10/5/10 Markets, Dollar Index, Great Panther Mining

The markets regained yesterday’s losses and then some as the dollar plunged again having its 11th downday in the last 16 trading days. Other than the amount of points gained, the market fundamentals have not changed at all from last week. It can’t be more obvious that the dollar index has been driving the market.

If you’ll refer back to my recent posts regarding the dollar, you’ll notice that my shoulder head shoulder analysis/prediction has come true and it looks like 77.50 is our next stop as I expected. And as I just stated before, the markets are trading at the mercy of the dollar index which is driven by the FOMC and BOJ.

Dollar Index for Sept 25th, 2010
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Dollar Index for today, Oct 5th, 2010, a week and a half from previous analysis
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Dollar Index for the last month compared with the S&P 500 and The Dow Jones Industrial Average. Markets working in lockstep with the dollar.

Gold and Silver meanwhile rallied hard today after taking a breather yesterday. Silver has already broken the $21 and $22 hurdles with ease and is knocking on the door of $23. One silver miner that did particularly well was Great Panther Silver (GPRLF). The moved over 21% to the upside today and to my spite because my bids of .94 from last week were not hit on friday and I did not have a good til cancelled order so yesterday my money was off of the table. I may raise my bid to $1 and wait for a large profit take or momentum pullback but otherwise I’m pursuing other options as of right now. My best guess is a big fish decided to get in and as shown in the chart below, placed a few large volume orders for the first hour of trading. Another notable trade that took place was a suspicious buy of 78,600 shares at $1.55 in the last hour.

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About Aaron Basile
Market Technician, Equity/Commodity Trader, Austrian Economist, Contrarian Investor

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