Decision Day for Silver

Yesterday, France and Germany came to an agreement to pump 2 trillion euro into the system! The markets were down until 10am or so and I'm sure the news was leaked to the big boys and they re-positioned and markets began to recover and rallied for no reason at all, then the announcement came at 3pm (Ahhh Sooo!) By the time the announcement came most of the easy money had been made for the day.

Silver is down 50 cents this morning, Gold is down slightly and the DXY is down.36 most likely on the news that European banks are going to sell assets to raise capital and  therefore they won't need money from the central banks. This story is a bit odd because if all banks are selling at the same time then who is going to be buying. Makes no sense to me! But two trillion will come in and this is just noise that should be bought. Any weakness is a gift.

On to the silver chart i'm using the SLV only as proxy, don't own. You see the bear wedge/pennant looks ugly, I was hoping with the shorts at lows and with dollar sliding we'd get a break to the upside this week. Yesterday, we had a nice reversal this morning am a bit disappointed in the 50cent move lower, so now the question is do we test the lows of yesterday and finally break above the resistance line or do we breakdown and go to support at 28. I think the odds favor a down move with a quick reversal. I think there is three dollar downside risk with 8 dollar upside, so good risk reward for entry. I still do think we will be above 50 dollars on Silver but we won't get there based on the already strong fundamentals, we need news. With gold trading above 1600, Silver should be at a 100/oz but I am not going to cry about why it isnt there, I promised I wouldnt.

 Gold doesn't look to good either, we need resolution of this bear wedge if we are to move higher, or just some QE will do.

SPX is likely to test the 50dma but that is only under normal conditions all this money coming in, markets reacting to events and policy shits and the fundamentals get changed as the rules keep changing mid game. So who knows, its a crap shoot for those who want to short right here. I would normally top of trading range, looks nice but i'm not betting against the bankers. The bankers are positioned for a rally and by golly we are going to get one.

 Dollar is down a little this morning and a break below 50dma would be extremely bullish for commodities in general. With two trillion coming in from Europe, opens the door for the US to pump some dough in as well and the dollar euro dance continues.

Sideways consolidation as the market waits for QE or no QE so either we either continue the up trend or the consolidation resolves to the downside, as there is no fundamental reason for the house of cards to go down (SPX), i say that sarcastically. QE will wash away all the dirty laundry and up up and a way we go. Watch that 10000 level. Mc O is overbought and Mc SI is in the middle of its range.

On a personal note, I haven't been writing much because I am going through a divorce and was moving and settling in these past few days and now that I am more organized I should be able to write fairly regularly. Thank you for the kind emails, I will be responding to them shortly.