Daily Murmur 03/05/11

by Gary Glover

All the signs point to a top in Silver.  The old high of US $49.45 per troy ounce recorded in 1980 squeeze was marginally broken over the weekend before rejecting this level sharply. 
There was a massive spike in volume at the high looking at the longer term charts and this is a very strong sign of exhaustion. 

Over history, all blow off trends, ie strong vertical trends end with a ¼ year time expansion, ie 90 day vertical drive from the last swing low.  (gann theory)  The last low here was Jan 28 and Silver has run straight up in that 90 day window over the weekend past.  Timing was the last box to be ticked here and this is a perfect sell set up.

We also know that once we get a major high in place we get strong price rejection and considerable volatility.  A sharp sell off like we experienced yesterday dropping from $49.5 to $43.5 (15%) in 24 hr window is what normally occurs at major peaks. 
All the boxes are ticked here, exhaustion, volume, price rejection and timing. 
Gold, although not half the bubble of silver has a very similar price set up at the moment and is vulnerable here also.


Gary Glover is an Authorised Representative (Rep No. 259215) of Novus Capital Limited ("Novus"). Novus is a holder of Australian Financial Services Licence No 238 168. Novus, its directors, officers, associates and employees each declare that they, from time to time, may hold interests in financial products and/or earn brokerage, commission, fees or other benefits from financial products mentioned in this e-mail or attached documents. Unless specifically stated within this page or an attached document, any information communicated by this e-mail constitutes unsolicited general financial product advice which has been compiled without regard to any investor's individual objectives, financial situation or needs. It is not specific advice for any particular investor. Before making any decision about the information provided, you need to consider the appropriateness of this information having regard to your individual objectives, financial situation and needs and consult your adviser. Any indicative information and assumptions used here are summarised and also may change without notice to you, particularly if based on past performance or relate to a future matter.

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