general visitor

Silver ETF SLV Hits Higher High on 4 Month Record Volume Today

by

The SLV ETF continues to trade like a champ with 35.78 as near term support.  The SLV today pushed to a higher high on record volume, the highest in about 4 months.  This to me is a bullish sign despite the fact that it had a somewhat bearish looking reversal by end of day.  In the after hours session the SLV managed to remove most of the intra day decline today.

I have drawn in some channel support lines on the SLV chart since the August 2010 time frame and I am able to start to speculate on some early possible targets and resistance points for the SLV ETF.  The SLV ETF is roughly about one dollar less than the futures price of silver.  I drew in some channel resistance lines that look like broadening wedges on the SLV ETF and it makes the case that the SLV will run into a strong resistance zone near the 41 to 42 range.  This is interesting because it also matches close to the silver price peak that I pointed out in the silver futures in 1980.

If you look carefully at the chart below you will see how I come to the conclusion of a 41 to 42 range stopping or pausing point for the SLV.  It is a point where the current broadening wedge meets the channel line of the previous run up in the SLV from the 2010 time frame.

Read more

Mini Bear May be Over in IWM by Tomorrow March 25 2011

by

The mini bear we have seen in the market indices may be officially over by tomorrow near the open.  The IWM continues to trade right up to the recent down trend line that has defined this mini bear and is likely to bust above it tomorrow on the GDP report or even gap up above this resistance.  I pointed out in a previous post that the market would likely move into a stance where the GDP becomes the ‘decider’.  This appears to be the case now.  Also, the inverse head and shoulders on the sp500 appears to be filling out in correct formation as well.

If the GDP tomorrow is a horrible number then everything I just wrote in the previous paragraph is likely to be incorrect.  But near term momentum and even the after hours action today seems to suggest otherwise.

If the IWM and the other market indices get a break north tomorrow and then continue to drift higher into end of March, they will have once again been able to evade the potentially very bearish quarterly shooting star candlestick.

If that occurs, it would once again speak to the almost astonishing (or manipulated by easy money?) ability of the market to evade bearish signals and turn them into bullish continuation moves.

Read more

Gold Price ETF does a Teaser Life Time High Today

by

Today the gold price ETF and the spot gold price rallied up to life time highs but then sold off end of day to settle and close under yesterday’s low.  I have seen this type of action before on the gold price as it attempts to break out to new all time highs.

At this point I do not believe the head fake.  I think ‘they’ are trying to create the illusion that this was a reversal sell off and important rejection of the highs to be followed by another leg down.  I think if they had closed the GLD ETF down much more, perhaps 2% or more it would have made a much more dramatic statement.

Instead, we see that the GLD pushed to new life time highs and tested two important price swings in early March on equal or greater volume, a positive sign.

After hours the GLD bumped up quite a bit, moderating the potential short term bearish looking candlestick.  But again, it is only moderately bearish to me.  I think today is a head fake to sooth the gold top calling crowd.

One mental trick to use when viewing intra day price reversals like we see in the GLD today is to see how negative a close occurs relative to the previous day’s candlestick.   In some cases one can see a strong intra day reversal and yet the close did not even manage to get under the previous day’s high.  In my experience those reversals are usually just consolidations rather than all out bearish trend changes.

Read more

Stock Market is Likely to Trade Decisively Off of Friday’s GDP Number

by

The way the market is trading right now suggest to me that it is going to make a decision off of the GDP number this Friday.  Odds seem to suggest that the number will either be in line or good which would seem to support a break out type move.

In recent days I have been focusing on the IWM Russell 2000 ETF as a possible leading indicator.  The Silver ETF has been perhaps the ultimate leading indicator (new 52 week highs today) with the Gold ETF being the second best leading indicator (Right at previous 52 week highs, but not new 52 week highs yet).  Then I would say the IWM falls in third place.

I do not want to ‘pre judge’ the IWM ETF too much at this point.  My bias now is that it is headed for an upside breakout from the current congestion range, but depending on how the end of week shapes up, it could still be at risk of a move back down into the neutral zone.

Making any commitment now would be a mistake because the market has not made any clear decision yet.  It still has to work out a few small battles in the near term.

iwm20110323

A break down through the short term up trend line is the first indication that something is wrong with the potential northward breakout.

Read more

Silver ETF SLV Continues to Blast Higher to New 52 Week Highs

by

Hi Ho Silver!  Silver is a leading indicator for gold and the stock market apparently right now.  It has blasted today to new 52 week highs and the RSI is currently right under the powerzone level of 70.  A blast above RSI 70 will send SLV into the powerzone and we could see some more big moves to the upside.

Gold was also strong today, but silver is leading the pack.  I suspect that both gold and the broad market will head higher again soon and silver wants to lead the way. What a great leading indicator.

Volume today on the SLV ETF nearly doubled what it was yesterday, a positive sign.  When I say that the SLV could see some extended big moves I am speculating this to be the case for the simple reason that silver is in a strong parabolic portion of its move where momentum is at an extreme.

Of course this is nice as long as the SLV keeps going up, but nothing grows to the sky forever.  Eventually there will be a violent pull back, especially in the more volatile silver sector.

It is a good idea to draw tight up trend lines and then just stay long as long as the up trend is not violated.  If it is, then it is the perfect excuse to stand aside until a clearer picture develops.

slv20110323

Read more

SKY MOBI a Potential Huge China Growth Stock

by

I really like the potential of MOBI, a Chinese Growth Stock and an IPO as of 12/10/10.  I found out about MOBI through MarketClub’s Powerful Chart Analysis and Smart Scan Tool.  Some Chinese stocks have taken big beatings in late 2010 and early 2011 as there have been some issues with their accounting and business practices (ie. CAGR).  However I do not think this is a reason to paint all Chinese stocks with the same brush stroke.

MOBI is in the mobile applications space which is currently a very high growth area.  The mobile internet applications market is a great growth sector and probably even more so in China.

The Sky Mobi investor section of their website describes their business as:

Sky-mobi Limited (Nasdaq:MOBI), operates the leading mobile application store in China. We work with handset companies to pre-install our Maopao mobile application store on handsets and with content developers to provide users with high quality applications and content titles. From January 1, 2007 to September 30, 2010, Maopao had approximately 479 million cumulative users. Over the same period, we offered over 770 applications and over 61,000 content titles and the cumulative number of downloads reached 3.6 billion.

MOBI has a very small float in the 7 million share range.  This means that this stock can move very fast and since it is an IPO there is no previous resistance in terms of the price trend.

I really think MOBI has a good shot at getting to 20 dollars close to double the current price range.  This stock has the growth, the market and the sector that are very favorable.

Read more

It is all up to the IWM Russell 2000 ETF

by

The Russell 2000 during the recent ‘earthquake’ correction has held up surprisingly well.  During the midst of the correction I had eyed the Russell 2000 several times and it bothered me from a bearish perspective that it was not breaking down from support.  The decline was too weak.

So sure enough now we see the IWM Russell 2000 small cap ETF blasting back inside the range having created a 2B Buy Signal and a confirmed daily MACD histogram buy signal. 

Like an animal trying to find its way out of a cage, the IWM is now once again near the top range of the recent pattern and it must make a decision whether to initiated a northward breakout or fall back within the neutral range and then decide later what to do.

I have seen this type of chart setup many times in the past and it looks to me like a northward breakout will come soon, perhaps by this Friday 3/25/2011.  The IWM 2 month pattern looks once again like the typical sideways type corrections that we have been seeing frequently in recent years.  These sideways corrections, that show an inability to get real % damage to the downside are the most bullish type of corrections.

Read more

Silver Futures Trading with Monster Momentum

by

The relative strength of silver futures relative to gold is quite amazing to watch in recent months.  The current tape action of silver futures and the silver ETF is almost better than textbook type price action.  Up days are much more frequent than down days, and when an occasional down day does occur it is often in the form of a constructive candlestick formation.  The up day price bars how a persistent replenishing demand for silver and show that strong hands are in control.

From March 7 to March 15, 2011, silver futures took a bit of a hit which was in tandem with the sp500 ‘Japan earthquake’ correction.  But now during the recent 3 trading days we see that silver futures have bounced right back up to near the 52 week high range almost instantly like a powerful spring.  Silver has basically said if it had a voice, “I don’t feel like correcting now and will strongly reject the 33.5 range and try the other side”.  The other side in this case is 36.50.

Both Silver and Gold have been great early indicators or sensitivity indicators to look towards when trying to gauge the potential for how serious a broad market correction will be.  If you see gold and silver very reluctant to give back ground during an sp500 correction, then it could imply the stock market correction will be limited.  This appears to be the case right now.

It looks like the other side is going to be busted in short order to the upside which could even further accelerate a parabolic move for silver towards the 45 to 50 range.  This could be a very fast move if silver is able to successfully break above 36 with conviction.  If we look at the move that started in late January 2011 and then measure up to the recent minor correction, it could imply that the recent correction is serving as a pausing point and half way move point for a follow on move of about 9 dollars which would target the 45 range as a target.  If correct, then this 45 range target could come quite quickly.  As I alluded to several times before, the metals are moving into parabolic mode which means faster moves with possible multiple unfilled continuation gaps to the upside.

Read more