Thursday, April 24, 2008

Trade Alert: SLV

I do not like to guess, so I keep it to a minimum. You can see on the daily chart for SLV that it is now below its 100 day moving average (dma). After the huge double top it seems to be consolidating in a wide range from 160 to 182, it will not likely stay in that range after FED meeting on Wednesday.

But you can stare at the chart of SLV all day long and it will only tell you what has happened. To see what will happen you must look at the chart of the US dollar here. There is a wedge which formed on Marc h 17, in between 69 and 73. Whichever way the dollar breaks from that wedge SLV will break violently the other way. This is key, DON'T LISTEN TO THE FED, WATCH THE DOLLAR. What the FED does is not as important as how the market interprets what the FED does, there will be head fakes and bullshi$ , but the dollar won't lie. To me it seems that the FED and their bosses will want to crush commodities for many good self serving reasons. So in my opinion the dollar will most likely to breakout to the upside, but my opinion does not matter. The market is my master and I will follow the market.

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