Thursday, October 7, 2010

Silver

On September 30th I commented: "Silver--which is really over-bought--could spike to the $23-$23.50 level while Gold makes a run at 1320." Over the last few days Gold smashed through 1320 with virtually no resistance--extending its rally from July 28th into extreme over bought territory.
Silver (Dec) was as high as $23.42 Wednesday evening reaching the level mentioned on the September 30th comment. Using the continuous contract shown in the chart below,there are some interesting relationships at this price and time in the silver market.

Squaring price to time
  • Using the February 5th low of 14.68, if that price level is converted to time, using a 10: 1 scale, 146 days (360 degrees) from February 5th is July 1st--one day before the July 2nd low of 17.57. If the time-price relationship is progressed another 240 degrees, 600 degrees (360+240) the resulting date is October 7th.
  • Using the May 13th high of 19.81, 198 days from May 13th is November 27th--a date to put in your trading calendar. However if the time-price is progressed only 270 degrees we get May 13 + (198*.75) = October 8th.
  • 240 days from the Feb 5th low is October 3rd.
  • 144 days (12*12) from May 13th is October 4th
  • Although this is somewhat unconventional if the low of 14.68 (10:1) is added from the high date of May 13 we arrive at October 6th.
  • If 72 days is added to the July 28th low of 17.35, the result is October 8th
Gann Square of Nine
  • 180 degrees up from the 14.68 low is 23.34 (Sqrt of 14.68 + 1)2
  • 120 degrees up from the July 2 low of 17.57 is 23.60
  • 72 degrees up from the 19.81 high is 23.53. (Note how 72 and 144 is a common thread in the calculations.
  • 120 degrees up from the July 28th low of 17.35--which is exactly 60 degrees up from the 14.68 low-- is 23.35
There is a cluster of price and time harmonics this week for silver at 23.34-23.60--watch for signs of a reversal. A short term correction could be really interesting.

click to enlarge

4 comments:

Krishnamurthy Hegde said...

Hi,

Amazing analysis and excellent work!! I am getting glued to your analysis. I am a BIG fan of Gann Theory and could relate to what you are saying.. But which software do you use for SQ9 and Harmonic calculations ?

I am a student of Gann Theory and have been researching into it. God Bless.

Krishnamurthy

Fibocycle said...

I have designed a excel spread sheet that does all the Gann work..as you can probably tell by my charts I do not use any 'dedicated' software--I just use stockcharts.com and then draw on them my Gann and Fibonacci calculations...very crude..but it gives me a more intimate feeling with the markets since I have to make my own 'canvas' to paint on..
Thank You for your comments: 'Om mani padme hun'

Manuel E. said...

Hi,
I am new in this field and I would like to know more about it, so where do you recommend to start doing a serious research.

God bless you.

Manny

Fibocycle said...

Here are some interesting links to get started.
http://www.wdgann.com/
http://www.tradingfives.com/roadmap.htm

Bill McLaren has an excellent Gann Trading course.
http://www.ganntrading.com/gann%20made%20easy%20by%20Bill%20Mclaren.htm

Patrick Mikula has an 2 excellent texts on Gann theory and practice.
http://www.marketwarrior.com/index.html