Tuesday, June 21, 2011

EUR/USD Divergence before Greece vote 6/21

To the left is the hourly chart of the eur/usd pair. When I look at this chart I'm quickly reminded of a previous post of what was happening shortly before Bernanke opened his mouth. Were seeing a slow grind up through resistance with ever building divergence (Seen in green). While we have broken through the top of the intermediate retracement channel in purple, we still are holding the 50% level of the larger retracement. Just to note, the indicator below the MACD on this chart is just a divergence indicator that allows me to quickly identify and scan charts, when either of the lines are below the 0 line divergence is starting to form (although in slow sideways markets it can mean nothing).

Silver Through its 50% Retrace. Shorts Get a Bit Concerned. 7:35 AM CST 6/21

(Chart 1 - Silver 60 min zoom)
(Chart 2 - Silver 60 min)
(Chart 3 - Silver Daily)

First of all let me say this. I have been short silver for a few weeks now, trading around it a bit, but maintaining a decent core of shorts. Yesterday and last night's action has me a bit concerned. I will not puke yet, but my ears are up and I will look to head to the exits if this continues for a few more days.

35.94 was very important resistance. We are now above that and holding it, and that is what has me a bit worried.
36.33 is minor resistance, but I fear that will not hold.
Should it break, we will run into a major resistance cluster, that must hold for me to stay short.

Look at the 60 min chart.
At roughly 36.50, we have a very strong MML resistance @ 36.53, as well as the bottom of the old bullish channel (light blue). We also have the 62% retrace of the most recent selloff (6/10-14) @ 36.55.

I will add up here.
Here is the problem... I would like to get rid of the entire position if silver trades back into that blue channel, or closes over 36.55. However, look at the daily chart. The down channel (magenta) is the overall governor of current price action. Today's high would be just north of 37 to penetrate it. Therefore, I will keep a loose stop on silver, and use this channel to make my puking decisions.

Hang in there, 1 margin hike or dollar rally is all it takes sometimes.