Interesting comments from today's website goldprice.org's Daily Silver and Gold Price commentary posted Sat 20 Oct Confused markets don't rise, and now bewilderment beclouds the horizon: currency turmoil, weak dollar/strong dollar, presidential election. That sky will clear, but meanwhile the storm. The SILVER PRICE fell through its 50 DMA (3246c) today to its 300 DMA (3205c), but closed barely above that at 3207.3c. The 300 Day Moving Average acts for silver as the 200 DMA acts in other markets. After breaking above the 300 in September's first days, it was to be expected silver would return for a last kiss good-bye. That's how it's behaved before during this bull market. The 200 DMA stands beneath at 3094c, and that's an often seen target of corrections. Today's close fulfilled a 38.2% correction, and 3112c will fulfill a 50%. Of course, volatile silver often overshoots, so don't overlook the 61.8% correction to 3013c. If all also fails, there's a floor at 2840c.
Is there a way to translate that into a more understandable language ? I'm new to all this, so this is like understanding ancient Sumerian to me.
daily moving average is a trend line that averages all daily prices over the period (200 DMA is period 200 days). It could be seen as a X days general price direction. Some people monitor it in order to recognize a market reversal before most others, so that they can sell first, when the price is still high. For a pure stacker, this is all irrelevant, best is to buy after most of those techtalk guys dumped, and the price stopped reflecting them. That's more ounces for the same dollars, and that is what matters. 3094c is just a silver price expressed in cents. At least I think so, because this is stuff outside my field of interest. I rather look at what people do now, than looking at the result of what they did. Just following trends easily throws you to the losing side. Look, the silver price did +5%, would this be IT? Next day, woohoo, again +5%, this certainly looks like IT! Next day, omg, again +5%, this IS IT! Let's back up the truck and BUY! Well sorry, but by then, you are paying others free rides. The best moments to buy is when the silver market appears like a funeral, and everything looks dull boring and sad.
Can't say thanks again, but I can add fib retracement from the high of 35.40 and the low of 26.12 is 31.52 for the 61.8%.... that's my target... hope we get there
Here is a strong case for Sub-$30 prices. [youtube]http://www.youtube.com/watch?v=_wX8YoH4R9E[/youtube]
I see 4 reasons for the price to not continue dropping, and going up again. 1) Last month, the Federal Reserves balances BASE and EXCRESNS (you need to combine both to know it) show that 130 billion of the QE's entered circulation, which is the first such big change since 2008, meaning that todays circulation is 2008 + 42%, while the % before always hovered around 20, thus now all of sudden it doubled. It indicates that the US side started to spend, and due to todays industrial/economical situation, it will 100% translate to higher prices. 2) This is also confirmed by M1V, the so called 'velocity of money', which reflects (in a poor fashion though) the spending level, since 2008 and QE1, a steep drop occurred till QE2, then again a steep drop, which recently broke off sideways. 3) Comex' total silver futures position that greatly increased in the last uptrend ($27 to $35,5), similar to post QE1 / 2009, while the price dropped already to $32, did NOT fall back substantially this time, which is also a trend break, because since may 2011, all bigger price uptrends and downtrends happened in line with that total net position (see the green trend line on http://finviz.com/futures_charts.ashx?t=SI&p=w1 ), so this $3 price downer was not due to the futures market this time and also not due to ETFs, as their stock trends indicate, so the 'smart' money decided to hold. They must have a reason for it, and 1) 2) might be that reason. 4) The Euro sat before the $27 to $35,5 uptrend near a longer term low of 1,2, which also occurred mid 2010. The governments/central bankers thus cannot permit it to weaken again, because that would make things in EU again more expensive, while unemployment rises and month after month new recordnumbers companies default. So the Dollar Index is strong (near 80) and can thus afford to be weakened in order to support the euro (its a mathematical relationship). So likely the commie planning decided to weaken the dollar using 1) and 2), because price risings will again cause those that have to pay off debt, to have less left on the end of the month, and thus more prone to failing the pay off. This doesnt advise to stack silver now though, because I think the eventual above re-uptrend is just temporary. But 'players' may see an opportunity. Don't forget though, you're competing with a large futures market presence, smart money. They are very well in dumping ahead of others on the silver market, including those in ETF's.
