Saturday, September 8, 2012

Market/price similarities

I have written in the past about the power of triple tops.  In essence, by the time the price makes it to an old high for the third or fourth time it usually goes higher because there is no reason for the price to be that high unless it IS going higher. Kapish?

Here are a couple charts. One is a weekly of the silver price of SLV. The other a more current weekly chart of the Russell Smallcaps IWM.

The way the price moves up and out of a triple top is often dramatic. The price essentially has to find a new normal range and the initial move is usually to the top of the next range.

Given all the bad news in the world economies nowdays it seems hard to believe that the stock markets could go much higher. And maybe they won't. But I have learned over the years that all markets are pretty much the same. They are all quoted in money. And it is money that is being traded/invested. And money is a commodity that is used to place a value on other things. When the supply of any commodity is increased the price goes down, particularly when demand is low.
The central banks of the world are INTENT on making more money available to the world. This should drive the value of money down. This will be reflected in the price of other things going up. Stocks are things. As is gold, silver, oil, timber, land, houses etc.....
Until interest rates rise enough to stifle or constrict the amount of money being created the economy should see inflation.
So despite all of the bad news it is possible for the stock markets to go on a sustained run higher. The same way gold and silver have done over the last few years.
The charts:

And awhile back I featured the chart of GASL. Pointing out what appeared to be accumulation and a bottoming pattern. I mentioned the way that the SLV and GLD charts looked similar in shape. The breakouts have happened in GLD/SLV. And it looks like GASL is getting ready to join the fray...

Control risk,

This just in!
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