Tuesday, November 30, 2010

Dissecting the March11 Silver Chart

As you know by now, I am not a believer in technical analysis as it pertains to the current situation in gold and silver. However, because so many traders and computers are intent on making short-term buy/sell decisions based upon chart position, a simple chart review can give you a pretty good idea of where the EE and traders alike will act.
With that in mind, dear reader, behold this fine-looking chart for moment. It is a 3-hour, March11 silver.
Let us dissect points 1-6 for clues as to what lies ahead.

1) This is the peak from three weeks ago today, $29.40 on the March11 contract.
2) Rather predictably, a short 36 hours later, silver had rebounded almost exactly 50% to 28.24
3) The selloff wasn't over, though, as silver double-bottomed very nicely on 11/16 and 11/17 at 25.05 and 25.10, respectively.
4) On its way back up now, silver moves decisively back through $26.50 on 11/18 and then, importantly, tests that level as support on 11/19.
5) 26.50 held which set up a run back toward the critical point #2 of 28.24. It almost made 28 on 11/22 before a frightened and scared Blythe took action and tried to shove it back. She almost succeeded. Note how silver traded back to the critical 26.50 level (see point #4) three times on 11/26, 11/28 and 11/29 and, three times, support held. This is why I was so encouraged by the action yesterday.
6) Brings us to today. Not surprisingly, March11 silver hit 28.39 (see point #1) before being shoved back. As I type, it stands at 28.06.

So, what can we expect next. Since we did traded through but did not close above 28.24, I'd expect a bit of short-term consolidation between the high of today and, maybe 27.80 on the downside. The consolidation will probably last into and through tomorrow. It doesn't necessarily have to; it may just keep on rolling. However, since we couldn't close above 28.24, a "breather" is likely before the test of the old highs.

But, don't worry. That test of 29.40 is coming. It is, most definitely, coming later this week. Just like the $26B in POMO that is most definitely coming later this week. And, yes, the two are related.

I hope that helps. I'll try to add another post later this evening, after we've all heard from Harvey.


  1. Nice post Turd... it's been a long haul, but looks like PMs are ready to go... and I look forward to your take (and of course, Harvey's as well) each day!

    p.s. Please don't "Robo" your charts... the personal touch is a great... btw, had a few issues with sign up (maybe a bit more instruction for us complete idiots...lol)... also, couldn't get my usual pic to upload for some reason.

  2. interesting times,funds head out of traditional stock markets as those in the know realise Europes problems are really the worlds problems and that as the contagion spreads so do the effects,along with physical metal not paper demands which means investors can,t be brought off with freshly printed Fiat.A breather it maybe but buy the dips while its affordable,the day you need it is the day you can,t buy.Top blogg Turd.

  3. In my best Monty Burns voice: Excellent.

  4. What Bart said.

    I stop here several times a day, and it's worth the trip. Thank you Turd. Now that's something I thought I'd never say...

  5. Follow up to mgraham0120... I signed up as SRV-ES339 but my email based ID comes up... any idea what I'm doing wrong?

  6. I'll second the word of appreciation for the hand-noted charts. Anybody could do it, but few do, so it really "brands" your product. Nice touch.

  7. Incase Turd or anyone else hasn't heard it.
    Bart Chilton interview:

    Look forward to hearing more from you.

  8. Hello Turd.
    Thank you for putting the effort into this wonderful blog! I am now a keen follower. To show my appreciation, I've donated an ounce of silver ($28.02 via your donate button)! Thank you!

  9. Sincerely appreciate all the time and effort you put into the blog. Please keep up the good work.
    Donation included!