"When misguided public opinion honors what is despicable and despises what is honorable, punishes virtue and rewards vice, encourages what is harmful and discourages what is useful, applauds falsehood and smothers truth under indifference or insult, a nation turns its back on progress and can be restored only by the terrible lessons of catastrophe." … Frederic Bastiat

Evil talks about tolerance only when it’s weak. When it gains the upper hand, its vanity always requires the destruction of the good and the innocent, because the example of good and innocent lives is an ongoing witness against it. So it always has been. So it always will be. And America has no special immunity to becoming an enemy of its own founding beliefs about human freedom, human dignity, the limited power of the state, and the sovereignty of God. – Archbishop Chaput

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Thursday, February 17, 2011

4 Hour Silver Chart


  1. Dan, how do you determine that there's resistance at 32.25? Looks like all clear skies to me.
    Some sort of Fibonacci projection or similar?

  2. I use an Andrews Pitchfork projected out in time and compare that to the price bars to get an approximate.
    It is just a rough calculation but when you are working with new high territory, it is helpful. You can go back and get a long term chart of silver but a lot has changed between who was buying and who was selling silver 30 years ago so I am not so sure that kind of time lookback is really all that helpful

  3. Thanks Dan.

    I learnt my TA from Stan Weinstein (a legend in my eyes). Maybe things used to be a bit simpler, but for what it's worth, his view is:

    "whenever a breakout occurs with a stock moving into virgin territory [hasn't traded that high in past 10 years], this is the most bullish situation you can buy. Think about it. There isn't one person who is long and has a loss"
    (took the book down from my shelf to make sure I quoted him right!)

    Please don't get me wrong. I'm not doubting your analysis. I'm learning from you and I thank you for it. I'm long silver and happy!

  4. Turdle

    There is nothing negative in denoting potential resistance levels on a price chart anymore than there is anything positive in noting a potential support levels.

    What we are attempting to do with our limited knowledge of future events is to merely delineate levels on a chart where we can expect some sellers to enter in more force. If the price blows through that level, it then tells us that there were more people eager to buy at that level than there were sellers eager to sell at the same.

    This is the manner in which Technical Analysis can equip us to be more successful traders.

    When I posed support and resistanc levels on a chart - I am not making a prediction as to future price movement. I am instead pinpointing levels at which I expect to see either buying or selling emerge. Based on how a market reacts to such levels, is how I take a position.

    Hope this helps some.


  5. Thanks Dan, very helpful. I'm going to educate myself some more on Andrews Pitchfork.

    I wonder whether you might annotate your charts when the support or resistance levels are not immediately visible on a naked-eye analysis, or do your followers understand clearly what you are saying?

  6. Hi, I've seen this Andrews Pitchfork on TOS, but have never explored it. I will be learning about is as well!

    Thanks for everything you do, Dan!

  7. Dan, looks like silver took 32.25 like butter. Years ago, I had heard that once something makes an all-time high breakout, it will typically climb as high as the previous trough was low before hitting resistance. Thus (in rough numbers), silver's trough from 31 down to 26.5 (a 4.5 point drop), would suggest a run of about 4.5 points from the previous high of 31, or resistance at about 35.5. Thoughts?

  8. that sounds reasonable David.

    There is a sort of rhythm to market moves that can be useful when attempting to project a price movement. though not always accurate, it is a good tool in the trader's toolbox.


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