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CLETE
Doing a Little Buying Here
posted Jun 07 '12 by clete
I went ahead and bought a little UPRO on this bounce of the S&P500 today.
I also bought a little AGQ as well. Silver broke above the little shelf of resistance and confirmed a new higher low. That's enough to get me started building a position.
Seems like there a little talk of more Fed fiddling with things. We'll see if it turns into a significant move to the up side or if the Fed is going to learn a lesson in diminishing returns. Regardless, I have less than 5% of my account at risk in each position - no worries either way.
Clete

GOODSTEWARD
Doing a Little Buying Here
posted Jun 07 '12 by goodsteward
AGQ: 150 day MA is below 200 day MA. Price is below 150 day MA.
What's your strategy?

GOODSTEWARD
Doing a Little Buying Here
posted Jun 07 '12 by goodsteward
AGQ: 150 day MA is below 200 day MA. Price is below 150 day MA.
What's your strategy?

Joseph
re: AGQ
posted Jun 07 '12 by joseph
Silver just broke through a Fibernanke support line!

CLETE
Re: AGQ
posted Jun 07 '12 by clete
Great question!
First off, don't trade based on the AGQ chart. Trade off a chart for silver. Either SLV or the silver futures ( /si on ThinkorSwim) will do.
The reason you don't want to use the chart for AGQ is because its a leveraged etf which moves based on a percentage of the day's move of silver, which means it goes down faster than it goes up, which means the chart is sort of screwed up.
I personally use the actual silver futures chart and I'm playing the bounce off major support at $26.665. It's bounced there now four different times (counting this time).
$26.665 seems like a weird price to use as a support line, right?
It happens to be what is called the G2 line, which you may have never heard of before. There was this trader back a hundred years ago named W. D. Gann. He had all sorts of weird ideas about trading but he was also the most succesful trader of all time. Anyway, there are four major lines on any chart that act as major support or resistance. The two most important are call the G1 line which is simply half of the all time high and the G2 line which is half way between the all time high and the all time low. $26.665 is the G2 line for silver. The G1 line is just below it at $24.91.
One might ask why is the G2 line acting as the support and not the G1 line. The simple answer is that the G2 line happens to also be seen by anyone using a Fibinacci retacement study and the more people who see a line, the stronger the support or resistance it becomes. Isn't it interesting that the first time silver bounced at these levels it wasn't yet the G2 line? The G2 line is based on the all time high which wasn't set until four months after silver's first bounce in the low $26's. Gann was weird but he was right. If you haven't read anything about Gann, you should. It'll make you money.
In addition to all that, it just so happens that on this particular bounce, the G2 line is also being reinforced by the 150 week moving average.
Considering the fundamentals of the precious metals market and the silver market in particular, I find it unlikely that silver will close a week out below the G2 line and its nearly implossible to imagine silver closing below the G1 line!
However, if it does manage to break that support, short the crap out of silver because everyone in the world sees the support in the lower $26 range and if it breaks everyone will sell at once. I guarantee you there's multiple millions of dollars worth of conditional short sell orders out there just in case silver breaks that support.
Incidentally, if siilver does break below its G1 line, it will almost certainly go all the way to its G4 line which is all the way down at $15.08.
Clete

CLETE
Market Gapping Up
posted Jun 10 '12 by clete
Last week I mentioned a potential inverse head and shoulders pattern forming on the SPX with the neck line at aproximately 1335 or so.
The futures market is currently trading just above that. The reason that's important is because, if it holds, there's going to be a lot of dispointed bears out there.
Having said that, the 50 day moving average is now just over head. That's going to be the real test. If it holds then we end up with just a slightly lopsided head and shoulders pattern so this still isn't the time to be going all in just yet. It is, however, looking more bullish by the day.
Clete

CLETE
Gap Not Holding
posted Jun 11 '12 by clete
Well the gap up on the futures market didn't hold.
Now the thing to watch for is disapointed bulls.
Dispointed bears one day, disapointed bulls the next.
That means SOH!
(Sit On Hands).
Clete

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