very bullish for good reason. The five day moving average's first test of the rising 5 MA was a sudden failure and thus we are in an intermediate term bear market until the trend changes.
Tuesday, August 23, 2011
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.
Monday, August 22, 2011
The final candle that appeared on this quarter day chart (six hour) was that of a hammer formation. This is where the price action sells off at the start of the session and then manages to get back pretty much all of its losses. The price action opened at 12pm France time and 6am New York time which had the price at $43.81 which seen the price plummet down to $42.52 and the close of this chart shows us that we are at $43.77 and pretty much where we were six hours ago. The trend is having the price action move up towards the upper bands which shows the market is over extended or over bought. Just because this is the case does not mean that the market will sell. Rather if the market does not sell of or even correct through time that the gains we will see should be greater than normal as we are attempting to go parabolic on this particular time frame. If this again goes through this could mean $2.00 moves in an hour kind of action and when this transpires then we have blow off tops that could be around the corner waiting for us which is common when markets get over extended. Overall the secret is to hold above $42.25. Originally it was to hold above $38.11 and this has been done successful. Buyers and in control with this rising five day average and enjoy the day. Be back later
Friday, August 19, 2011
Even though there is no confirmation break past the $42.00 level on the price action as of yet this chart is giving nice signals that it wants to extend its gains. I loved how both lines recently met each other and since then they have been moving in opposite directions as the direction from the fifty day low is now breaking resistance and showing a nice uptrend pattern of higher highs and higher lows. We have had months to buy at these suppressed prices below $40.00 per ounce and that level is now over. Congrats to those whom did. We have had years to be able to buy silver at suppressed prices below $100/oz and we are still in this phase. Although for now I like any purchase under $75/oz to be a major long term steal we still are in this atmosphere. It is a tremendous advantage to know how currency is created when making investment decision that regard currency. More late Saturday Night
I'LL TRY AND GET SOME CHARTS UP THIS WEEKEND AND THE MAIN ONE MIGHT BE THE DIRECTION FROM THE FIFTY DAY. For weeks I've been waiting for a confirmation break on this level which seems is the case on this methodology. This indicates to me there is a great chance that either $42 or $41 maybe good support this week which would give this the wheels ready not only to have another $50 test, but a chance to make new all time highs for the first time in over three decades. For those who've been stacking, keep it up and for the paper trades the profit taking may start to ensure at 43.50 to 44.00 as it is likely to make a higher high from its previous one of 42.21 that has a nice gain.
In the meantime, I will be talking about this Historical Silver/Gold Link most likely on Saturday and this is a great page with amazing analysis going back to 1981.
Thursday, August 18, 2011
I do not think there is much need to comment on the Dow Jones chart. The video below has silver covered and there will not be a silver chart until after 11pm New York time. However, these two charts on the Dow Jones show me things very clearly to clarify the August moves we are facing to be light and thus watch out after Labour Day. Long term if the 10,500 area does not hold I am looking at one hell of a failed move that confirmed that the selling 2008/9 was a failure! Oh wait! What? YES, something has to fail and thus a fast move taking us at least to the old highs at 14.2K or the lows at 6.5K with possible breaks. On the short term time frame there is two 38.2% hits as I look at this where it was resistance prior from the July highs and since then it has been having a hard time with the 10,950 area. If this area does not hold, then this tells us the move that makes the secondary levels is a failure which means another test of the more longer term fibonacci support level. It's unfortunate many peoples life savings are forced into this Russian roulette game!
Tuesday, August 16, 2011
As long as the silver market is not doing that much and especially if it is not yet the day after Labour day then the posts will be lighter. Today will be no exception. The market is doing fairly well but is in a technical indecision with bias to the up side rather than that over down side. Long term the answer is simple only because of the asset class we are pricing this is in which is fiat debt notes and USA federal reserve notes to be exact. With this all said it is still holding the key fibonacci support level at around thirty-eight as well as a nice uptrend line. The $42 level break is what this will seem to come down to. Because $38.00 has been support over a longer primary trend being higher then it seems likely the lift off will occur soon. Below shows the direction from the fifty day high and low. The two levels hit up with each other and the buyers from these charts are currently in control of this market.
The final image for today's post brings us to the retracement for the price action on multiple time frames. For each time frame it takes the highest and lowest point over 100 periods and then with the current price level the level for where silver is on retracement from 0% to 100% is placed. This chart allows us to see which time frames are bullish and to what degree. Above 61.8% is bullish and the 73.6% is the number it needs to be above to be very bullish. The two shortest term charts are the ones that are keeping us down right now and this is a good sign for the future. The following levels take the highs and lows for the period time below:
Medium5- 100 months
Long6 - 25 Years
Long7 - 50 Years
Monday, August 15, 2011
This market is playing by the book fibonacci thus far as the move from its breakout lows of $17.78 and top near $50 came right down to this fibonacci line seen on the screen. Since that point it found resistance at the first level from the $50 highs and the lows it just created and therefore came back to the previous support level and that mark held. Then after it broke through the $38.11 area it topped at $42.25 which was the second fibonacci mark which then followed a move back to $38.11. The next target past $42.25 is the $50 high and it looks like it will at least test the $42.00 mark soon as it is showing great strength. The breakout from this fifty moving average is phenomenal after it was support for quite some time. This fifty day average is front weighted but the regular fifty day average doesn't look that much differently.
Thursday, August 11, 2011
The blog will remain very light throughout the month of August up to and maybe even after Labor Day. What I need to see happen is the exciting market action to pick up. Usually when I say it, it pretty much does however until either a break below $32 OR a CONFIRMATION break above $42.25. We have already confirmed that we are breaking $38.01 (or we did) and now we are signing of the possible failed moves. Therefore if you are gambling short term that $38.11 area will hold, I don't know what to say. You might and I hope you do but I don't know anymore. I am still waiting to buy on the confirmation or the break below a key level. Take care everyone.
Wednesday, August 10, 2011
1444 EST - With the Rally in silver today and the fake call option picked yesterday at this point with the cost at 61 cents to sell, I have no choice but to make the casino style strategy in selling this for a fake fiat profit (double fake) and I will have more on that later on.
1501 EST - Most likely if the market goes higher another PUT for around 30 cents will be added in the fake game. What I like about the trends on the overall market is silver & gold are showing great confirmation that they are holding a stock market fall. Not confirmation, but fact actually but what is confirmed is that this fall has a much higher increased chance of being massive and the biggest collapse in a short period during any of our life times (with the exception maybe of some older seniors whom went through the 30s.) This should mean with vacations and the normal calm before the storm that we have at least two or three weeks of lower volatility and at some point shortly after Labor Day that we will have that storm and the move sizes we have today will be lighter than they will become.
1615EST - Not adding to the PUTS and will be back after 8pm With the next update.
Tuesday, August 9, 2011
If you panicked about the stock market going down, well guess what you have an easier decision on your plan. Maybe it is hard for you to pull it and if that's the case I don't know why you are in it. Maybe you think its going higher and good luck. I will be back later.
LETS CONTINUE WITH THE FAKE OPTIONS GAME AND WITH THE MARKET SELL-OFF THIS MEANT TO SELL ANOTHER PUT ON THE CLOSE. THEREFORE THE FOLLOWING WOULD BE THE FAKE PORTFOLIO
5 CALLS AT $44 COSTING 0.27 CURRENTLY PRICED AT 6 CENTS
1 CALL AT $42 COSTING 0.23 CURRENTLY PRICED AT 11 CENTS
1 CALL AT $40 COSTING 0.29 JUST ADDED
WITH THE $35 PUTS AT 0.84 THEN ANOTHER ONE WOULD BE SOLD AND THE ABOVE CALL OPTION HAS JUST BEEN PURCHASED ON A FAKE LEVEL
3 PUTS AT $35 COSTING 0.39 CURRENTLY PRICED AT 84 CENTS
1 SOLD AT 84 CENTS (+115%)
1 SOLD AT 76 CENTS (+94.9%)
The added calls are more of insurance or hedges because if the market does not sell off then it will go higher most likely and this can cause profits. If this call option doesn't win then I can maybe start to get 200-300% gains in the remaining 3 PUT plays. Again this is a casino game and I am treating it as such and thus just documenting what seems obvious in +/- terms.
Monday, August 8, 2011
1203 EST UPDATE - As I write this the price of silver is $3925 from its highs of $3934 a minute ago and the period closed three minuets ago at $3918. Also my 1141 update had the price at $3949 and it was $3910 a minute before the chart closed the quarter session. Therefore the move went from these points lasting a little over an hour 3947-3851-3957-3918-3933*(not done yet). This is volatility
1141AM EST UPDATE - Market is volatile, but less volatile as expected and these are my expectations. Don't get me wrong, it's moving along pretty good throughout the session, but I was expecting a three dollar day from top to bottom today and so far that has not transpired. There was some selling that occurred today from 10:36 to 10:59 New York time that brought the fixings from $3947 (100oz) to $3851 or a drop of about a full dollar per ounce. Since then it has come off its lows and it is currently at $3949 and therefore back to where it came from showing us a failed move.