-- Posted Friday, 27 July 2007 | Digg This Article

SILVER SEPTEMBER TECHNICAL LEVELS
SUPPORT				RESISTANCE
S1	S2	S3	S4	R1	R2	R3	R4
$1,349.00	$1,263.00	$1,278.00	$1,289.00	$1,301.00	$1,313.00	$1,330.00	$1,346.00
GENERAL MARKET CONDITIONS
Another day in paradise for the bears. Volatility was very high with stop losses getting triggered. This is just an aftermath of liquidity driven markets. Call it risk aversion by investors or by whatever phrase, gold august future plunged from $666 to $652.80 in less than three minutes. In the first glance, my view was that it must have been a wrong quote. Later when I checked trade deals in reuters, the quote was correct. Dealers in India, said that nearly 1500 lots of stop loss was hit as gold august fell to $652.80. Excess liquidity created by central banks over the years results in investors investing without assessing the risk factors.  The net result is like yesterday and February 27. The credit risk fear has spread from US to Australia and Japan. Tyco Electronics Ltd. canceled a bond offering. DAE Aviation Holdings Inc. scrapped plans for a loan. Risk premiums surged after Absolute Capital Group Ltd., an Australian hedge fund, suspended withdrawals from two funds after forecasting losses on U.S. subprime mortgages. I just hope that the credit risk spread does not become another global bird flu for the financial markets. At the moment global equity markets will be able to forget the same and move ahead.   Liquidation due to credit woes is just one of the reasons for the fall. Japanese elections are there on Sunday. Exit polls are showing that there is a outside chance of the current government being toppled. Due to uncertain political environment, Japanese traders have reduced their investments. An election in just one major country has caused turbulence in global financial markets. In 2008, there is elections in US and in 2009, in more than twenty countries.  I need not comment on that. One should be a prepared for a roller coaster ride as and when elections in major democratic nations come. Japan's consumer prices declined for a fifth month in June, undermining the central bank's case that inflation will take hold and interest rates need to be raised. Core consumer prices, which exclude fresh food, fell 0.10% from a year earlier. This is good news for the carry traders as bank of Japan may not raise interest rates next month. Where are we headed? Gold and silver a bottom should be formed either today or Monday. Gold August expiry on Tuesday has added to the volatility. The spreads between August and December future has been fluctuating which add to the volatility in gold. Silver not out of the woods yet will be more affected by base metal movement than precious metal movement.
SILVER -- SEPTEMBER FUTURE
Silver has managed to hold the key medium term support of $1277 and needs to close over the same today for further gains next week. Only a consolidated break of 200 day MA of $1326.50 will result in $1342 and $1359.
NYMEX CRUDE OIL -- AUGUST FUTURE
$77.40 is the initial resistance with $79.50 and $82.29 as the key resistances. As long as $72.09 holds on closing basis, downside will be limited. A consolidated fall below $72.09 will result in $69.80
Happy Profitable Trading & Have a Great Weekend
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-- Posted Friday, 27 July 2007 | Digg This Article

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