Market Curiosity: Exploring Markets And Systems

April 26, 2011

An alternative pattern to the buy SLW: Island reversal.

Filed under: Just Watching — Tags: , , , — Jeff Fitzmyers @ 2:14 pm

How strong is silver so far?? It took 2 days of high volume to just trade below last Thursday’s low, basis the futures. That is fair amount of buying at a historically, but unadjusted for inflation, high price. So possibly, if the silver price was up a lot overnight and held the gains, there could be an island reversal (or island cluster reversal), or a failed Downside Gap Three Methods in SLW.

Silver is crazy overextended: RSI > 70 on the daily, weekly, and monthly time frames, but has barely corrected. (So far, sometimes price can hold on by fingernails and then drop right as time for a correction is running out.) Price has not even made it to the 10 EMA. RSI > 70 on a monthly time frame can suggest price corrects to the 170 EMA. That’s at $21/oz.

+ Doug Casey: Debunking Anti-Gold Propaganda
+ Embry, Pento – Gold, Silver, Bernanke Destroying the Dollar
+ Ticker Guy: A Technical Look At Silver

It seems I have not posted this wonderful LOG SCALE chart by Nick Laird:

Likely, anyone who wants to short silver is now short and weak longs are out. If silver wanted to freak out a lot of people strongly closing above 50 in a day or 2 would do it. Except for a few out of the money silver calls just in case, my account is flat. But if silver does not start going down soon for real, it will be time to buy.

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