Feb 17
Long Term=Up / Medium Term=Up / Intermediate Term=bullish
Short Term =Bullish
Support and Resistance for Friday
Initial Resistance for 1735-1742 and 2nd tier 1754-1764
Initial Support 1716-1726 and 2nd tier 1695-1710
Last night’s update resistance was listed at 1734-1742 and the high was 1730---Support was listed at 1715-1722 and 2nd tier 1706-1715 and the low was 1705.
Recap and Overview
Medium and Long Term Channel line Test
Short Term (cycles) (chart below)
What Next?
Bottom line
Long Term=Up / Medium Term=Up / Intermediate Term=bullish
Short Term =Bullish
Support and Resistance for Friday
Initial Resistance for 1735-1742 and 2nd tier 1754-1764
Initial Support 1716-1726 and 2nd tier 1695-1710
Last night’s update resistance was listed at 1734-1742 and the high was 1730---Support was listed at 1715-1722 and 2nd tier 1706-1715 and the low was 1705.
Recap and Overview
Last night’s overview discussed the most likely time for a pullback would be the Thursday and Friday USA economic data. We also discussed that either way, if we tested the support area (1705-1715) it should be the last one. We think that may have occurred today.
Thursday did pullback into the New York jobs report and we got the Thursday sell-off potential mentioned last night. Once again, it held the 1705 area. Today’s testing completes what we think was a firm message that the 1700 area has enough buyers to hold price there and that the shorts have exhausted themselves for the moment.
While we are still in a trading range and we have not closed above 1738-1742 spot gold yet, the upside action we saw favors that the low is in place for this week, and possibly for this short term downtrend.
As far as Friday is concerned, I suspect that the Philly Fed report will be favorable in the morning. Gold might not make much headway over the next few sessions until that report, but pullbacks should be contained as just dips going into the morning session in New York. Gold looks to favor a range where it should remain for the most part above 1717.
Was today the fake out on the downside we said might occur or is the bounce back up to close at the highs a fake out? We think the drop this morning was the fake out if it was one at all. With the price action, the odds favor higher. The short term cycle “window” is not due to start until the 18th , but as we mentioned last night, about 13% of the time, the cycle has a tendency of bottoming early.
Medium and Long Term Channel line Test
Gold got to within about 18 dollars from the 34 week moving average at today’s lows. The current moving average range is 1659-1687. As long as we have a weekly close above those numbers, the medium term trend remains up.
We're watching for a weekly/monthly close above 1767 and 1804 as a signal that the correction in gold is over and a new up leg is under way. On a weekly basis, the key number is now 1755-1767. A weekly close above 1755 is also an important technical point.
The weekly chart shows the situation. The pullback is on the mini orange downtrend line and the moving averages on a weekly basis show 1659-1688 as support. As long as price is above that area on a weekly closing basis, the trends remain up. Closes above that green channel line will favor a run towards 1900-2100.
Short Term (cycles) (chart below)
Although price has pulled back since February 3rd, the pullback is choppy and overlapping and that usually means that this is a pullback only. The short term cycle is not due to bottom until next week, but the fact that we held 1715 like we did the last three days opens favors that the upside now has the advantage. Think of it this way. The market is so strong that it cannot wait any longer for the cycle to bottom. That would explain why we keep holding and running back up Now that the cycle is close enough to the window, and if I’m right about it showing underlying strength, then this market should move higher from here. We won’t be certain until we leave the trade range, but the odds are now suggesting we are going to move higher. A close above 1742 adds fuel to the upside.
What Next?
The move lower into the Thursday morning New York report did play out and a strong rally and reversal day took place. There’s still another report in New York on Friday, I think it’s the Philly Fed report. I expect it will be good news. I think others think so also as the market looks strong. Friday’s are usually bullish, especially when a trend is just beginning to turn up.
Keep in mind, we’re still in the trading range, so we have to take it in context that we have not broken out yet above resistance. However, I think the pattern shows hints of underlying strength.
For Friday, it comes down to a few key numbers ---1742---1755---1767
On the chart below, any move above 1738-1742 spot favors a test of the dotted trend line at 1750-1755. When the market is in bull mode, Friday is usually an up day. The chart shows the line in the sand. THIS MORNINGS low and price reversal favors that the bulls are in charge and that the shorts caved in. They have retreated to the 1735-1742 area with their first line of defense, but they bulk of the defense now will be the lower dotted trend line 1755-1760. That blue adaptive average has held all the price highs over the past week and a half. It sits at 1735 spot as we enter Friday. We should allow a few dollars. We favor higher for Friday but that 1735-1742 area will offer first resistance. I’m looking to get in on the long side. I just wish it wasn’t on a Friday. In summary, gold is still technically in a trading range. The odds favor the upside because of the brick wall that 1705-1715 offered as support. A pullback to the mini red line would be an entry consideration. A stop loss to consider is 1688 spot or 1689.60 April Gold. If you need to play it tight, another consideration would be to sell on an 8 hour bar close below 1702 spot gold. As long as we hold that 23% retrace level, the odds favor higher.
Bottom line
It looks like a cycle low has taken place. With today’s low right at the support levels, and price ready to break above the Gann Arc, the price pattern favors a move towards 1790-1822, with the potential for more. We still have a bit of work to do, and just get above this 1735-1740 area in spot. The upside has the advantage.
Gold is trading up at 1730.25 up by 2.15. after trading down in the early session, and turning to gains on the last hour of trading. Gold had spent most of the day lower, pressured by positive U.S. macroeconomic data and dollar strength. As the dollar moved lower, however, the metal gained traction.
The number of U.S. workers making new applications for unemployment benefits fell last week to the lowest level in nearly four years.
The number of U.S. workers making new applications for unemployment benefits fell last week to the lowest level in nearly four years.
The government reporting initial claims for unemployment benefits fell by 13,000 to a seasonally adjusted 348,000 last week, the lowest since March 2008.
Other reports had housing starts up 1.5% last month, while wholesale prices climbing 0.1% in January.
Investors pulled out of stocks as media reports said some euro-zone nations wanted to delay Greece’s next bailout money until after April elections, while making arrangements to keep it from going into default. Adding pressure to the situation, tensions appeared to be building between Germany and Greece.
The gold price is sensitive to a number of scheduled U.S. and Euro area macroeconomic announcements—including retail sales, non-farm payrolls, and inflation. Gold’s high sensitivity to real interest rates and its unique role as a safe-haven and store of value typically leads to a counter-cyclical reaction to surprise news, in contrast to their commodities.
13:30 USD CPI (MoM) 0.3% 0.0%
The Core Consumer Price Index (CPI) measures the changes in the price of goods and services, excluding food and energy. The CPI measures price change from the perspective of the consumer. It is a key way to measure changes in purchasing trends and inflation.
The Consumer Price Index (CPI) measures the change in the price of goods and services from the perspective of the consumer. It is a key way to measure changes in purchasing trends and inflation.
Feb 20-24 n/a UK 0.375% 2062 I/L Gilt syndication
Feb 20 10:10 Norway Nok 3bn 4.5% May 2019 DSL
Feb 20 10:10 Slovakia Eur 0.15bn Apr 2014 & Eur 0.05bn Nov 2016 bonds
Feb 21 09:30 Spain 3 & 6M T-bill auction
Feb 21 15:30 UK Details gilt auction on Mar 01
Feb 21 18:00 US Auctions 2Y Notes
Feb 22 10:10 Sweden Nominal bond auction
Feb 22 10:30 Germany Eur 5.0bn Mar 2014 Schatz
Feb 22 16:30 Italy Details CTZ/BTPei on Feb 24 & BOT on Feb 27
Feb 22 18:00 US Auctions 5Y Notes
Feb 23 10:10 Sweden Sek 0.75bn I/L bond auction
Feb 23 16:30 Italy Details BTP/CCTeu on Feb 28
Feb 23 18:00 US Auctions 7Y Notes
Feb 24 10:10 Italy Auctions CTZ/BTP
Feb 16
Trend
Long Term=Up / Medium Term=Up / Intermediate Term=Neutral/bullish (right on edge)
Short Term =Neutral
Support and Resistance for Thursday
Initial Resistance for 1734-1742 and 2nd tier 1755-1765
Initial Support 1715-1722 and 2nd tier 1706-1715 and 3rd tier 1688-1695
Last night’s update resistance was listed at 1729-1738 and the high was 1738---Support was listed at 1706-1715 and the low was 1719.
Recap and Overview
Gold and silver pushed up as laid out on last night’s outlook into Mid Week Wednesday. We reached the upper levels on both Gold and Resistance. As far as the outlook, we still remain in a trading range, and if we close above 1738-1742 spot gold, the upside will start to tilt to a potential low in place, and if we break the Tuesday low, the odds will tilt to the downside.
Coming up next week, we have the short term cycles we watch that are due to produce a monthly low. The ideal time is Feb 21st plus or minus 72 hours.
So far the market has followed the script week to date. Here’s where it gets tricky I suspect. The most likely time for a pullback is into the Thursday and Friday USA economic data. The downside has already developed early here on Thursday, and that set up is a little different than what usually develops. I’m not sure what it means, but tonight and tomorrow morning in New York will probably be the final time we test this lower area without either a bottom, or the move to 1695 that all are watching for.
If we don’t get a sell off on Thursday, the risk of moving above 1742 spot will grow considerably. We need to get below 1710-1715. Otherwise, the risk of running higher will grow significantly if we have not begun a pullback by mid day on Thursday.
The problem the market has right now is everyone is waiting to play a breakout. So the market is figuring out how it will make its move with the least aboard. Part of the price probe into the 1740’s in April on Wednesday was to test the resolve of the bears, and early Thursday is to test the resolve of the bulls. One side is about to take over. Since everyone is watching for it, the changes are much higher for a head fake and then the real decision. Keep that in mind when we first make a move one way or another.
MarketWatch comment
Gold futures climbed Wednesday, looking to end a three-session losing streak, with investors weighing the metal’s safe-haven appeal against rising tensions between Iran and Israel as well as ongoing uncertainty over Greece’s debt problems. “Gold is being supported by the never-ending Greek debt saga and increased tensions between Israel and Iran, which has seen U.S. crude rise above $101 per barrel,” analysts at GoldCore said in a note to clients. GoldTrends opinion is higher gold if Greek gets a bailout, lower (knee jerk reaction) if there is sign of default.
The FOMC minutes released today had nothing new I saw that changed anything and gold remains in the same condition after, as it did before. Indecisive.
Wednesday’s action was in line with last night’s update, as we were looking for bounce up towards 1735-1740 April gold for a potential mid week Wednesday high. The 1738 high was at the upper end and did make a new high. Now it’s test the 1720 area again on Thursday morning.
Medium and Long Term Channel line Test
The key numbers we're watching is 1767 and 1804 as the most important price points on a monthly basis. On a weekly basis, the key number is now 1755-1767. This is now a price point that everyone is watching. It’s the same on the downside. Everyone is talking 1680-1695 area.
As long as price is between the price points, the potential for gold to continue in this trading range is still valid. The longer it takes to break, the greater the move out of the zone should be.
The weekly chart shows the situation. While the 2011 downtrend line has been exceeded, the midway green channel line has provided the resistance. It’s that channel line that needs to be overcome for a higher price potential. The pullback is on the mini orange downtrend line and the moving averages on a weekly basis show 1659-1688 as support. We need a close above that Green channel line to get the medium term back in gear.
Short Term (cycles)
Although price has pulled back since February 3rd, the pullback is choppy and overlapping and that usually means that this is a pullback only. The short term cycle is not due to bottom until next week, the fact that we held 1715 like we did Tuesday opens up the potential for price to turn up. The pattern itself still looks like a continuation pattern higher, and with gold at the moving averages, we’re just waiting for the break.
The market itself is toying with everyone, trying to take as many off the train before it starts its next move. With that type of action, it favors it’s going to be a good sized move once it starts.
Any close above 1755-1767 negates favors the cycle has turned early. Even a close above 1742 could turn the upside back in play. Holding 1715 like the market did on Tuesday mean one of two things---we’re about to rally hard towards 1800-1900 ---- or the next test of 1700 is the one that breaks it and a hard fast drop will follow.
What Next?
With Wednesday giving us a higher high day favors any close above 1738 in spot / 1742.50 in April Gold to favor the upside into Friday. Thursday’s are usually sideways to lower into the morning USA reports.
On the chart below, any move above 1742 spot favors a test of the dotted trend line at 1750-1755. Thursday is usually a pullback day, but with this sideways range, it can go either way. The USA economic reports on Thursday will probably set the pace.
Bottom Line
The short term cycle pullback is still in play, but it is in its final stretch. It’s not due for a bottom until next week, but with the current action, if we don’t move under 1705-1715 on Thursday, and price breaks back above 1742 spot, the upside will gain the edge.
The pattern below is too close to call. The range is 1715-1742 spot now. Not only that, but a move above the Wednesday high will run into problems at 1750-1755 with the lower dotted 2012 channel line. So the upside will still have another resistance point up above.
On the downside, a move below 1712 will favor 1695. The lower yellow zone with that mini channel puts weekly support near 1680 on Thursday. All the bulls have labeled the pattern a flag. The bear’s favor it’s a downtrend channel with one more leg. Thursday favors 1716-1735 for a range. A break either way can develop and at any time, and The morning reports in New York could be the decision point. There is nothing else we can do with this pattern but to wait for it to break in the direction it’s going to take. Watch 1735-1740 on the upside and 1710-1715 on the downside.
Economic Events: (GMT)
09:00 EUR ECB Monthly Report
The European Central Bank’s (ECB) monthly report contains the statistical data that policymakers evaluate when setting interest rates. The report also provides detailed analysis of current and future economic conditions from the bank’s perspective.
13:30 USD Building Permits 0.68M 0.67M
Building Permits measures the change in the number of new building permits issued by the government. Building permits are a key indicator of demand in the housing market.
13:30 USD Core PPI (MoM) 0.1% 0.3%
13:30 USD PPI (MoM) 0.3% -0.1%
The Core Producer Price Index (PPI) measures the change in the selling price of goods and services sold by producers, excluding food and energy. The PPI measures price change from the perspective of the seller. When producers pay more for goods and services, they are more likely to pass the higher costs to the consumer, so PPI is thought to be a leading indicator of consumer inflation.
13:30 USD Housing Starts 0.68M 0.66M
Housing starts measures the change in the annualized number of new residential buildings that began construction during the reported month. It is a leading indicator of strength in the housing sector
13:30 USD Initial Jobless Claims 364K 358K
13:30 USD Continuing Jobless Claims 3550K 3515K
Initial and Continuing Jobless claims measures the number of individuals who filed for unemployment insurance for the first time or renewed during the past week. This is the earliest U.S. economic data, but the market impact varies from week to week.
A higher than expected reading should be taken as negative/bearish for the USD, while a lower than expected reading should be taken as positive/bullish for the USD.
14:00 USD Fed Chairman Bernanke Speaks
Federal Reserve Chairman Ben Bernanke (February 2006 – January 2014) is to speaky on the economic outlook and recent monetary policy actions, in Washington DC
15:00 USD Philadelphia Fed Manufacturing Index 8.4 7.3
The Philadelphia Federal Reserve Manufacturing Index rates the relative level of general business conditions in Philadelphia. A level above zero on the index indicates improving conditions; below indicates worsening conditions. The data is compiled from a survey of about 250 manufacturers in the Philadelphia Federal Reserve district.
Just a heads up since gold is volatile and will react to most economic indicators we will begin to post the daily calendar with events that could effect the price of gold. The gold price is sensitive to a number of scheduled U.S. and Euro area macroeconomic announcements—including retail sales, non-farm payrolls, and inflation. Gold’s high sensitivity to real interest rates and its unique role as a safe-haven and store of value typically leads to a counter-cyclical reaction to surprise news, in contrast to their commodities. It also shows a particularly high sensitivity to negative surprises that might lead financial investors to become more risk averse.
These results have a number of implications. To reduce the uncertainty of the return on gold transactions, traders may wish to time their orders flow so as to avoid the release of information that has been shown to affect prices. For longer-term market participants, these results provide confirmation of the pro-cyclical bias of many commodities and gold’s role as a safe-haven during periods of economic uncertainty.
Feb 15
Wednesday consideration; (For experienced traders)
Scenario consideration #1 --
Shorting the 1735-1740 Apl Futures --- stop 1749 -- take 1/2 profits at 1723 --- bring stop to break even stop on remainder of position ---if we trade under 1695 ---take profits ............
Scenario consideration #2--
Go long 1716 APL Futures ----stop 1709 intra day-------target 1729-1731 for 1/2 profits -- then change stop to breakeven on remainder.
Scenario consideration #3 --
OVERALL STRATEGY FOR WEDNESDAY CONSIDERATIONS..Buying the 1706-1716 spot area --- and shorting the 1729-1738 area.
DON'T Trade without stops.
PRICE DUE TO MOVE OUT OF RANGE SOON.
BE CAREFUL --- under 1710 APL gold---favors 1685-1695. ABOVE 1743 APL gold favors 1755-1765----above 1765 favors 1800.
The chart below shows the situation. It looks like 1709-1715 is the last support before 1680-1695 for Wednesday. IF WE HIT 1695 and don’t close below it, we should see a reversal back up.
The short term cycle pullback is still in play, but it is in its final stretch. The earliest it is due to arrive is the 18th. This is true in about 75% of the time. The others are times when they arrive early, and late. So lets be careful here.
Watch this 1705-1715 area---and 1688-1692 on Wednesday. They are high probability price support areas. Wednesday favors a bounce is in play and we favor a test of 1729-1742 spot. The danger lies in the potential for gold to trade higher. Holding the 1715 area like we did, is a high consideration to cover the short position as the risk is very high now. Even it it did turn down, the point is that the risk is high now that we'll get stopped out. Keep that in mind. Wednesday favors a bounce and then some consolidation into the end of week reports on Wall St. Look for a test of resistance.
The short term cycle pullback is still in play, but it is in its final stretch. The earliest it is due to arrive is the 18th. This is true in about 75% of the time. The others are times when they arrive early, and late. So lets be careful here.
Watch this 1705-1715 area---and 1688-1692 on Wednesday. They are high probability price support areas. Wednesday favors a bounce is in play and we favor a test of 1729-1742 spot. The danger lies in the potential for gold to trade higher. Holding the 1715 area like we did, is a high consideration to cover the short position as the risk is very high now. Even it it did turn down, the point is that the risk is high now that we'll get stopped out. Keep that in mind. Wednesday favors a bounce and then some consolidation into the end of week reports on Wall St. Look for a test of resistance.
Gold is trading at 1717.70 scoring a third losing session in a row, as pressure from a rally in the U.S. dollar outweighed support from weaker-than-expected U.S. retail sales and uncertainty over whether Greece will get a second bailout. Gold fell $7.20, or 0.4%, to settle at $1,717.70 an ounce It traded between a high of $1,729.90 and a low of $1,713.80. Futures prices have now tallied a three-session loss of more than $23 an ounce. Watch for a move up in early trading as it has just been annouced that the EU meeting to discuss the Greek agreement has been cancalled as the EU found that Greece had not satisfied all the financial demands and that their current offer did not cover about ½ a billion euros.
It looks like a default is imminent. This uncertainty will surely push gold
to higher numbers Wednesday.
Economic Events: (GMT)06:30 EUR French GDP (QoQ) -0.2% 0.3%
07:00 EUR German GDP (QoQ) -0.3% 0.5%
Gross Domestic Product (GDP) is the broadest measure of economic activity and is a key indicator of economic health. The quarterly percent changes in GDP show the growth rate of the economy as a whole.
A higher than expected reading should be taken as positive/bullish for the EUR, while a lower than expected reading should be taken as negative/bearish for the EUR.
09:30 GBP Average Earnings Index +Bonus 1.8% 1.9%
09:30 GBP Claimant Count Change 3.2K 1.2K
The Average Earnings Index measures change in the price businesses and the government pay for labor, including bonuses. The Average Earnings figure gives us a good indication of personal income growth during the given month.
Claimant Count Change measures the change in the number of unemployed people in the U.K. during the reported month. A rising trend indicates weakness in the labor market, which has a trickle-down effect on consumer spending and economic growth.
10:00 EUR GDP (QoQ) -0.4% 0.1%
Gross Domestic Product (GDP) is the broadest measure of economic activity and is a key indicator of economic health. The quarterly percent changes in GDP show the growth rate of the economy as a whole.
A higher than expected reading should be taken as positive/bullish for the EUR, while a lower than expected reading should be taken as negative/bearish for the EUR.
10:30 GBP BoE Inflation Report
The Bank of England (BOE) Inflation Report sets out the detailed economic analysis and inflation projections upon which the bank’s Monetary Policy Committee bases its interest rate decisions and presents an assessment of the prospects for U.K. inflation over the following two years. The report is released quarterly.
10:30 GBP BoE Gov King Speaks
Bank of England (BOE) Governor Mervyn King (July 2003 – June 2013) is to speak. As head of the BOE’s Monetary Policy Committee (MPC) which controls short term interest rates, King has more influence over sterling’s value than any other person. Traders scrutinize his public engagements for clues regarding future monetary policy.
His comments may spark a short-term positive or negative trend.
13:30 USD NY Empire State Manufacturing Index 14.2 13.5
The Empire State Manufacturing Index rates the relative level of general business conditions New York state. A level above 0.0 indicates improving conditions, below indicates worsening conditions. The reading is compiled from a survey of about 200 manufacturers in New York state.
14:00 USD TIC Net Long-Term Transactions 62.3B 59.8B
Treasury International Capital (TIC) Net Long-Term Transactions measures the difference in value between foreign long-term securities purchased by U.S. citizens and U.S. long-term securities purchased by foreign investors. Demand for domestic securities and currency demand are directly linked because foreigners must buy the domestic currency to purchase the nation’s securities.
14:15 USD Industrial Production (MoM) 0.7% 0.4%
Industrial Production measures the change in the total inflation-adjusted value of output produced by manufacturers, mines, and utilities.
17:15 USD FOMC Member Fisher Speaks
Federal Reserve Bank of Dallas President and Federal Open Market Committee (FOMC) voting member (2008 and 2011) Richard Fisher is to speak. FOMC members are responsible for setting the benchmark interest rate and their speeches are closely watched for indications on the future possible direction of monetary policy.
His comments may determine a short-term positive or negative trend.
19:00 USD FOMC Meeting Minutes
The Federal Open Market Committee (FOMC) Meeting Minutes are a detailed record of the committee’s policy-setting meeting held about two weeks earlier. The minutes offer detailed insights regarding the FOMC’s stance on monetary policy, so currency traders carefully examine them for clues regarding the outcome of future interest rate decisions.
Feb 14
The chart below shows the situation. It looks like 1709-1715 is the last support before 1680-1695 for Tuesday. IF WE HIT 1695 and don’t close below it, it might become temporary support for a bounce into mid week Wednesday.
The short term cycle pullback is still in play. Watch this 1709-1715 area---and 1692-1699 on Tuesday. They are high probability price support areas. This area we are at now looks like a defining price point where we break down from, or forge another bounce into mid week from. We favor lower on a break below the yellow zone. Tuesday favors a down day to begin, but a quick bounce to mid week might come in play later today.
The short term cycle pullback is still in play. Watch this 1709-1715 area---and 1692-1699 on Tuesday. They are high probability price support areas. This area we are at now looks like a defining price point where we break down from, or forge another bounce into mid week from. We favor lower on a break below the yellow zone. Tuesday favors a down day to begin, but a quick bounce to mid week might come in play later today.
Scenario for today
Elliott: flat correction down 1710.27
While below 1723.90 it might drop to 1714.10 or 1706.64.
Supports / Resistances
Res 2 1,741.1700
Ex-High 1,733.3600
Res 1 1,731.7100
Pivot 1,723.9000
Sup 1 1,714.4500
Ex-Low 1,716.1000
Sup 2 1,706.6400
Economic Events: (GMT)
10:30 EUR Italian 10-Year BTP Auction
The figures displayed in the calendar represent the average yield on the Buoni del Tesoro Poliannuali or BTP auctioned.
Italian BTP bonds have maturities of five, ten, fifteen and thirty years. Governments issue treasuries to borrow money to cover the gap between the amount they receive in taxes and the amount they spend to refinance existing debt and/or to raise capital.
The yield on the BTP represents the return an investor will receive by holding the treasury for its entire duration. All bidders receive the same rate at the highest accepted bid.
Yield fluctuations should be monitored closely as an indicator of the government debt situation. Investors compare the average rate at auction to the rate at previous auctions of the same security.
13:30 USD Core Retail Sales (MoM) 0.6% -0.2%
Core Retail Sales measures the change in the total value of sales at the retail level in the U.S., excluding automobiles. It is an important indicator of consumer spending and is also considered as a pace indicator for the U.S. economy.
13:30 USD Import Price Index (MoM) 0.3% -0.1%
The Import Price Index measures the change in the price of imported goods and services purchased domestically.
13:30 USD Retail Sales (MoM) 0.8% 0.1%
Retail Sales measure the change in the total value of inflation-adjusted sales at the retail level. It is the foremost indicator of consumer spending, which accounts for the majority of overall economic activity.
15:00 USD Treasury Secretary Geithner Speaks
U.S. Treasury Secretary Timothy Geithner (January 2009 – January 2013) is to speak. He speaks frequently on a broad range of subjects and his speeches are often used to signal policy shifts to the public and to foreign governments. ( This statement could have effect on the USD)
Feb 13
GOLD traded in a range of $1,705 to $1,735 on Friday. It was sold down as asset prices fell across the board as the Greek financing package stalled over continuing austerity package debates in the Greek parliament. There is increasing pressure on Greece from the Germans who pointed out that the nation has so far miserably failed to meet targets in order to comply with budget rules set by the so called troika. Gold fell to our support level at $1.705 which held perfectly and saw it rally to close above $1,720..We continue to maintain our neutral short term bias in the metal and expect prices to continue to trade between $1,710 to $1,750 as long as the Greek financing package remains unresolved. Today, look for more of the same. Sell towards $1,740 and buy on fall towards $1,710 with tight stop losses just outside of recent ranges. The vote in the Greek parliament is unlikely to have a major impact on prices unless there is a shock defeat.
Let us look at monday’s outlook!
Gold in the short term might be headed down more, it seems to be making a pattern of lower highs and lower lows. How far can gold fall? All the way to 1680 isn’t to be very surprising, but if it does, great buying opportunity for traders and physical gold hoarders alike. This world is slowly buy surely getting more inflationary.
Medium Term - Neutral (takes a monthly close above 1804 to turn trend bullish)Intermediate Term– Up (but favoring a seasonal peak in this time frame and a pullback into mid to end or March)
Short Term – trading range with potential to 1660-1680 / (need close above 1767 for higher price to be favored)
Resistance for this week 1736-1747 /2nd tier 1753-1763 /3rd tier 1799-1812
Support for this week 1695-1708 /2nd tier 1671-1681 /3rd tier 1648-1657
Last week's listed resistance for the week was 1755-1776 and the high was 1753.
Support was listed at 1695-1712 and the low was 1704 (all prices Spot Gold).
Apr Gold Futures price range was 1755.50 high-1706.40 low – Close 1725
Recap/Outlook - the “Numbers”
Last week’s 1755-1767 price points for profit taking considerations for traders reached the very edge of the range with the nearest month spot price registering a high of 1755.50 http://stockcharts.com/h-sc/ui . On the downside, the initial support range for the week (1695-1712) was also hit with a price low of 1706.40.
The Monthly low end range of 1649-1675 listed last week is still an important number and is still in play. The monthly high end range of 1767-1804 will only be in play this week if price exceeds 1757.
From a chart perspective, the most important upside numbers remain 1767 and 1804. These are the weekly closing price required in order to favor higher prices and favor an end to the current trading range and overall correction that gold has been in for 5 months. Until we see a weekly close above 1767-1804, the potential for gold to continue its same action since August (a corrective pattern) remains in place.
The 1804 post high remains the critical number to exceed. The reason it is so important is because no gold market rally has ever gone above a post rally high and not gone on to make new highs. According to Gann Global and their database research, of all the gold bull markets, none has ever made a NEW LOW in a correction after exceeding a post high. Thus if close above 1804 on a monthly basis, the 1522 low should not be taken out.
THERE ARE NO NUMBERS MORE IMPORTANT right now then 1767 and 1804. These are the key numbers to focus on for the upside that is the main resistance to price. This month’s high so far at 1764 and subsequent pullback last week to 1700 reinforces the importance of that number and that the market recognizes these price points.
Last Week
Short term cycles were favored to peak last week and prices swung up and down in its current trading range of 1700-1760. The highs from the prior week did hold and we did make a new low, lower than the previous week. So technically, the cycle pullback is in play. We say technically because it was an up and down week as we got three attempts to challenge the upside in the 1750's. The 1755 resistance point held and resisted each attempt. So far, this pullback cycle has been weak and gold still seems to have some underlying strength to it. If that continues this coming week, it would favor a strong end to the month.
For the coming week – Short term pullback in play, but pullback weak so far.
Short term cycles are in play and technically speaking, still valid and suggest that the current trend will continue to try and pressure gold until the next cycle turn due Feb 21st (plus or minus 72 hours). The best description we have for gold is that it is in a trading range with 1695-1705 on the downside and 1755-1765 on the upside.
On the Upside---1738-1748 is an area where traders can consider profit taking on longs or for short position candidates with stops at 1760 (all prices basis spot---add 2 dollars to April Futures). The other area to consider is the 1753-1763 range for profit taking and short position consideration with stops at 1772. Those are the key upside ranges on a weekly basis. Odds favor one of those two areas as this week’s high point and that the first area (1738-1748) the favored.
On the Downside---1673-1685 is the intermediate and medium term support numbers where the 34 and 13 week moving average reside. Any move to this area should have market shorts covering positions, and market swing traders looking going long. There is one other area, the 1648-1658 zone where there is very solid support. A move there on this pullback would be considered a good trade entry, especially if it takes place between the 18th-21st of the month.
This coming week’s most important factors will be decision coming out on the Greek debt negotiations. So far, gold’s reactions have been to the upside whenever there seems to be bailout news and to the downside whenever the threat of default arises. But there are so many events that can trigger a reaction that its best to trust the price levels on the chart. With Iran heating up, Syria escalating, and the liquidity crisis in Europe, the mass increase in money printing is at levels that seemed impossible a few short years ago. For those wondering why we haven't gone into a hyper inflationary scenario yet, it is because the printing this far has not increased the velocity or turnover of money that accompanies a hyper inflationary event. All the printing is covering bad debt and the remainder is being poured into stocks, bonds and commodities because those seeking new loans do not qualify under these tighter conditions.
Going to the gold charts
Gold Weekly Update
Long Term - Up
Medium Term - Neutral (takes a monthly close above 1804 to turn trend bullish)Intermediate Term– Up (but favoring a seasonal peak in this time frame and a pullback into mid to end or March)
Intermediate term - Up but at resistance and cycles favoring a pullback to begin in mid February and last until the latter portion of March.
Short Term – trading range with potential to 1660-1680 / (need close above 1767 for higher price to be favored)
Resistance for this week 1736-1747 /2nd tier 1753-1763 /3rd tier 1799-1812
Support for this week 1695-1708 /2nd tier 1671-1681 /3rd tier 1648-1657
Last week's listed resistance for the week was 1755-1776 and the high was 1753.
Support was listed at 1695-1712 and the low was 1704 (all prices Spot Gold).
Apr Gold Futures price range was 1755.50 high-1706.40 low – Close 1725
Recap/Outlook - the “Numbers”
Last week’s 1755-1767 price points for profit taking considerations for traders reached the very edge of the range with the nearest month spot price registering a high of 1755.50 http://stockcharts.com/h-sc/ui . On the downside, the initial support range for the week (1695-1712) was also hit with a price low of 1706.40.
The Monthly low end range of 1649-1675 listed last week is still an important number and is still in play. The monthly high end range of 1767-1804 will only be in play this week if price exceeds 1757.
From a chart perspective, the most important upside numbers remain 1767 and 1804. These are the weekly closing price required in order to favor higher prices and favor an end to the current trading range and overall correction that gold has been in for 5 months. Until we see a weekly close above 1767-1804, the potential for gold to continue its same action since August (a corrective pattern) remains in place.
The 1804 post high remains the critical number to exceed. The reason it is so important is because no gold market rally has ever gone above a post rally high and not gone on to make new highs. According to Gann Global and their database research, of all the gold bull markets, none has ever made a NEW LOW in a correction after exceeding a post high. Thus if close above 1804 on a monthly basis, the 1522 low should not be taken out.
THERE ARE NO NUMBERS MORE IMPORTANT right now then 1767 and 1804. These are the key numbers to focus on for the upside that is the main resistance to price. This month’s high so far at 1764 and subsequent pullback last week to 1700 reinforces the importance of that number and that the market recognizes these price points.
Last Week
Short term cycles were favored to peak last week and prices swung up and down in its current trading range of 1700-1760. The highs from the prior week did hold and we did make a new low, lower than the previous week. So technically, the cycle pullback is in play. We say technically because it was an up and down week as we got three attempts to challenge the upside in the 1750's. The 1755 resistance point held and resisted each attempt. So far, this pullback cycle has been weak and gold still seems to have some underlying strength to it. If that continues this coming week, it would favor a strong end to the month.
For the coming week – Short term pullback in play, but pullback weak so far.
Short term cycles are in play and technically speaking, still valid and suggest that the current trend will continue to try and pressure gold until the next cycle turn due Feb 21st (plus or minus 72 hours). The best description we have for gold is that it is in a trading range with 1695-1705 on the downside and 1755-1765 on the upside.
On the Upside---1738-1748 is an area where traders can consider profit taking on longs or for short position candidates with stops at 1760 (all prices basis spot---add 2 dollars to April Futures). The other area to consider is the 1753-1763 range for profit taking and short position consideration with stops at 1772. Those are the key upside ranges on a weekly basis. Odds favor one of those two areas as this week’s high point and that the first area (1738-1748) the favored.
On the Downside---1673-1685 is the intermediate and medium term support numbers where the 34 and 13 week moving average reside. Any move to this area should have market shorts covering positions, and market swing traders looking going long. There is one other area, the 1648-1658 zone where there is very solid support. A move there on this pullback would be considered a good trade entry, especially if it takes place between the 18th-21st of the month.
This coming week’s most important factors will be decision coming out on the Greek debt negotiations. So far, gold’s reactions have been to the upside whenever there seems to be bailout news and to the downside whenever the threat of default arises. But there are so many events that can trigger a reaction that its best to trust the price levels on the chart. With Iran heating up, Syria escalating, and the liquidity crisis in Europe, the mass increase in money printing is at levels that seemed impossible a few short years ago. For those wondering why we haven't gone into a hyper inflationary scenario yet, it is because the printing this far has not increased the velocity or turnover of money that accompanies a hyper inflationary event. All the printing is covering bad debt and the remainder is being poured into stocks, bonds and commodities because those seeking new loans do not qualify under these tighter conditions.
Going to the gold charts
The center of attraction chart we’ve been observing has so far provided a peak during the window of time and price most favored. Increasing the odds of this price high was price reached just under the middle green line in our momentum channel. The exact low in December was at the lower green channel line. The rally back up to the middle green during a February time point has the potential of producing a peak in gold that could last into the March/April time frame. Other cycles also point to this potential.
This line has provided support to every major low since the crash of 2008. The coming week is decision time for gold. Odds favor 1755-1765 as the high point. A move above there and 1796-1812 comes in play.
This line has provided support to every major low since the crash of 2008. The coming week is decision time for gold. Odds favor 1755-1765 as the high point. A move above there and 1796-1812 comes in play.
Cycles
the short term cycle picture still has the prior Thursday’s high point within a few dollars of 1767 resistance. As long as we remain below 1755-1767, the short term cycle pullback is still in play.
Last Friday’s drop to 1704 in spot gold was a new weekly and daily price low and for the moment, keeps the cycle pullback in play. But it’s been a choppy cycle that has many inconsistencies that render it not as supportive as we’d like to see fur surety sake.
Even Friday’s reversal hammer on the price bar makes what looked like a clean break down suspect that a low could have been put in place. It's another potential signal that gold, while it may be under the grips of this short term cycle pullback, seems to be exhibiting underlying strength that is resisting a lower price. ANY close above 1755-1765 will reverse to trend outlook to higher.
the short term cycle picture still has the prior Thursday’s high point within a few dollars of 1767 resistance. As long as we remain below 1755-1767, the short term cycle pullback is still in play.
Last Friday’s drop to 1704 in spot gold was a new weekly and daily price low and for the moment, keeps the cycle pullback in play. But it’s been a choppy cycle that has many inconsistencies that render it not as supportive as we’d like to see fur surety sake.
Even Friday’s reversal hammer on the price bar makes what looked like a clean break down suspect that a low could have been put in place. It's another potential signal that gold, while it may be under the grips of this short term cycle pullback, seems to be exhibiting underlying strength that is resisting a lower price. ANY close above 1755-1765 will reverse to trend outlook to higher.
The fact that we came back above the 13 week moving average to close out the week really leaves gold in a position where the outcome on the short term is one that is dubious at best in making a call on its outcome. Each time gold arrives at a chart point that suggests lower or higher, it gets turned around and last Friday is a perfect example as the run up back into the close leaves the upside potential open.
If the cycle plays out into February 21st as scheduled, then the 1650-1675 area offers the most likely area of price support for the coming low. A drop below 1695 would continue to favor that outcome. However, if gold is really strong, and rallies above 1767, we'll favor a strong end of month move especially after 18th or 21st of the month.
We are going to reprint last week’s point to watch as the indicator of higher or lower price expectations as it is still valid and important for us to keep in mind.
What is the signal for the bull market to confirm the up trend resumption?
Here's the bottom line:
PRICE LEVEL ONE
The Dec 1767 high is the first area that must be overcome for anything to play out on the upside. That's the first area to watch. Swing traders can use it as a PIVOT also---above higher, below, lower. Watch 1755-1765. As long as we are below there, the short term pullback is still in play. A close above there favors a move to 1804.
If the cycle plays out into February 21st as scheduled, then the 1650-1675 area offers the most likely area of price support for the coming low. A drop below 1695 would continue to favor that outcome. However, if gold is really strong, and rallies above 1767, we'll favor a strong end of month move especially after 18th or 21st of the month.
We are going to reprint last week’s point to watch as the indicator of higher or lower price expectations as it is still valid and important for us to keep in mind.
What is the signal for the bull market to confirm the up trend resumption?
Here's the bottom line:
PRICE LEVEL ONE
The Dec 1767 high is the first area that must be overcome for anything to play out on the upside. That's the first area to watch. Swing traders can use it as a PIVOT also---above higher, below, lower. Watch 1755-1765. As long as we are below there, the short term pullback is still in play. A close above there favors a move to 1804.
PRICE LEVEL TWO
The Nov 1804 area is last price point that the market needs to overcome to highly favor the correction is over. Data released in a webinar by Gann Global indicates that Gold has never exceeded a post rally high and then gone on to make a new low for the cycle. Not once since 1971 has that occurred. Therefore we have to highly favor the correction being over if we get a monthly close above that price point.
Now we have our price points. It’s up to gold. We cannot control what it does. We can try and trade the fine points, and watch them closely for guidance.
SUMMARY
If price breaks above 1755-1765, favor 1799-1812. Otherwise, short term cycles should continue to try and pressure gold in the coming week.
A Seasonal peak usually comes in play in Mid-February and lasts into the end of March. Not every year, but most. I’ve seen it stretch out as late as the first few days of March before it begins, but it is extremely rare we don’t get a pullback. With that said, 2011 was an exception.
The downside area’s to watch this week is 1695-1708 and the 1666-1679 area. Those are the two most likely low points in price range.
On the upside 1736-1746 and 1755-1765 area are the two most likely points for a price high this week.
Short term outlook---is sideways to lower for another week. So far the pullback expected to begin last week has pulled price lower. A break below 1695 keeps the downside in play. A close above 1755 neutralizes it.
Intermediate term---is still up BUT---A mid-winter season high is due in February that usually produces an end of March low is due.
Bottom Line - we're in a short term pullback, but the pullback looks to be weak.
The rally from the December low is due for a seasonal peak in Mid February and usually lasts until the end of March or very early April. Thus the potential for a seasonal pullback is upon us and is usually the track gold follows.
The chart below shows cycle activity in gold on three time frames. The February monthly update will cover it in detail and should be ready in a few days. It would be normal price activity if gold is beginning another pullback. I’ve seen this current seasonal up trend last as late as early March, but in normal years, it usually peaks around mid February and pulls back into late March. With that said, 2011 was an exception and no significant pullback took place.
Since the peak in August, gold has been tracking in a 5-6 week cycle between highs and lows. A turn from here lasting 6 weeks would put us right in line with the North American Spring Seasonal low during the final weeks of March. Let’s be on guard for an intermediate peak in this time frame. We'll use 1767 and 1804 as our pivot. As long as we're below those price points, the seasonal pullback holds a strong potential to come into play.
Bottom Line - we're in a short term pullback, but the pullback looks to be weak.
The rally from the December low is due for a seasonal peak in Mid February and usually lasts until the end of March or very early April. Thus the potential for a seasonal pullback is upon us and is usually the track gold follows.
The chart below shows cycle activity in gold on three time frames. The February monthly update will cover it in detail and should be ready in a few days. It would be normal price activity if gold is beginning another pullback. I’ve seen this current seasonal up trend last as late as early March, but in normal years, it usually peaks around mid February and pulls back into late March. With that said, 2011 was an exception and no significant pullback took place.
Since the peak in August, gold has been tracking in a 5-6 week cycle between highs and lows. A turn from here lasting 6 weeks would put us right in line with the North American Spring Seasonal low during the final weeks of March. Let’s be on guard for an intermediate peak in this time frame. We'll use 1767 and 1804 as our pivot. As long as we're below those price points, the seasonal pullback holds a strong potential to come into play.
A final note. Cycles or not, PRICE always rules. Should gold close above the 1767 area, we'll quickly move to favor the uptrend since the beginning of the year to continue. We will review the action as it develops on the daily update. Watch 1755-1767---that's the pivot. A move above there will confirm price strength and favor the move from the beginning of the year is still in play.
Gold looking for the next theme
The strong rally in precious metals during January seems to have run out of steam, at least for now and further consolidation is needed before the eventual push higher. Even an 11 percent cut in margin for holding gold on the COMEX futures exchange failed to lift sentiment. Investments through exchange traded funds, which is viewed as long term holdings, have risen by 40 tons from a recent low to a near record of 2,388 tons while hedge funds have been slow in rebuilding speculative longs.
Technically gold found support at 1,710 but the subsequent rally ran dry ahead of the recent high, with sellers emerging around the 1,750 level. The steep uptrend from December 30 has been broken, signalling consolidation and the likely test of support in the 1670-80 area.
YOU SHOULD NOT TAKE ANY MATERIAL posted on this BLOG AS RECOMMENDATIONS TO BUY OR SELL GOLD OR ANY OTHER INVESTMENT VEHICLE LISTED.
Do your own due diligence.
No one knows tomorrow's price or circumstance.
I intend to portray my thoughts and ideas on the subject which may s be used as a tool for the reader.
I do not accept responsibility for being incorrect in my speculations on market trend.
