Gold/Silver Ratio (weekly info)new low 32.647
trend=down
low= 32.647
rev= 37.864; mid= 35.256
This ratio is rapidly approaching its old ratio of 16:1. This week started with a gap down. Silver will continue to outpace gold until someone cries "Uncle" or "No mas".
EWZ (weekly info)-no change (above mid)
trend=up
high= 79.63
rev= 75.27; mid= 77.45
Last week was a rejection of the evening star candle formation as it refused to confirm the setup. It has pushed back over the lower trend line. The rising wedge looks like a break to the upside is coming.
SKEW (daily info)new high 131.78
trend=up
high= 131.78
rev= 119.26; mid= 125.52
Skew made another daily higher close and is now trending up on the daily 3LB. Does this mean that the buying of OOM options are increasing? Does "Sell in May" start a week early? Fear of China threatening to unload foreign reserves (again)? Also since the VIX chart had another weekly low should there be that much complacency when so much is going on?
38 comments:
Silver unbelievable. Very powerful.
@At,
thanks for the charts as always.
@Q's
Hate to be the one to break it to you but I've seen at least a dozen people cover the inverse H&S for over a week and half now, so it's widely being discussed already, minimum measuring target is above 1,400 S&P if it's a true pattern, the fact that AAPL appears to have had a failed H&S with a neckline break gives weight to the overall pattern, failed H&S are very profitable to trade, apple shorts beware.
Primary Dealers versus Bill Gross: "You're wrong and we're right."
http://www.bloomberg.com/news/2011-04-24/gross-s-bearish-treasury-bet-clashes-with-dealers-seeing-scope-for-rally.html
http://www.hussman.net/wmc/wmc110425.htm
"While there is clearly some concern about the long-term sustainability of U.S. fiscal deficits, I remain convinced that there is no material credit risk in U.S. Treasury securities. There will certainly be fiscal difficulties to deal with, since we can't actually inflate our way out of the U.S. debt (a large proportion is short maturity and would have to be rolled-over at higher interest rates in the event of inflation). Still, those difficulties are on the 3-10 year horizon, while the case for Treasury duration would be largely confined to the present business cycle. For now, we are maintaining a fairly short duration, but again, the main variable to watch at present is the level of credit spreads.
In my view, the commodity hoarding that predictably resulted from QE2 has increasingly taken on the earmarks of a bubble (complete with a tendency toward increasingly frequent and shallow corrections within a largely parabolic trend). Moreover, the Fed's SOMA portfolio is now at $2.46 trillion - and given that QE2 targets $2.6 trillion and has been running at nearly $90 billion of purchases a month, we're looking at only about 6 weeks of QE2 remaining unless the Fed reloads. We've been generally positive on precious metals for over a decade, but we're also well aware that commodities can experience profound spike losses even if the long-term thesis is still valid. If you study commodity movements, and look at a long-term chart of nearly any commodity, one thing that should be glaringly obvious is the tendency for "V-type" reversals (which we don't see nearly as much in equities or bonds). My friend Linda Raschke has observed that "range expansion" moves (high-low ranges much larger than usual) are often indicators of "exhaustion" - and we certainly see that in silver and gold prices here. Last week, we clipped our precious metals exposure to less than 4% of assets in Strategic Total Return."
...Some are parting with the precious.....
...I think econohistorians in the future will label this time as the "Age of Bubbles"...
Good morning all! Interesting weekend here. Had a conv. w/ neighbor who is a mortgage banker. He said the the gov't recently changed the rules for how mortgage brokers & bankers can be compensated. Can't say that I got all the details (was buckling stubborn rollerblades at same time) but the gist was that instead of being compensated for loan performance over the entire life of the loan, compensation now becomes even more front loaded, origination based instead of performance based. While I don't know how different this is from the past, it seems to me that this is completely the opposite from what we want to be encouraging as a policy basis. When I said that to him, he basically said that he agreed, but that the big money center banks had lobbied heavily for this change. I guess they are planning on putting everything back to the gov't. Wonderful.
My 4 year old had so much fun yesterday that I was up all night cleaning up chocolate vomit.
Did I mention that I only just had the carpets cleaned last week?
B22, was being sarcastic, guess it didn't come across thay way. wow, silver almost hit $50 overnight, 5 day chart looks like it's up about 20%.
~48.04
http://quotes.ino.com/chart/?s=NYMEX_SI.N11.E
witnessing the 'blow-off' on the recent uptrend?
AAIP
re: silver
andy put a silver chart together several weeks back that had the textbook look of a "bull flag" on it, flags are sometimes referred to as "half-mast" patterns because they are commonly seen at the half way point of a move....one can go back and see what that was to perhaps get a general idea of where the silver chart is now. The clarity on those charts has picked up a ton since that flag played out.
Jennifer, were you more grossed out by cleaning up chocolate vomit or by learning what your mortgage banker friend told you? ;-)
>> the textbook look of a "bull flag" on it
Silver is a bull riding a rocket shot from a cannon.
"Silver is a bull riding a rocket shot from a cannon."
thats what bull flag means
;-)
randoms:
1. the VIX, dead? alive? doesn't matter?
2. 7 of the last 9 mondays have been red
3. $TED, rising trend since 1/24
4. stocks of interest, CSX, CIE, LULU, CLNE, F, AAPL, DD, BA, CAT, CHK
5. Seems to be some divergence between market price and insty selling pressure, which isn't strong, but they are not accumulating
6. seems lots of put buying happening lately, another short squeeze above 2/18 for S&P?
7. then there's this thing:
http://www.ritholtz.com/blog/wp-content/uploads/2011/04/4-22-11-Daily-DX-Swing.gif
so is the outlook for SLV truly $100? i remember pretcher stating $8 not too long ago. his last monthly commentary had nothing to do with predictions and was more sentiment/commentary. does his EW's hold any weight at this time?
EW's always hold weight of course, the mistake is thinking markets are always predictable.
imo, I wouldn't bother paying much attention to EWI's calls on metals though, because they blow. they advocated big CORE position in the metals.....but they told you to buy them in the year 2000, so just keep that in mind when they make short term calls against that one as they "can't be wrong" on the metals as a result Prechter is a gold bug, self described, regardless of his near term views on the dollar, but I don't think he can trade metals short term, and I can tell you without a doubt that Hochberg can't, he labeled silver a 1-2 down at least 2-3 dozen times in 2009, I stopped getting their short term stuff a while ago but I don't think they've had a silver count for almost a year.
The silver seller has awoken. Back under 47 (from a high of 49.78). Someone nervous about margin calls?
in re: Silver. So far, all it has done is fill the overnight gap. Though, the action does look like things you see near a peak.. Big Move Up in a short trading period, followed by an engulfing move down.
This IS becoming 'fun.'
Karen,
Took some good pictures this weekend, and put them on the blog. I can hardly stand to be inside this morning.
@Market Smasher
Who knows what the 'outlook' for SLV is?...
As for me, I've limited myself to saying:
- First, that I liked it (going back to last August)
- At $30, that it would hit $50 before $21
- That as it approached $50, you'd start to see some wild swings
- That it was likely to see those crazy moves happen around holidays (like Easter weekend and/or May 1st - Labor Day)... voila
- That 'paper' silver, IMO is not the place to be
- That it would surely 'correct' at some point (but I was willing to say back when it was $30 and looking overbought, that my bet was that it would hit $50 (so a 61.8% retrace (from $50 back to $16, would be $30 - therefore I thought it was still worth it to average in with a purchase at that time)... I commented precisely on that in the comment section of this blog
---
So 'technically', if someone were interested in trading paper silver (via SLV or whatever), I think bens' idea of looking at the BULL FLAGS might provide good technical levels...
Anecdotally - You gotta think that the ride is going to be over for some at $50... But it also seems that 'shorting' it at $50 is all too obvious...
Futures on certain contracts are still in backwardation... OTOH, I'm starting to get the idea that granny's fork collection is going to start coming out of the closet (and actually has been)...
In fact... I can 'see' that (because when I go into coin shops the past 3 months, more and more people are lining up to sell and stick some cash in their pocket)... They're handing over their spoons & forks to the JP Morgue (that's why I have 'criticized' the FUBM movement at ZH)... I have not made a purchase since $30 (nor have I sold any)...
It would seem to me that for PHYSICAL holders, the time to sell has less to do with price and more to do with the 16:1 gold to silver ratio (which has made an impressive contraction from 80:1 - but is still far from 16:1, and not even near the 10:1 that it has hit periodically on overshoots)...
I've published these same thoughts here many times before...
in re: EWI and Prechter. That Silver call was predicated a lot on his calling the 2008 decline a "five wave" move lower. At the time of that assertion, I showed why, on a chart, it could NOT be labelled a five wave down.
I wouldn't recommend EWI to anyone. He'll get his groove back someday, but not until he dumps that Stu Hochberg fellow who sees everything as a 1-2, 1-2 type development. Pfft.
AT,
what I think will happen is EWI will label all moves in this upcoming C wave as 5 wave impulse moves, it will appear for a time that they are "hot" but I think the large overall view is flawed and so they'll eventually lose whatever they make in the C wave. When your big count is wrong, so are all the lesser degree counts.
the candles on SLV are getting interesting, today could set up for a two bar reversal, or might be indicated today with, we'll see how tomorrows candle shapes up but it should give a "tell" for the rest of the week.
fwiw, we aren't likely to see another bull flag pattern in SLV, that wouldn't be likely until after we correct and after the first move up out of that correction, I'd think up here it's much more likely to see triangles/uncertainty.
AT -- is your chart from 2008 available on Scribd? I'd love to see that, it was before I discovered you. Never realized that the 2008 down move being 5 waves was subject to debate.
Jennifer,
after reading Neely's book, there is not reason to believe 07-09 was five down
bring that up at Dan's site and see what happens, orthodox wavers think it was a textbook example of a five wave impulse.
along with many beneficial things in GN"s approach is the realization that a large number of wave patterns conclude before the peak/trough
that makes sense to me as the best way to apply fibo to markets is often by NOT using price extremes.
volume on SLV is huge right now, too early to tell but that looks like a buying climax.
@ben22
Just using the SLV chart... (& an unsharpened crayon)...
If you take the 6/06 lows and 'bottoming' process that occurred between 9/08 'Lehman', and January 2009... And measure those didtances to the March 2008 peak...
- 161.8% of that distance is the $26 level (where there's a flag)
- 261.8% of that is $37 (if I recall - some were calling that the FUBM line... anyway there's a gap on the weekly candle there)...
- This mornings peak was 161.8% of the distance from the March '08 peak and the FUBM line
- The $26 level is a 61.8% between the FUBM line and the March '08 peak
Just saying...
Jennifer,
Just because you asked for it, I dug deep into the archives and produced a 9/8/2009 chart of Silver and attached to my Sunday Post along with some other commentary.
It's always fun to look back at the old work and see where it was wrong and right...or misguided.
Thanks, Andy. Can't wait to read it!
Rich dude coming to realize he's going to have to pay more taxes...
http://www.businessinsider.com/steve-schwarzman-bloomberg-monday-2011-4
Stuff you need to know... (file in the 'super important things' category)...
http://www.chacha.com/question/how-many-calories-are-in-a-peep
I highly encourage all "five days a week" type workers to take an occasional Monday off. I've gotten soooo much done today....For some reason, my weekends are always full. Need a Monday to "clear off the To Do List."
Man. Today was a snoozer.
All the volatility is out of Treasuries. That's bullish...
JBTFD. In TLT.
in re: S&P Futures...was a decent day for bulls...all we did was create a choppy/congestive look on the intraday charts...not really a "bearish" pattern at all.
LB. That HYG has been just a narrow range "warm cup o' spit" for several months now. Only money making strategy there would have been to short volatility for the last few quarters. Pathetic, it is.
Lo siento. Me estaba M.I.A. todo el dias.
It's hard for anyone to trade until we see whether the situation with respect to the government debt of Greece can best be described as:
A) ACROPOLIS NOW - The Horror, The Horror....
B) Kick-save, and a good one!
Greek 2y at 22% and 10y at I think 15%. That seems stable.
High yields are good, right?
High yields ARE good.
I kno, right? (Scrunchie nose)
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