Category Archives: Metals

Currencies and Gold, Big Picture

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Uncle Buck and his reserve status were leveraged to the hilt by “The Hero” and now his successor is trying to gently talk the Fed out of its policy stance over time. In other words, tightening is going to come one way or another and Janet Yellen is trying to go the orderly route. When this process becomes disorderly, the USD is likely to benefit from the liquidations elsewhere in the asset world.

Technically, USD is in a long basing pattern. There are those who think it is basing before a renewed decline, reading a Symmetrical Triangle (continuation) pattern into poor old Unc. I think the odds are it is bottoming over the post-2008 years when inflation – try as they might to have promoted it – simply has not taken root. Leaning bullish, watch support and resistance.

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GOLD – Next Hurdle is 1400

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If GOLD can hold above the 1300-1330 major support level shown on the 5-Year Weekly chart below, the next resistance level is around the 1400 level.

There is a convergence of the 50-week moving average, mid-Bollinger Band, -1 deviation level of the downward-sloping channel, and the 5-Year Volume Profile POC (pink line along the right side of the chart) at this major support level.

GOLD has, generally, been under accumulation since June of 2013, although it has been trading in a large range between 1180 and 1400 since then…one to watch in the coming days/weeks, particularly in light of Thursday’s major geopolitical events in the Ukraine and Israel/Gaza Strip.

Battered Miners Ready to Recover?

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Poor old gold has had a rotten week so far. Even today’s attempt to undo some of the damage is getting partly reversed as I am typing this. I would point out that miners might – I say again, might – have eased down to a level that represents a reasonable risk/reward ratio. I, for one, am avoiding precious metals altogether right now, as the beautiful bullish breakout intact as of Friday’s close has been smashed to smithereens.

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Testing The High Again

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That was a very pleasant change of pace on SPX yesterday, with almost a test of the high, and then a decline to test the daily middle band, and since then a recovery in the afternoon and overnight back to test yesterday’s high. Short term this puts SPX at a fork in the road.

On the SPX 60min chart there is a possible double bottom targeting the 1995 area if the current 1985 high can be broken with confidence. There is also a possible double top setting up with a target in the 1945 area on a break below yesterday’s low.

The historical stat I have been watching since last Friday suggests a test of the highs here and then a fast decline to test the daily lower band, currently also at 1945. The daily lower band is rising fast however and may well be over the last low at 1952 by the time it would be tested. That fits the stat too, as only one of the three previous instances made a lower low at the lower band touch. SPX 60min chart: (more…)

Shock and Au

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I gotta tell ya, I am not happy with precious metals. If I get into a trade and it goes poorly, and I realize there was something really obvious I should have heeded, I am mad at myself. But at times like this, when everything through Friday looked rock solid, I can only blame my lack of clairvoyance anticipating the nearly $1.4 billion megadump of gold at today’s opening. All the same, there are still plenty of mining stocks – like Anglogold, shown below – that I think are solid bullish plays.

0714-au

Gold Rolled

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Well, it’s disappointing to see gold getting smacked down like this, but looking at the chart, it really isn’t a game changer. We simply have slipped back into that consolidation zone that I’ve highlighted below. I’m still bullish precious metals, but it’s apparently going to require a little more patience than Friday’s close would have implied.

0712-gld