I am moving this talk of Gold, Silver and Indexes Using Price Action to this new journal. It's to keep the focus and not hijack other threads. SLV is shown here. I have on purpose removed some supply lines to focus a bit more on what price actually is doing instead of getting lost in the lines. Lines are awesome for trade management and even before but one can't overly rely on the lines to make all the decisions. At the beginning of this thread it is shown that one can use the lines to survive, and I totally agree with that statement. Lines have corrected my direction more often than not, and I use them quite extensively. What I don't do is become a prisoner of these lines. Perhaps those who are newer might need the lines to keep them focused, but after a while even though the lines are on the chart, it's the price action itself that's the real deal, and the lines are like the very talented and useful backup singers. So the tight closes are the focus today. Why is price closing so tightly? Isn't it a bit unusual that something like this would happen? For some reason I keep remembering the Reminiscences of the Stock Operator by Livermore. He mentions a few times when a group or syndicate would gather and support a level and won't allow the price go too much beyond a close band. Whenever price is dropping they buy and when supply is exhausted and as a natural consequence price starts to rise the syndicate would post offers to ensure price doesn't just shoot up. This goes on until the required line is accumulated. Now, here I must be clear that we don't really know whether it's accumulation or distribution that's going on. We don't even know if anything at all is going on for that matter. But, the tight closes are somewhat intriguing, isn't it? What can we do about it? Can we profit from it? Perhaps yes. Usually, if it is an accumulation or distribution and when the required lines is accumulated or dumped, an energy is released and price is allowed to go unimpeded. We could stay alert to that happening, even though there's no certainty that will happen. All we can do is act on the behaviour we see. Price is moving in a very tight range and sooner or later it's going to exit that range. Either it will be a clean move or a fake and price could go the other way. We don't know what's going to transpire, but we do know that we'll be there ready to pounce on the opportunity when that happens, and to capitalize on it by hopping on the elephant when it starts to run. SLV Weekly: SLV Daily: Another interesting thing to note is the price drop from around 24 to 21 is about 50% of the price run from 18 to 24. Price hangs in a balance. Gringo Edit: This post lead to further inquiries as to whether we can tell it's an accumulation or a distribution. The question raised by Db was the number of shares outstanding. I haven't been able to figure out how that's going to help in determining whether there's an accumulation or a distribution but the answer is: Shares Outstanding: 354,450,000 as of Aug 3, 2013. Edit 1: Anyone interested in the SLV can go through my previous posts to see how this commentary evolved. The whole SLV commentary started in late August and for whatever reason I have been quite consistently posting my analysis throughout.
Daily Volume: 4,906,261 90 Day Avg. Daily Volume: 11,288,826 So daily volume is way lower than 90 day average daily volume. There's no intensity in trading and still price is moving within such a tight trading range. If either the demand or supply wanted to take over it is an open field to do so. But why isn't demand or supply doing anything? Gringo
You're getting ahead of me. With this ADV and the float, how long would it take to accumulate the shares?
Don't get too carried away. If someone were acc this stuff, they'd have to do some heavy buying. Heavy buying attracts attention. So the process would take far longer than 31 days. Best to put acc/dist on the back burner.
I believe the point you're making took one good night's sleep to seep into my skull. It's becoming clearer why the days were calculated. Thank you. Gringo
This acc/dist thing that makes the rounds these days got started by vendors trying to impress the unwashed with their profound insights into market workings. Unfortunately, it's mostly nonsense. Yes it can apply to stocks with reasonably small floats, but large float stocks? Please. And as far as futures go, technically they are subject to acc/dist, but only several times removed, i.e., via the stock, the index, the shortform index, etc. By the time you get around to the futures contract, the effects of acc/dist are ameliorated to the extent that they are pretty much trivial. And in any case, you can't accumulate something that has no limit. It's not unlike those who talk about "gaps" in futures. There are no gaps in futures except from Friday to Sunday afternoon, and some holidays, and Tea Partiers storming the exchanges.
SLV has started to move above the tight consolidation. For the first 15 mins or so after the open the price was up about 1% giving those who had stop buy-ins ample chance to initiate the position. For some reason after that the price just shot up about 1.5%. I don't follow news so don't know the reason. What I do know is that all our analysis from quite in advance had indicated the interesting price levels that needed to be crossed before we became bullish again. This happened in real time and actually there was enough time to make use of it. In the bigger scheme of things those who are still interested could also enter here albeit at a slightly worse price. I am not an advisory service to alert every time something interesting happen but do try as much as I can to that effect. If price drops back into the previous consolidation or starts to weaken then of course feel free to exit. It's something I prefer, that is to focus on shorter intervals, especially at the earlier phase of an entry to ensure price has the ability to maintain itself in the direction of the entry. End of day traders can just leave a stop loss and go do other things. SLV Daily: Gringo