Thursday, December 29, 2011

29 Dec 2011

Hard bounce off lows for silver today.  Before it really bottoms, I expect a hard rally, followed by a slow drifting fall to a new low below this low.  That is only because that is how it happened in 2008 though, and its a common chart pattern - breaks through resistance line then settles back to it and tags it.

 Hold long decreased today in the short term.  Remember that moving averages lag price.  I ... think... that this is because the 3 day started to trend down three days ago and just finally went under the 7 day today.  I'm saying this to prove that this doesn't necessarily mean today was weak beneath the covers.  I mainly use this one for divergences anyways, and finding extreme oversold points as this is better at finding bottoms than tops.
 Possible target for the S&P500 is the white line.  I know it seems insane that the "Santa Rally" could continue into the new year, but the market seems to always does the insane thing.  The slope of that white line is about 5 points down a month.  Today it stands at 1308.  If they meet at the beginning of February, it will be 1303, March, 1298, and so on.  My readers are smart so they can do the math.
This is just showing that we made a new high today on this cycle, and that we are nowhere near overbought on TSV and RSI for the long term chart I run.  We are not for the other time periods either, but this was the most extreme.  Humans like extremes to both sides.  Its what we do best and its why we only have two political parties.  The world is much more simple in black and white, but "the truth resists simplicity."  Watch birds sometime, you will notice how each one jumps to each location until they all finally reach that spot, and then, I must assume, the leaders leave again and its a drift of them to that spot.  And sometimes the leaders leave before the others even get there and the other birds have to skip the first location all together.  You can see it in trading and fashion very easily.

New high on this (4 week cumulative highs / lows) today as well for this cycle.  However, the stochastics are high here, but can remain so for a long time. 

"I learned very early and painfully that you have to decide at the outset whether you are trying to make money or to make sense, as they are mutually exclusive."
-- R. Buckminster Fuller

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