5 day Moving avg holds - SLV and S&P 500 charts

Below are 5 minute charts.  To get a 5 day moving average I placed a 390 period moving average on the charts which is denoted in yellow (usually my 200 MA).

Today just after 11 am, there was a test of the 5 day moving average.  The fact that a change of trend appeared to occur the 17th, this successful test and bounce could indicate additional upside potential.

The upside could be justify as more QE3 chatter is circling on the internet.  This speculation may not be very trust worthy, but have a look at the latest Philly Fed survey released today.

	Prior	Consensus	Consensus Range	Actual
General Business Conditions Index - Level	18.5	23.0	15.0  to 28.0	3.9

Dramatic miss on the consensus could force government to provide further accommodation as the QE2 deadline quickly approaches (June 30th, 2011).  Many people including myself don't believe the US economy can handle the removal of this critical source of funding that the government has created.  A typical analogy is the economy is like a drug addict with cheap credit / QE as the drug.  When the party is up, an extended crash will take place.  If this scenario does take place, it could signify a dagger in the heart of the worlds current economy practices.  That is, stimulating an economy to cushion a recession just kicks the can further down the road but every kick requires an exponential amount of stimulus. 

I reluctantly call this Keynesianism as I wrote a paper on how Keynes would never have agreed to this continuing action as his principles were not meant for our current system.  He proposed a dramatically different and more sustainable system that was shot down by America using the Breton Woods convention as it was in the worlds interest but not in America's interest at the time.  Coincidentally, now the US would be benefiting from the system which was purposed.  Read more here: Is John Maynard Keynes Turning in his Grave?

The scariest part of this current economy conundrum is that there are only two outcomes.  Deep recession surpassing the 2008 crash or hyperinflation due to additional quantitative easing.  This is another article I wrote which can be read here: Pick your poison.

Next chart is SLV which is the most popular ETF that tracks Silver.

 
Exactly the same test of the 5 day MA  which has up until now held twice.  Sliver have pulled back almost 15 dollars since it almost touched $50.  This correct was much needed and could provide an entry into this metal.  Commodities have come off their highs but with additional quantitative easing the safest trades are in the commodity complex.