Mar 02
02:00 am GMT
Long Term=Up (major resistance held the uptrend – Need monthly closes above 1767-1804)
Medium Term=Up (Major Resistance 1767 Monthly Close)
Intermediate Term=Up---The North American Winter seasonal correction most likely began on 2/29/12 and should last up to March 21st – April 15th
Short Term=down – Resistance at 1738-1755
Support and Resistance for Friday
Initial Resistance for 1738-1741 and 2nd tier 1754-1764
Initial Support 1699-1711 and 2nd tier 1666-1679
In last night’s website update, resistance was listed at 1728-1741 and the high was 1726---Support was listed at 1685-1696 and the low was 1694. (All prices spot)
Recap and Overview
02:00 am GMT
Long Term=Up (major resistance held the uptrend – Need monthly closes above 1767-1804)
Medium Term=Up (Major Resistance 1767 Monthly Close)
Intermediate Term=Up---The North American Winter seasonal correction most likely began on 2/29/12 and should last up to March 21st – April 15th
Short Term=down – Resistance at 1738-1755
Support and Resistance for Friday
Initial Resistance for 1738-1741 and 2nd tier 1754-1764
Initial Support 1699-1711 and 2nd tier 1666-1679
In last night’s website update, resistance was listed at 1728-1741 and the high was 1726---Support was listed at 1685-1696 and the low was 1694. (All prices spot)
Recap and Overview
April Gold rebounded to the 23% Fibonacci retracement (1726) from Wednesday’s sell-off as shorts took profits and stability returned to the marketplace. Word also circulated that a 31-tonne gold sale from a large European hedge fund may have prompted the sell-off. Gold option prices did not expand as large as it usually does on a sell-off and according to FMX Connect that might suggest that the market is expecting the 1700 area to provide support. We’re not sure if the market has found support yet.
The 1700 area stops were cleared out in an after hour raid to 1688 yesterday. Today’s 1703 low in New York provided support today and that is the area that now needs to be watched first. The charts indicate support in the 1650-1675 area and with the 200 day average at 1675, there is the potential to trade down from there. The real question becomes is whether the induced sell-off yesterday is enough to maintain a downtrend, or whether the bulls are now going to support the 1700 area again. Part of the problem is that it is hard to believe that a seller of gold would dump that much gold and silver on the market in a 75 minute span. We suspect manipulation, but all markets are now being “managed” in one way or another.
Euro landThe 1700 area stops were cleared out in an after hour raid to 1688 yesterday. Today’s 1703 low in New York provided support today and that is the area that now needs to be watched first. The charts indicate support in the 1650-1675 area and with the 200 day average at 1675, there is the potential to trade down from there. The real question becomes is whether the induced sell-off yesterday is enough to maintain a downtrend, or whether the bulls are now going to support the 1700 area again. Part of the problem is that it is hard to believe that a seller of gold would dump that much gold and silver on the market in a 75 minute span. We suspect manipulation, but all markets are now being “managed” in one way or another.
The ECB doled out more than $700 billion in loans to over 800 banks yesterday morning in what may have been its last loan for a time to come. While many are calling the latest ECB operation as a “liquidity injection”, the amounts in question are loans and have a three-year shelf-life. The question now is will the banks lend out the money for economic recovery or will they do as in USA and sit on it.
Gold Stocks Short Term (NUGT) –
Neutral since 2/29/12 at 22.80
PIVOT (23.68-23.83) ------- Right at the moving averages
US Dollar Long Term
PIVOT (23.68-23.83) ------- Right at the moving averages
NUGT held right at the WHITE Channel line. We’ve zoomed in with a GANN GUNNER24 Overlay to see where the next target point might be at. The coming cycle matches with the GoldTrends cycle that is due around March 7th-8th. It looks like it has potential to move to the 26.50 area if the cycle turns out to be a high. RIGHT NOW, the moving averages and PRICE are right at the point of either supporting or breaking down. We need a close above 24.60 to continue the upside. The current condition is neutral. We have a choppy and overlapping pattern, but as long as price is above the support at 21.60-22.40 the trend will still be up.
It looks like it decision time on the very short term. A close above 24.60 will favor the very short term uptrend. A close below 21.60 favors lower.
It looks like it decision time on the very short term. A close above 24.60 will favor the very short term uptrend. A close below 21.60 favors lower.
US Dollar Long Term
On last night’s Long term chart, we looked at the gold and the midway green channel line. We discussed earlier in the week that the ‘control boyz’ and funds and traders know about that line also. So to some extent, once the cascade started, the stops followed in that 100 dollar gold drop.
The US dollar is at an even bigger channel line. The 2001 downtrend line. If there was ever a chart that shows the cost of war, it’s the US dollar. The invasion of IRAQ was right at the dollar top. The rest is the spending. But here we are at the major line. For four months the market has been trying to close above the long term channel and now the 34 month LONG TERM MOVING average has arrived at the same point in time and a long term price decision looks to be in the making.
There are basically two long term points---the bull bear zone at 88-90 and this current area. There are no other more important numbers. It takes a close above 82.50 to really set things going for the dollar to be favored. The monthly close for FEB was just enough to keep the USD above that 78.58-79.74 PIVOT. Should the USD close back above 80, we’ll start taking a look. At the moment, price HAS NOT BROKEN DOWN yet. This long term line is the place and should set the pace for the remainder of the year.
The US dollar is at an even bigger channel line. The 2001 downtrend line. If there was ever a chart that shows the cost of war, it’s the US dollar. The invasion of IRAQ was right at the dollar top. The rest is the spending. But here we are at the major line. For four months the market has been trying to close above the long term channel and now the 34 month LONG TERM MOVING average has arrived at the same point in time and a long term price decision looks to be in the making.
There are basically two long term points---the bull bear zone at 88-90 and this current area. There are no other more important numbers. It takes a close above 82.50 to really set things going for the dollar to be favored. The monthly close for FEB was just enough to keep the USD above that 78.58-79.74 PIVOT. Should the USD close back above 80, we’ll start taking a look. At the moment, price HAS NOT BROKEN DOWN yet. This long term line is the place and should set the pace for the remainder of the year.
Medium Term – Up (at seasonal downtrend)
the key now is to stay focused on the seasonal until proven wrong.
The seasonal below looks to have initiated and the “ides of March” looks to be in play. For the next three weeks, we’ll have to be careful and favor that the metals are going to be under pressure. We’ll look at the price patterns on the rebound and if we see choppy and overlapping conditions, we’ll favor the seasonal is in play. It takes a close above 1767-1775 to change the trend back to up.
One note to consider however is that the 100 dollar drop satisfies the average 4% drop that is the 10 year average. Is it possible to have an entire correction take place in a day? Incredibly, the only time it can be considered is during a super bull market move. So a lot is going to ride on the price pattern and if it displays impulsive action or whether it will be a choppy and overlapping move back up. Since it’s only been 24 hours, it’s too early to determine yet. It’s best to remain cautious.
One note to consider however is that the 100 dollar drop satisfies the average 4% drop that is the 10 year average. Is it possible to have an entire correction take place in a day? Incredibly, the only time it can be considered is during a super bull market move. So a lot is going to ride on the price pattern and if it displays impulsive action or whether it will be a choppy and overlapping move back up. Since it’s only been 24 hours, it’s too early to determine yet. It’s best to remain cautious.
Intermediate Trend
Moving Average Trend – was Bullish (since 159.95) Now Neutral at 164.29 on 3/1/12
RESISTANCE (169.20-169.31) Close---164.30---up 2.30
Trend
The trend is neutral with a downside bias at the moment. It takes a close above 170 to favor higher.
Swing Traders
any push back to 169.00-169.50 is a consideration for a short position. Notice how price is trading back and forth off the white channel line and how that lone was support during the drop of Feb 13th. There is only 11 cents between the Bullish Blue and the Bearish Red Moving Average lines. In other words, the averages are most likely going to go into bear mode. That will not guarantee anything of course, but it will tilt the odds to favoring lower at a time when the seasonal month of March is one of the worse times of the year to own the metals. Any move back to the averages is a candidate for a short with a stop above 173 on a closing basis.
Since the next cycle turn is not due until the 7th-8th of March, it’s possible we could move up these mini red channel lines in a choppy fashion. If we do, that will favor a peak and lower prices in March.
Since the next cycle turn is not due until the 7th-8th of March, it’s possible we could move up these mini red channel lines in a choppy fashion. If we do, that will favor a peak and lower prices in March.
Year to Date Moving average signals – Bullish 159.95 – Neutral 164.29
Short Term (cycles)
Cycle land is open to a few interpretations. If we’re having a cycle failure, odds favor a move to the 1625-1637 area will develop rather quickly. Gold needs a close above 1725-1730 at a minimum to stabilize the price drop.
The other side of the coin is that it was a manipulated event on Monday and prices are going to turn and march straight back up into a high next week as we had originally favored. There is not much we can do about days like yesterday except to use STOPS. One of the things very important about the last trade for you to consider is that even with this 100 dollar drop the strategy used still turned a profit. I emphasize this because there were some casualties out there. To use 2 or 3 contracts, and to sell some on the way up and to keep bringing up the stops as price gets higher never lets you pick the bottom or the top. But it’s much less risky and when you trade these markets, there is no other way to survive but to eliminate risk as much as possible.
More importantly is the fact that we discussed for TWO DAYS before that the area we were at had the potential to be the high for the year. But doing the right thing also means trying to not pick tops and letting the stop take you out. The one thing I will admit that is changing is the HUGE moves off of these resistance area’s are so wide in range and fast that the time to switch over has hurt and makes it harder to not try and pick a top or use tighter stops.
The other side of the coin is that it was a manipulated event on Monday and prices are going to turn and march straight back up into a high next week as we had originally favored. There is not much we can do about days like yesterday except to use STOPS. One of the things very important about the last trade for you to consider is that even with this 100 dollar drop the strategy used still turned a profit. I emphasize this because there were some casualties out there. To use 2 or 3 contracts, and to sell some on the way up and to keep bringing up the stops as price gets higher never lets you pick the bottom or the top. But it’s much less risky and when you trade these markets, there is no other way to survive but to eliminate risk as much as possible.
More importantly is the fact that we discussed for TWO DAYS before that the area we were at had the potential to be the high for the year. But doing the right thing also means trying to not pick tops and letting the stop take you out. The one thing I will admit that is changing is the HUGE moves off of these resistance area’s are so wide in range and fast that the time to switch over has hurt and makes it harder to not try and pick a top or use tighter stops.
What Next
A deep zoom in on the chart shows that today’s action was totally technically trade driven as each probe up has found resistance at 1725 at the 38% retrace of the 100 dollar rout. Thus we’re seeing some longs who are liquidating positions on a bounce and traders who are shorting the 38% rebound. MOST REBOUNDS end at the 38% retrace when trend are strong so there are some who are betting on the downside, or at least that it is not complete. The GANN line suggests that if we move above 1722-1725 today, that the potential to move to 1735-1742 will come into play for Friday. Traders should watch that area. Another good way to measure the move is to use the RED ARC also as a support point.
IF price can move above that mini red dotted downtrend line then the RED ARC and the MINI dotted RED line inside the ARC will be support. Traders can consider a long on a move above the mini red arc with a stop at the RED ARC, moving the stop up as it rises. Target the 1735 area. If price gets above the MINI DOTTED downtrend line, then favor a trade range of 1720-1735 for Friday. Should a sharp rally take place, the 1747-1755 area would be the next target.
IF price can move above that mini red dotted downtrend line then the RED ARC and the MINI dotted RED line inside the ARC will be support. Traders can consider a long on a move above the mini red arc with a stop at the RED ARC, moving the stop up as it rises. Target the 1735 area. If price gets above the MINI DOTTED downtrend line, then favor a trade range of 1720-1735 for Friday. Should a sharp rally take place, the 1747-1755 area would be the next target.
One of the things most difficult is not jumping in at these low prices. When we see price move from 1695 to 1725 it’s very hard to not get on board. It will be even harder if price goes to 1750. It’s hard for me too, but I’m looking to take trades that have a good chance of making a profit and that means that I’m not usually going to pick a bottom. Many get discouraged when price moves up 50 dollars and you say, why didn’t (he) buy? Well, why didn’t you? There are people who went short at the 1790 area because of the information provided in the update.
Each of us has a certain style and I can’t format mine to come up with a one size fits all. I’m trying to catch the middle of the runs and limit the losses and pick the spots that have the best chance. There is a reason I do this. It is because I’ve wiped out more than one account in my life. I’ve got it down over the past few years now that have been profitable. That is my only aim.
The support and resistance area’s work pretty good for those of you who are doing your own trading. If your following along with some of the trades on the website, then understand that my only aim is to show a profit on the trades. It is not for entertainment or action. The only time you should get discouraged is when there are losses every month. As most of you know, making a profit every month is not an easy thing in trading. But the more trades per month, the more chance you have of being wrong and losing money. That has been my experience. So, if we move to 1750 don’t get discouraged as if you’ve missed the train. Trading is not about that. IT DOESN’T matter the price---there will be a trade that always comes along. It is paramount to think that way. When I see a set up, I’ll list it.
Bottom Line
The chart below shows the next cycle due on March 7th. If we have a cycle failure here then the price target of 1662-1675 will come into play. If we’re still going to move higher into that date then the 1750-1755 area or the 1767-1775 zones is the favored price area. If we have a push back up into March 6th-8th in that area, a short position set up will have the focus.
If prices move lower into that area, then the 1662-1675 area will come into play. 1675 is where the 200 day moving average resides so that’s another factor in that support. Most important would be the Gann Angle.
Friday is usually an up day, but the market will still have a lot of players on the side until next week. On the upside, look for 1730-1741 and on the downside, the 1709-1713 area will be first support. With a long range day like we had on Wednesday, the downside has the bias. Look for a price resistance at either 1725-1730 or 1741-1747 if the bounce from Thursday continues. WATCH 1725-1730 as that looks like the pivot for Friday. With the LONG RANGE bar on Wednesday,we have to favor the downside has the advantage. We've been in a bounce now for 36 hours, and while it can continue on Friday, the odds favor the downside has the advantage at the moment. If we get a move to 1738-1750, depending on the pattern, it might be a place to short for traders.
00:10 am GMT
Gold fell by 5 % to about $1,690 an ounce for
Gold fell by 5 % to about $1,690 an ounce for
its biggest one-day drop
What is the main reason
What is the main reason
So what is the main reason that triggers the fall? In his semi-annual testimony to the U.S. Congress, U.S. Federal Reserve Chairman Ben Bernanke did not mention another round of monetary easing which people have been hoping for. He said that while the decline in the U.S. unemployment rate has been more rapid than expected, it would not continue dropping unless economic growth accelerated. Bernanke’s remarks hit gold particularly hard because heavy bullish bets had been placed leading up to the European Central Bank’s offering of low-interest loans as it bought more time to sort out the debt crisis.
After the news was announced, speculation that central banks might be done with easy monetary policies led funds to exit the bullion trade taking profits from the session high. The main reason for it to drop pass the $1700 limit was due to the triggering of $1700 sell limits, at which point sell signals hit every bid all the way to $1685 then a knee jerk bounce appeared, in some rather chaotic late day trading in paper gold.
This is obviously an old trick in the bag for Bernanke every time he talks in congress. Building up the possibility of a QE and stalling for time by doing nothing. They will cause a short in the precious metal markets in the morning and next day, buy physical with the loot from the small players that get wipe out in the market. This play has been working like a charm so far for them.
So is another round of QE coming? I am 99% sure it will happen. There will come a point in time when there is no more rabbit for Ben to pull out from his hat to stall for time and he will have to pull out the QE. As long as USA and Europe crisis persist. Gold and silver will continue to rise steadily. They are definitely not on its way to a healthy recovery. It is like a sick final stage cancer patient now given morphine (QE) as a last resort for pain relief. They will need more than a miracle from god to save them.
Some overleveraged investors were forced out of the trade as gold fell 4.3% on Wednesday. Gold needs to hold on to $1,705-$1,700 an ounce this week to have hopes for another leg up.
After the news was announced, speculation that central banks might be done with easy monetary policies led funds to exit the bullion trade taking profits from the session high. The main reason for it to drop pass the $1700 limit was due to the triggering of $1700 sell limits, at which point sell signals hit every bid all the way to $1685 then a knee jerk bounce appeared, in some rather chaotic late day trading in paper gold.
This is obviously an old trick in the bag for Bernanke every time he talks in congress. Building up the possibility of a QE and stalling for time by doing nothing. They will cause a short in the precious metal markets in the morning and next day, buy physical with the loot from the small players that get wipe out in the market. This play has been working like a charm so far for them.
So is another round of QE coming? I am 99% sure it will happen. There will come a point in time when there is no more rabbit for Ben to pull out from his hat to stall for time and he will have to pull out the QE. As long as USA and Europe crisis persist. Gold and silver will continue to rise steadily. They are definitely not on its way to a healthy recovery. It is like a sick final stage cancer patient now given morphine (QE) as a last resort for pain relief. They will need more than a miracle from god to save them.
Some overleveraged investors were forced out of the trade as gold fell 4.3% on Wednesday. Gold needs to hold on to $1,705-$1,700 an ounce this week to have hopes for another leg up.
Supports / Resistances
Res 2 1,744.1800
Ex-High 1,726.0000
Res 1 1,731.2200
Pivot 1,713.0300
Sup 1 1,700.0700
Ex-Low 1,694.8500
Sup 2 1,681.8800
Mar 01
5:00 am GMT
Long Term=Up (but at major resistance – and one of the two price point highs for the year)
Medium Term=Up (but at major resistance)
Intermediate Term=Up (but at major resistance)
The North American Winter seasonal correction has most likely taken place.
Short Term=down – the close above 1767 never transpired as the last day of February trading was a disaster. Gold traded from a high of 1790 to low of 1688. Look for a bounce but odds favor the trend is going to turn lower. With such a big range, its best to let things settle.
Support and Resistance for Thursday
Initial Resistance for 1728-1741 and 2nd tier 1754-1764
Initial Support 1685-1696 and 2nd tier 1650-1666
In last night’s website update, resistance was listed at 1788-1802 and the high was 1790---Support levels were taken out and price collapsed.
Recap and Overview
the last trading day of February in Gold and Silver was a disaster. It is hard not to believe that it wasn’t a set-up. When we said the Bernanke speech would be the event of the day, little did we realize how big the event would become? Within a half hour of Bernanke’s testimony the gold and silver markets were crushed.
With First Notice day up for March silver futures, the flood gates were opened up. First day notice is when holders of paper futures give notice to the exchange that they intend to take delivery the silver claims they hold from the Comex warehouse. The amount of paper held is multiples of the bullion that can be delivered at current prices.
We are being told that the reason that gold and silver sold off because Bernanke is not going to do QE3 is a bunch of bull if you ask me. As Jesse’s café said, Bernanke does not need to do QE3. The Fed is all over these markets in Operation Twist. If this was really the reason, then the stock market would have sold off in the same manner and that is why I don’t buy the excuse.
The short term trend now will have to be watched as this type of activity where a 100 dollar move occurs has skewed all the indicators.
One of the things that are paramount to trading is the use of stops. If one does not use stops, then he/she is doomed on a day like this. If you choose not to use stops, you will get wiped out, sooner or later. Yes, stops can be hunted for but as today shows, anything is possible in the markets. If you’re not using stops, and the market drops 100 dollars like today, and then another 100 dollars the next day, you’re basically finished, wiped out. So there is no choice. And on days like today, even if you’re right there, any hesitation in getting out results in a deeper loss. One way to look at it is this. Even with today’s crush, the 1722 long gold position got stopped out at 1739.50 and was still a gain. It is a matter of discipline that because of days like today, one has no choice but to use them.
It’s not like we weren’t aware of the situation potential either. Last night we posted in big letters----------“Everyone will be listening and watching --- so it’s also a GREAT PLACE FOR A TRADER FLUSH TO OCCUR IN METALS. “
The other factor we discussed just last night was that we could be seeing the highs for the year as this area was one of two most likely price points based on the channels for a yearly high. The thing that is aggravating is for price to move 100 dollars and not give opportunity to see weakness set into the markets and allow proper action to be taken.
We discussed last night that the 1767 area is a price point that the shorts did not want to see February close above as it would portend more bullish potential on the charts. We can now kiss 1767 and 1804 off the radar for the time being. Now the North American seasonal is at full view.
Finally, it is obvious that when short term trading gold, there is a good case to be made to stand aside WHEN BERNANKE comes on to speak. It’s better to just wait and look for another set-up to develop. While all that talk is well and good, the bottom line is did the website gold trade make any money or did it take a loss?
When we look at the trade consideration on the website, even with today’s hit, the gain on the trade was still 48 dollars per ounce profit. The entry’s were 1722, 1728 and 1736.50 on the April Contract. The exits were 1736.50, 1755, and 1739 on today’s stop out of the last contract---thus yielding a 48 dollar gain per ounce. So with all the hoopla that occurred, the trade was still successful. It was successful due to the discipline employed. We sold some on the way up, when the top came, there was only one contract left, and even though it got stopped out, it was a profitable trade. NOT ONE OF THE THREE CONTRACTS in the trade took a loss. This is the type of discipline required. At the end of the day, I am satisfied with this trade. I didn’t pick the bottom; I didn’t pick the top, but took the middle half of the trade price move and made a profit with it. It is this type of discipline that is required to be a trader and have a 100 dollar down day still yield a profit. It speaks volumes for doing the right thing. And just for the record, we did put in sell orders to get out of the final contract on the trade signal page last night. It’s just that the price did not get hit.
While everyone has a different trade style, the thing we did on the website trade was to sell some on the way up in price, and raise the stop to 1741.90 on the last remaining contract --- and as it turned out, it was the right thing to do. As much as I hate to use small contracts, it gives one the ability to have 3 contracts and employ a strategy as mentioned above. If you buy just one large 100 ounce contract, you get plenty of liquidity, but you can’t employ strategy with it. You’re forced to try and pick the top and that is an almost impossible thing to do consistently.
When we say, the right thing to do, we mean that we didn’t try and pick the top as it could have gone the other way. What if we exited and gold would have gone up 100 dollars instead of down? The idea of picking the top and bottom and making money is a road I’ve never seen anyone be successful in. However, in retrospect, a case can be made for cashing out at a major channel line as we just witnessed. And that is why I must have advocated for over a week to consider taking ½ your profits off the table. If you did that, and you used a stop, you still should have walked out of the trade with a profit. We did on the website trade. But it was by using discipline, and selling some on the way up and having a stop on the way down.
One of the first things that come up as far as trading goes, is do we get back in now that the stops have been cleared out? The difficulty in answering the question comes back to whether today was a manipulated event, or if a real trend down is under way? And to further add difficulty to the equation is when we have a 100 dollar day, does it mean that we’re already done the correction and price now is going to move higher?
What it comes down to in trading is finding another spot where the risk will be the lowest and the stop can be placed without having to take a big hit. So, as difficult as it is, sometimes it is best to sit back and wait for another opportunity. And that is the hardest thing to do in trading because it can be so addictive that we always want to be engaged. But we always have to remember is that while it is about making money it has to carefully be crafted. We were lucky to have done so on the trade we were holding.
Thus it is a must that we always have to approach the market not concerned that we are missing the move or we want to be in. I get emails during the day---should I enter here at 1775 or some number? It becomes impossible to answer the question in a right manner, because its 50 dollars above where the first recommendation was made to get in. What ends up happening is that the Risk/Reward is not the same and it’s not something that can be answered as there is no good place to put a stop on.
We must always wait for a set-up and not be sucked into a thought like the market is getting away from me; I should have got in earlier and all the other things that go on in our mind. We have to approach it in a manner where we say, I will wait until I see a set up where the odds will be on my side to make a profit.
That’s where I stand tonight. I will not worry if gold goes to 1750. I will not say I could have made 50 dollars per ounce. To me, trying to get in tonight would not be the right thing to do. The right thing to do is to get ready for when the market provides another set-up that looks reasonable. So, I’m going to sit tight tonight and wait for some type of set-up to occur.
Gold Stocks Short Term
Last night favored that the gold stocks would continue higher as price looked like it had cleared the resistance lines. However we did mention that what we didn’t like was the price pattern was not an impulsive one and since it had a choppy and overlapping look, it had to be considered a counter trend move. That part of the equation played out and today’s drop takes NUGT out of bullish mode and in a neutral/bearish condition at the moment. There’s a gap at 22.20 that price will probably try and fill. But the overall short term condition of the gold stocks is one that at the moment, the short term trend is favored to the downside.
Until the choppy and overlapping condition remains in the price pattern, its best to not try and force the upside. The condition on the HUI Gold index is the same. The moving averages for intermediate term are rolling over. At the moment, it’s best to be on the sidelines in short term trades on the gold stock index.
Bottom line: Gold stocks are not in buy mode at the moment. That pattern is choppy and overlapping and now that it’s below the channel lines, it’s best to wait for a better looking chart pattern.
Long Term – Up
(but at major resistance – and one of the two price point highs for the year)
Last night’s discussion was a bold statement that gold was at one of the two price points that could be the high for the year. The reason was due to the long term channel line being reached. We could argue that this major channel line is part of the reason for such a violent drop. This is what we meant when we discussed that the channel lines act as the major upper standard deviation of price movement. We stated last night ---- The channel is nothing more than a standard deviation of price that the market itself forms. It stands to reason then that the greatest place a market can have a price peak is at the channel line. After all, it is the upper standard deviation of price.
We also stated over the last few days, if you’re looking for a place to sell inventory, or reduce exposure as an investor, that this was the place to consider doing it. It would be nice to know for sure if this was going to be the high or not, but if I knew for sure, I’d be retired and at some tropical island.
The chart below is a zoom in that shows the reaction and how the MIDWAY channels line was the EXACT resistance that held price. With the miss of a close above 1767 on a monthly closing basis today, the downside potential and this correction we’ve been in since August is still in play.
In summary, the long term trend is still up, but the correction from August has not been eliminated as a done deal. This leaves the potential on the long term chart that the lower Green channel line is still key support and that we can’t eliminate another test of it.
Medium Term – Up (but at major resistance)
Discussion last night was the major resistance point that price was at and the consideration to sell at these levels. We also discussed the North American seasonal and the potential for a contra seasonal move. With today’s action, we can put the contra event on the back burner and focus on the seasonal.
The seasonal below looks to have initiated and the “ides of March” looks to be in play. For the next three weeks, we’ll have to be careful and favor that the metals are going to be under pressure. Today’s 100 dollar drop will probably get a rebound. We’ll look at the price patterns on the rebound and if we see choppy and overlapping conditions, we’ll favor the seasonal is in play.
Intermediate Trend
Moving Average Trend – was Bullish (since 159.95) Now Neutral at 164.29 on 3/1/12
SUPPORT (169.08-169.39) Close---164.30---down 9.19
Trend
the unbiased moving average trend finally came out of bull mode on Monday and is now in neutral mode. Today’s devastating 9 dollar drop was horrid but our discussion that price was at the BIG resistance and our expectation for that line to provide resistance did play out.
It is very rare that a market with that much moment can turn and move that much without some help. I’ll leave it at that. The most likely course of action now is for price to move back to the white channel line and then have a downtrend begin and have the moving averages turn down.
Swing Traderswe advocated profit considerations when we were at 173, and we’re assuming you got rid of at least half since we’ve been mentioning often enough. With the trend turn down, a strong consideration for you is to sell any remaining trades at the 166.50-167.00 on any bounce.
In summary, any bounce back to the white channel line and the moving averages should be considered strong resistance. Odds favor price will peak there and the moving averages are going to turn down and trend bearish.
Short Term (cycles)
the price collapse today leaves things in disarray in cycle land. We really feel the entire thing was a manipulated event. Not that we can’t have pullbacks, but 100 dollar drops are not typical events. Today’s price drop was right at the Green Arc line and the final drop to 1688 was done in after hours with no volume. Support is the lower Gann line at 1685-1690. The next cycle is not due to peak until March 4th-11th –so we’re not sure what to expect. Price always rules over cycles. Our best take---and our first impression is that if we get a bounce to next week, we’ll favor a peak and then a turn down. For now, it’s best to let a few days go by, and see what the cycle picture looks like. LOOK FOR RESISTANCE at 1725-1750.
What Next?
It’s going to take a few days to a week before gold regains a natural order. Look for backing and filling. First resistance is the 1725-1750 area. The range is wide, but that’s due to the action and the wide range day we saw on Wednesday. Support is the 1650-1666 area at the lower Gann line. There is also support at today’s lows. Notice how the 1686-1692 area on the chart below was a direct hit. Thus this bounce then looks like it will carry up into the 1730-1750 green area. At least that’s the current resistance point we’re looking at. So we favor back and forth re-positioning and consolidation.
Traders can use the 1735-1750 area as an area to look to exploit with stops above 1757 (ALL PRICE SPOT) Add 2 dollars for April gold.
we have no choice but to wait now for a few days as the market tries and gain composure.
2:00 am GMT
Unexpected selling hit the gold market hard in Wednesday's session after comments by US Federal Reserve Chairman Ben Bernanke spurred a rally in the US Dollar. The initial over-reaction in the precious metals appears to have triggered stop-loss orders at several key levels to drag the price down dramatically by the end of the day. Autochartist identified the move as it reached key resistance and backed off, setting the stage for what appears to be a significant technical breakout. The move is illustrated here on the Autochartist 240-minute time frame.
Gold futures had been moving higher in an orderly Rising Wedge chart pattern throughout the month of February, with the last up-thrust into the upper resistance trend line occurring near $1,800 per ounce. The reversal at first appeared to be a typical pullback to the Rising Wedge support near $1,750 per ounce, which would have been the level for a bounce if the uptrend were going to continue. Once this level was breached, the downside breakout was confirmed as short sellers entered and stop-losses were hit.
0:20 am GMT
Market it should go up from 1690 to 1725
Gold plunged in afternoon trading falling from 1792.15 dropping to 1705.25 in a matter of minutes to settle at 1713.35. As Fed Chief Bernanke spoke gold began to drop. Some investors think it is the Fed Directors way of controlling inflation. Gold lost over 75.00 in just a short while. The shiny metal had picked up a small gain in early trading on the ECB loan program. The European Central Bank on Wednesday confirmed a larger-than-expected 529.5 billion euro ($713.4 billion) in loans to banks at its second three-year long-term refinancing operation.
The dollar turned up against major currencies and extended gains against the euro after comments from Federal Reserve Chairman Ben Bernanke fueled strength in the dollar, and as upbeat U.S. economic data dulled safe-haven demand for the metal. In testimony prepared for the House Financial Services Committee, Bernanke said that recent improvement in employment has put the Fed on alert and that it’s watching incoming data closely.Bernanke stopped short of saying the improvement in the jobless rate meant a better economy ahead.
The dollar turned up against major currencies and extended gains against the euro after comments from Federal Reserve Chairman Ben Bernanke fueled strength in the dollar, and as upbeat U.S. economic data dulled safe-haven demand for the metal. In testimony prepared for the House Financial Services Committee, Bernanke said that recent improvement in employment has put the Fed on alert and that it’s watching incoming data closely.Bernanke stopped short of saying the improvement in the jobless rate meant a better economy ahead.
The Commerce Department said Wednesday that the economy expanded at a 3 percent annual rate in the October-December quarter — the fastest pace since the spring of 2010. It exceeded the previous estimate of 2.8 percent.
Economic Events: (GMT)
06:45 CHF GDP (QoQ) -0.1% 0.2%
Gross Domestic Product (GDP) measures the annualized change in the inflation-adjusted value of all goods and services produced by the economy. It is the broadest measure of economic activity and the primary indicator of the economy’s health.
07:00 GBP Nationwide HPI (MoM) 0.3% -0.2%
The Nationwide Housing Price Index (HPI) measures the change in the selling price of homes with mortgages backed by Nationwide. It is the U.K.’s second earliest report on housing inflation.
A higher than expected reading should be taken as positive/bullish for the GBP, while a lower than expected reading should be taken as negative/bearish for the GBP.
08:30 CHF SVME PMI 48.5 47.3
The Schweizerischer Verband für Materialwirtschaft und Einkauf (SVME) Purchasing Manager’s Index (PMI) measures the activity level of purchasing managers in the manufacturing sector. A reading above 50 indicates expansion in the sector; a reading below 50 indicates contraction. Traders watch these surveys closely as purchasing managers usually have early access to data about their company’s performance, which can be a leading indicator of overall economic performance.
A higher than expected reading should be taken as positive/bullish for the CHF, while a lower than expected reading should be taken as negative/bearish for the CHF.
08:50 EUR French Manufacturing PMI 50.2 50.2
08:55 EUR German Manufacturing PMI 50.1 50.1
09:00 EUR Manufacturing PMI 49.0 49.0
09:30 GBP Manufacturing PMI 52.0 52.1
The Manufacturing Purchasing Manager’s Index (PMI) measures the activity level of purchasing managers in the manufacturing sector. A reading above 50 indicates expansion in the sector; a reading below 50 indicates contraction. Traders watch these surveys closely as purchasing managers usually have early access to data about their company’s performance, which can be a leading indicator of overall economic performance.
A higher than expected reading should be taken as positive/bullish for the EUR or GBP, while a lower than expected reading should be taken as negative/bearish for the EUR or GBP.
10:00 EUR CPI (YoY)
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.
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.
10:00 EUR Unemployment Rate 10.4% 10.4%
The Unemployment Rate measures the percentage of the total work force that is unemployed and actively seeking employment during the previous month. The data tends to have a muted impact as there are several earlier indicators related to labor conditions in the euro zone.
A higher than expected reading should be taken as negative/bearish for the EUR, while a lower than expected reading should be taken as positive/bullish for the EUR
13:30 USD Core PCE Price Index (MoM) 0.2% 0.2%
The Core Personal Consumption spending (PCE) Price Index measures the changes in the price of goods and services purchased by consumers for the purpose of consumption, excluding food and energy. Prices are weighted according to total expenditure per item. It measures price change from the perspective of the consumer. It is a key way to measure changes in purchasing trends and inflation.
13:30 USD Personal Spending (MoM) 0.4% 0.0%
Personal Spending measures the change in the inflation-adjusted value of all spending by consumers. Consumer spending accounts for a majority of overall economic activity. However, this report tends to have a mild impact, as government data on retail sales is released about two weeks earlier.
13:30 USD Initial Jobless Claims 353K 351K
13:30 USD Continuing Jobless Claims 3400K 3392K
Initial Jobless Claims measures the number of individuals who filed for unemployment insurance for the first time during the past week. This is the earliest U.S. economic data, but the market impact varies from week to week. Continuing Jobless Claims measures the number of unemployed individuals who qualify for benefits under unemployment insurance.
15:00 USD ISM Manufacturing Index 54.6 54.1
The Institute of Supply Management (ISM) Manufacturing Purchasing Managers Index (PMI) rates the relative level of business conditions including employment, production, new orders, prices, supplier deliveries, and inventories.
The data is compiled from a survey of approximately 400 purchasing managers in the manufacturing industry.
On the index, a level above 50.0 indicates industry expansion, below indicates contraction.
15:00 USD Fed Chairman Bernanke Testifies
Federal Reserve Chairman Ben Bernanke (February 2006 – January 2014) is to testify on the economic outlook and recent monetary policy actions before the Joint Economic Committee, in Washington DC. The testimony is in two parts; the first is a prepared statement, then the committee conducts a question and answer session. The Q&A portion of the testimony can see heavy market volatility for the duration.
23:30 JPY Unemployment Rate 4.5% 4.6%
The Unemployment Rate measures the percentage of the total work force that is unemployed and actively seeking employment during the previous month. The data tends to have a muted impact relative to employment data from other countries because the Japanese economy is more reliant on the industrial sector than personal spending.
23:30 JPY Tokyo Core CPI (YoY) -0.4% -0.4%
The Tokyo Core Consumer Price Index (CPI) measures the change in the price of goods and services purchased by consumers in Tokyo, excluding fresh food.
Feb 29
9:20 pm GMT
Dollar gains after Bernanke speech;
euro down, gold plunges $100
The euro fell sharply against the dollar during the U.S. trading session after a testimony from U.S. Federal Reserve Chairman Ben Bernanke suggested the Fed was unlikely to engage in more easing in the short term. With no mention of QE3, the markets reacted negatively and risk appetite was dampened.
In his testimony before Congress, Bernanke said the U.S. recovery remains uneven while oil-driven inflation risks will be temporary and global market issues continue to pose downside risks.
Euro pared all gains made earlier against the dollar when it rose after the ECB allotted 530 billion euros in its second LTRO, which allowed commercial banks to borrow at a low rate of 1 percent, with the aim of averting a credit crunch. EURUSD fell to a session low of 1.3313 from an early session high of 1.3467.
The dollar reversed losses and gained broadly against most major currencies. The ICE dollar index which tracks the greenback’s performance against a basket of major currencies, rose to 78.617 from 78.156 before Bernanke’s comments.
The British pound trimmed earlier gains, with GBPUSD falling to 1.5903 from 1.5990.
Against the yen, the dollar reversed losses and strengthened to Y81.30 from Y80.24.
USDCAD bounced from a five-month low of 0.9843 to 0.9908.
Gold was the biggest loser, plunging around $100 just in New York trading hours, falling from $1,786.02 to $1,686.70.
Medium Term=Up (but at major resistance)
Intermediate Term=Up (but at major resistance)
The North American Winter seasonal high remains on our radar. Right now we still favor higher prices into next week and we want to see prices weaken first. We still have a contra seasonal possibility where prices can continue higher. Stay tuned.
Short Term=Up. Mid Week Wednesday is the last trading day of the month. We need to close above 1767 to keep the upside rally build up in confirmation mode. The minor pullback looks completed. We favor higher to March 4th-11th at the moment and then the short term cycles are due to turn down into the 21st of March (plus or minus 72 hours).
Support and Resistance for Wednesday
Initial Resistance for 1788-1802 and 2nd tier 1812-1825
Initial Support 1763-1773 and 2nd tier 1744-1752
For Wednesday –FED CHIEF BERNANKE SPEECH
The next upside resistance needed to overcome is a close above strong technical resistance at the November high of $1804 to $1,808. On the downside, it takes a close below support at $1,740 to favor a short term top is in place.
First resistance on Wednesday is 1792-1800
First support is 1759-1767.
What Next?
The minor pullback looks complete and higher price is favored into Wednesday.
The price pattern remains impulsive (Bullish). Fed Chief Bernanke speech is the most important thing for Mid Week Wednesday.
This Gann chart below shows the trend line that gold is holding since the lows. As long as price is above that channel line, the trend is up. We just about got a long range day yesterday which is common at month end. It looks like 1800 and the last day of February has a date with destiny. How is it that we mention 1767 or 1804 as the key number for the monthly close and somehow the market seems to know to go there? It is painted by the control boyz or is the natural market itself when the collective bidding comes into play? Or is it just how the game is played? Of course, it could be coincidence and the market is random. And when someone spends a week with charts, it does look random. We favor higher for Wednesday, but remember that Fed Chief Bernanke speaks, so let’s get ready just in case for a spike in either direction or both. There’s not much we can do about it.
Bottom LineWith the Bernanke on stage Wednesday, gold may remain within these price ranges. The Resistance area’s on the chart is the next target. We need to keep holding that channel line to maintain momentum. This should be the last push up on this short term cycle.
Until price shows weakness ---favor higher.
Until price shows weakness ---favor higher.
Economic Events: (GMT)
13:30 USD GDP Price Index (QoQ) 0.4% 0.4%
13:30 USD GDP (QoQ) 2.8% 2.8%
The GDP Price Index measures the annualized change in the price of all goods and services included in gross domestic product. It are the broadest inflationary indicator.
14:30 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.
14:45 USD Chicago PMI 61.8 60.2
The Chicago Purchasing Managers’ Index (PMI) determines the economic health of the manufacturing sector in Chicago region. A reading above 50 indicates expansion of the manufacturing sector; a reading below indicates contraction. The Chicago PMI can be of some help in forecasting the ISM manufacturing PMI.
15:00 USD Fed Chairman Bernanke Testifies
Federal Reserve Chairman Ben Bernanke (February 2006 – January 2014) is to testify on the economic outlook and recent monetary policy actions before the Joint Economic Committee, in Washington DC. The testimony is in two parts; the first is a prepared statement, then the committee conducts a question and answer session. The Q&A portion of the testimony can see heavy market volatility for the duration.
19:00 USD Beige Book
The Federal Reserve’s Beige Book is a report on current economic conditions in each of the 12 Federal districts in the U.S. It gives a picture of economic trends and challenges in the U.S. It is released 8 times a year, 2 weeks before each Federal Open Market Committee meeting. The report is used by the FOMC in their decision on short-term interest rates.
Feb 28
13:30 USD GDP Price Index (QoQ) 0.4% 0.4%
13:30 USD GDP (QoQ) 2.8% 2.8%
The GDP Price Index measures the annualized change in the price of all goods and services included in gross domestic product. It are the broadest inflationary indicator.
14:30 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.
14:45 USD Chicago PMI 61.8 60.2
The Chicago Purchasing Managers’ Index (PMI) determines the economic health of the manufacturing sector in Chicago region. A reading above 50 indicates expansion of the manufacturing sector; a reading below indicates contraction. The Chicago PMI can be of some help in forecasting the ISM manufacturing PMI.
15:00 USD Fed Chairman Bernanke Testifies
Federal Reserve Chairman Ben Bernanke (February 2006 – January 2014) is to testify on the economic outlook and recent monetary policy actions before the Joint Economic Committee, in Washington DC. The testimony is in two parts; the first is a prepared statement, then the committee conducts a question and answer session. The Q&A portion of the testimony can see heavy market volatility for the duration.
19:00 USD Beige Book
The Federal Reserve’s Beige Book is a report on current economic conditions in each of the 12 Federal districts in the U.S. It gives a picture of economic trends and challenges in the U.S. It is released 8 times a year, 2 weeks before each Federal Open Market Committee meeting. The report is used by the FOMC in their decision on short-term interest rates.
Feb 28
We now expect that the gold price will develop a new range of $1,750 to $1,785 over the next week. For today, look to trade a $1,760 to $1,775 range.
Price has pulled back on the mini dip and has hit that support line as Monday’s range bound day played out. It really looks like that 1755-1760 area is the area we either hold or that mini pullback drifts into Wednesday. One of the things that are happening is the daily support areas under 1755 area drying up and show potentials of 1725 come back in play. That would be a perfect scenario to take out some stops and then have price reverse back up. The new game is if you don’t have a 50 dollar stop, it’s very hard to play the game.
Economic Events: (GMT)
07:00 EUR GfK German Consumer Climate 6.1 5.9
The Gfk German Consumer Climate Index measures the level of consumer confidence in economic activity. The data is compiled from a survey of about 2,000 consumers which asks respondents to rate the relative level of past and future economic conditions.
08:15 CHF Employment Level 4.03M 4.02M
The Employment Level measures the number of people employed during the previous quarter. Job creation is an important indicator of consumer spending.
A higher than expected reading should be taken as positive/bullish for the CHF, while a lower than expected reading should be taken as negative/bearish for the CHF.
Tent CHF SNB Board Member Jordan Speaks
Swiss National Bank (SNB) Vice Chairman (May 2007 – January 2012) Thomas Jordan is to speak. In January 2010 his title changed from Board Member to Vice Chairman. As a member of the SNB’s Governing Board, which sets short term interest rates, he has a major influence over the value of the Swiss franc. Traders watch his speeches closely as they are often used to drop subtle hints regarding future monetary policy and interest rate shifts.
11:00 GBP CBI Distributive Trades Survey -14 -22
The Confederation of British Industry (CBI) Distributive Trades Survey (DTS) measures the health of the retail sector. The reading is compiled from a survey covering 20,000 firms responsible for 40% of employment in retailing. It includes measures of sales activity across the distributive trades. It is a leading indicator of consumer spending. The figure is the difference between the percentage of retailers reporting an increase in sales and those reporting a decrease.
Tent EUR German CPI (MoM) 0.5% -0.4%
The German Consumer Price Index (CPI) measures the changes in the price of goods and services purchased by consumers.
13:30 USD Core Durable Goods Orders (MoM) 0.0% 2.2%
13:30 USD Durable Goods Orders (MoM) -0.8% 3.0%
Durable Goods Orders measures the change in the total value of new orders for long lasting manufactured goods, including transportation items.
A higher than expected reading should be taken as positive/bullish for the USD, while a lower than expected reading should be taken as negative/bearish for the USD.
15:00 USD CB Consumer Confidence 63.0 61.1
Conference Board (CB) Consumer Confidence measures the level of consumer confidence in economic activity. It is a leading indicator as it can predict consumer spending, which plays a major role in overall economic activity. Higher readings point to higher consumer optimism.
Feb 27
Long Term=Up
Medium Term=Up
Intermediate Term=Up
Short Term =Bullish.
07:00 EUR GfK German Consumer Climate 6.1 5.9
The Gfk German Consumer Climate Index measures the level of consumer confidence in economic activity. The data is compiled from a survey of about 2,000 consumers which asks respondents to rate the relative level of past and future economic conditions.
08:15 CHF Employment Level 4.03M 4.02M
The Employment Level measures the number of people employed during the previous quarter. Job creation is an important indicator of consumer spending.
A higher than expected reading should be taken as positive/bullish for the CHF, while a lower than expected reading should be taken as negative/bearish for the CHF.
Tent CHF SNB Board Member Jordan Speaks
Swiss National Bank (SNB) Vice Chairman (May 2007 – January 2012) Thomas Jordan is to speak. In January 2010 his title changed from Board Member to Vice Chairman. As a member of the SNB’s Governing Board, which sets short term interest rates, he has a major influence over the value of the Swiss franc. Traders watch his speeches closely as they are often used to drop subtle hints regarding future monetary policy and interest rate shifts.
11:00 GBP CBI Distributive Trades Survey -14 -22
The Confederation of British Industry (CBI) Distributive Trades Survey (DTS) measures the health of the retail sector. The reading is compiled from a survey covering 20,000 firms responsible for 40% of employment in retailing. It includes measures of sales activity across the distributive trades. It is a leading indicator of consumer spending. The figure is the difference between the percentage of retailers reporting an increase in sales and those reporting a decrease.
Tent EUR German CPI (MoM) 0.5% -0.4%
The German Consumer Price Index (CPI) measures the changes in the price of goods and services purchased by consumers.
13:30 USD Core Durable Goods Orders (MoM) 0.0% 2.2%
13:30 USD Durable Goods Orders (MoM) -0.8% 3.0%
Durable Goods Orders measures the change in the total value of new orders for long lasting manufactured goods, including transportation items.
A higher than expected reading should be taken as positive/bullish for the USD, while a lower than expected reading should be taken as negative/bearish for the USD.
15:00 USD CB Consumer Confidence 63.0 61.1
Conference Board (CB) Consumer Confidence measures the level of consumer confidence in economic activity. It is a leading indicator as it can predict consumer spending, which plays a major role in overall economic activity. Higher readings point to higher consumer optimism.
Feb 27
Long Term=Up
Medium Term=Up
Intermediate Term=Up
Short Term =Bullish.
Any move next week above last week’s high favors the trend up to remain in place until March. Mid Week Wednesday is the last trading day of the month. We need to close above 1767 to keep the upside rally build up in confirmation mode.
Support and Resistance for Monday
Initial Resistance for 1783-1793 and 2nd tier 1804-1808
Initial Support 1759-1765 and 2nd tier 1744-1752
What Next?
Support and Resistance for Monday
Initial Resistance for 1783-1793 and 2nd tier 1804-1808
Initial Support 1759-1765 and 2nd tier 1744-1752
What Next?
A small pullback is in play since Thursday and might continue into Monday. The end of the month on mid week Wednesday is the most important point for the week as is the 1767 and 1804 price points. One of those two prices should be in play on Wednesday. It’s not guaranteed, but it won’t surprise me one bit if we’re at one of those two prices.
The price pattern remains bullish, but last week was a Fibonacci 8th week since the lows so I’d really like to see a new high this week.
The price pattern remains bullish, but last week was a Fibonacci 8th week since the lows so I’d really like to see a new high this week.
The market is a bit uncertain at this point as it is overbought and 1800 is now visible in the distance and traders are starting the week with a lot of things to be considered. Monday is a tough call and I suspect it will churn around the 1770’s area with slight probes on either side.
Bottom Line
Price is at major resistance on the channel lines and since they are such important and long term lines, we have to be real careful here. The chart shows Fibonacci 8 weeks up and a new price high would really help out the analyses. This 1774 area is an important one because it’s measured from a deep price low.
It’s possible we spend a few days range bound in the --1761-1767 to the 1790-1804 zones. Until we see weakness, the trend remains up---but this midway channel and price point is the biggest one. It’s yet another chart that shows hardly any resistance after this point. A final thought. The upper portion of this channel has only ever been breached twice and that was during the final 5 weeks of the rally and the November failure at 1804. So for now, it remains “deep waters” and I’m on the edge at this price point. The chart is right on the midway dotted line and the RED ARC.
For everything that gold has done to get here, this yellow zone is the final hurdle. Its importance can be best described when I say either this channel line or the upper one is where this year’s price high is most likely to occur. So it’s critical here. These resistance points don’t usually yield easily. Of all the resistance points and lines, this one is the most important. Silver just got above its most important line (long term blue line) and now gold is at the door. The pros know it and so does everyone else. Monday is probably a range bound day.
It’s possible we spend a few days range bound in the --1761-1767 to the 1790-1804 zones. Until we see weakness, the trend remains up---but this midway channel and price point is the biggest one. It’s yet another chart that shows hardly any resistance after this point. A final thought. The upper portion of this channel has only ever been breached twice and that was during the final 5 weeks of the rally and the November failure at 1804. So for now, it remains “deep waters” and I’m on the edge at this price point. The chart is right on the midway dotted line and the RED ARC.
For everything that gold has done to get here, this yellow zone is the final hurdle. Its importance can be best described when I say either this channel line or the upper one is where this year’s price high is most likely to occur. So it’s critical here. These resistance points don’t usually yield easily. Of all the resistance points and lines, this one is the most important. Silver just got above its most important line (long term blue line) and now gold is at the door. The pros know it and so does everyone else. Monday is probably a range bound day.
Ok looking at this, putting it simply, gold is not in the buy zone, so any orders to go long or to buy gold will have to wait until it crosses above the black line, chances are higher that gold will fall (unless something fundamental happens). The potential maximum drop for the short term will be until the purple line.
February 27 – March 02, 2012
Gold weekly Update
Long Term – Up -But arriving at major resistance point.
Medium Term – Neutral/Bullish
Intermediate term - Up (But needs to remain above 1720-1730)
Short Term – Bullish – the short term cycle upturn from last week played out. The trend is up.
Resistance for this week 1796-1806 /2nd 1819-1829
Support for this week 1742-1755 /2nd tier 1715-1725
Medium Term – Neutral/Bullish
Intermediate term - Up (But needs to remain above 1720-1730)
Short Term – Bullish – the short term cycle upturn from last week played out. The trend is up.
Resistance for this week 1796-1806 /2nd 1819-1829
Support for this week 1742-1755 /2nd tier 1715-1725
Last week's listed resistance levels were tight due to the two weeks of the trading range and the price high took out both initial and 2nd tier coming in at 1788. The 1771 close on GLOBEX was 4 dollars above the magic 1767 number. Support was listed at 1701-1725 and the low was 1725 (all prices Spot Gold).
What happened with Gold last week?
Everything was in place for gold to move higher and it took advantage of the situation. There is so much going on that is gold bullish and we don’t want to rehash that. But specifically last week, gold’s character resumed its upside impulsive over tones. We speculate that the key factor is the story below:
When a default is not termed a default, it is not ‘the fault’ of anyone (my title)(www.zerohedge.com)
MF Global was a major global financial derivatives broker until it met its unseemly demise on October 30, 2011, when it filed the eighth-largest U.S. bankruptcy after reporting a “material shortfall” of hundreds of millions of dollars in segregated customer funds. The brokerage used a large number of complex and controversial repurchase agreements, or "repos," for funding and for leveraging profit. Among its losing bets was something described as a wrong-way $6.3 billion trade the brokerage made on its own behalf on bonds of some of Europe’s most indebted nations.
Avizius writes: WHY MF GLOBAL FAILED --- THE default – was not labeled a DEFAULT– so MF Global’s insurance didn’t cover the loss.
In agreement was reached in Europe that investors would have to take a write-down of 50% on Greek Bond debt. Now MF Global was leveraged anywhere from 40 to 1, to 80 to 1 depending on whose figures you believe. Let’s assume that MF Global was leveraged 40 to 1, this means that they could not even absorb a small 3% loss, so when the “haircut” of 50% was agreed to, MF Global was finished. It tried to stem its losses by criminally dipping into segregated client accounts, and we all know how that ended with clients losing their money.
However, MF Global thought that they had risk-free speculation because they had bought these CDS from these big banks to protect themselves in case their bets on European Debt went bad. MF Global should have been protected by its CDS, but since the ISDA would not declare the Greek “credit event” to be a default, MF Global could not cover its losses, causing its collapse.
The house won because it was able to define what “winning” was.
If DTCC’s analysis is correct, the CDS market for Greek debt would not much magnify the consequences of a Greek default unless it stimulated contagion that affected other European countries.
It is the “contagion,” however, that seems to be the concern. Players who have hedged their bets by betting both ways cannot collect on their winning bets; and that means they cannot afford to pay their losing bets, causing other players to also default on their bets. The dominoes go down in a cascade of cross-defaults that infects the whole banking industry and jeopardizes the global pyramid scheme. The potential for this sort of nuclear reaction was what prompted billionaire investor Warren Buffett to call derivatives “weapons of financial mass destruction.” It is also why the banking system cannot let a major derivatives player such as Bear Stearns or Lehman Brothers go down. What is in jeopardy is the derivatives scheme itself.
As MF Global found out the hard way, there is no such thing as “risk-free speculation” protected with derivatives.
My own view of the situation is that each time there is more approval for debt bailouts, gold rallies. Whenever there is a hint of sea change where the next debt payment (March 10th I think for Greece) becomes in danger of not being funded, Gold starts pulling back. That’s what we need to watch for.
When a default is not termed a default, it is not ‘the fault’ of anyone (my title)(www.zerohedge.com)
MF Global was a major global financial derivatives broker until it met its unseemly demise on October 30, 2011, when it filed the eighth-largest U.S. bankruptcy after reporting a “material shortfall” of hundreds of millions of dollars in segregated customer funds. The brokerage used a large number of complex and controversial repurchase agreements, or "repos," for funding and for leveraging profit. Among its losing bets was something described as a wrong-way $6.3 billion trade the brokerage made on its own behalf on bonds of some of Europe’s most indebted nations.
Avizius writes: WHY MF GLOBAL FAILED --- THE default – was not labeled a DEFAULT– so MF Global’s insurance didn’t cover the loss.
In agreement was reached in Europe that investors would have to take a write-down of 50% on Greek Bond debt. Now MF Global was leveraged anywhere from 40 to 1, to 80 to 1 depending on whose figures you believe. Let’s assume that MF Global was leveraged 40 to 1, this means that they could not even absorb a small 3% loss, so when the “haircut” of 50% was agreed to, MF Global was finished. It tried to stem its losses by criminally dipping into segregated client accounts, and we all know how that ended with clients losing their money.
However, MF Global thought that they had risk-free speculation because they had bought these CDS from these big banks to protect themselves in case their bets on European Debt went bad. MF Global should have been protected by its CDS, but since the ISDA would not declare the Greek “credit event” to be a default, MF Global could not cover its losses, causing its collapse.
The house won because it was able to define what “winning” was.
If DTCC’s analysis is correct, the CDS market for Greek debt would not much magnify the consequences of a Greek default unless it stimulated contagion that affected other European countries.
It is the “contagion,” however, that seems to be the concern. Players who have hedged their bets by betting both ways cannot collect on their winning bets; and that means they cannot afford to pay their losing bets, causing other players to also default on their bets. The dominoes go down in a cascade of cross-defaults that infects the whole banking industry and jeopardizes the global pyramid scheme. The potential for this sort of nuclear reaction was what prompted billionaire investor Warren Buffett to call derivatives “weapons of financial mass destruction.” It is also why the banking system cannot let a major derivatives player such as Bear Stearns or Lehman Brothers go down. What is in jeopardy is the derivatives scheme itself.
As MF Global found out the hard way, there is no such thing as “risk-free speculation” protected with derivatives.
My own view of the situation is that each time there is more approval for debt bailouts, gold rallies. Whenever there is a hint of sea change where the next debt payment (March 10th I think for Greece) becomes in danger of not being funded, Gold starts pulling back. That’s what we need to watch for.
Recap/Outlook - the “Numbers” to watch in gold
Last week’s analysis that the price pattern was exhibiting underlying strength and had impulsive (bullish) characteristics paid off as prices did everything they had to in order to continue its uptrend and price overcame the 1755-1767 area and rallied to 1788 before a Friday afternoon pullback. On the trader side of the website, longs were established at 1722, 1728 and 1736.50 in April Gold and 34.55 in March Silver. (2 of the 3 gold’s were sold)
The close above the December high print price of 1767 was important. If price can close above that area on the 29th – it will add another notch for upside price appreciation.
The other number we’re watching for is a monthly close above 1804, which would favor the 1522 price low is in place and the market should see new highs.
The close above the December high print price of 1767 was important. If price can close above that area on the 29th – it will add another notch for upside price appreciation.
The other number we’re watching for is a monthly close above 1804, which would favor the 1522 price low is in place and the market should see new highs.
THERE ARE NO NUMBERS MORE IMPORTANT than 1767 and 1804 on the upside. The reason I still mention 1767 as we have closed above it is that it still must close above it on a monthly basis.
These are the key numbers to focus on that is currently most important to price on the upside.
Last Week
Short term cycles were due and favored to turn up and the market cooperated fully all week long as the price pattern continued to look impulsive (bullish). Silver also broke out of its drawn out trading range as the 34 dollar price area was finally over come. Our speculation that the March Futures Options expiration on the 23rd was the “fundamental” reason why price was not rising was (as far as I’m concerned) confirmed when price made its move above 34 and rallied to 35.50 to end the week. To believe there was nothing funny going on, you have to believe that price just happened to stay at 34 for three weeks while the options contract with the biggest open interest just happens to expire before that price area is taken out.
I have a theory on why the CFTC is allowing this type of manipulation but I don’t have time to get into it on this report. It’s highly speculative, but suffices to say that I believe that gold and silver are manipulated for reasons of national security and since it is covered by national security, no one is allowed to discuss the program. I’ll have more to say in a separate update.
In summary, the latest ECB ability to switch over and become a printing press like the USA Fed went thru the commodity markets and with the addition of the Iran situation, Crude oil has exploded higher. While the “news” that crude is rallying due to Iran has some truth, my speculation is that there are much darker forces working the crude oil situation and that is the “petro-dollar.” While the domestic US dollar is going down gradually, and in fact, has actually moved higher over the past 3 or 4 months, the international US dollar, the “petro-dollar” is being devalued via Crude Oil. Indeed the roots of the US currency being the reserve for the world have its real backing in “oil” more than the guarantee of the US government.
When the gold standard was cancelled in 1971, the world leaders gathered and moved towards a plan to introduce the SDR (Special Drawing Right) quasi-currency to replace the US dollar. But USA and the Saudi’s made an under the table deal in which the Saudi’s announced that the trading and buying of oil would only be transacted in US currency. There’s a lot more to the story, which I’ve gone thru in the past, but this is yet another way that the US Dollar is being GLOBALLY devalued through commodity pricing. While inflation is apparent in USA, the financial world in a macabre way, continue to ignore the formula’s used to show that everything’s fine.
I have a theory on why the CFTC is allowing this type of manipulation but I don’t have time to get into it on this report. It’s highly speculative, but suffices to say that I believe that gold and silver are manipulated for reasons of national security and since it is covered by national security, no one is allowed to discuss the program. I’ll have more to say in a separate update.
In summary, the latest ECB ability to switch over and become a printing press like the USA Fed went thru the commodity markets and with the addition of the Iran situation, Crude oil has exploded higher. While the “news” that crude is rallying due to Iran has some truth, my speculation is that there are much darker forces working the crude oil situation and that is the “petro-dollar.” While the domestic US dollar is going down gradually, and in fact, has actually moved higher over the past 3 or 4 months, the international US dollar, the “petro-dollar” is being devalued via Crude Oil. Indeed the roots of the US currency being the reserve for the world have its real backing in “oil” more than the guarantee of the US government.
When the gold standard was cancelled in 1971, the world leaders gathered and moved towards a plan to introduce the SDR (Special Drawing Right) quasi-currency to replace the US dollar. But USA and the Saudi’s made an under the table deal in which the Saudi’s announced that the trading and buying of oil would only be transacted in US currency. There’s a lot more to the story, which I’ve gone thru in the past, but this is yet another way that the US Dollar is being GLOBALLY devalued through commodity pricing. While inflation is apparent in USA, the financial world in a macabre way, continue to ignore the formula’s used to show that everything’s fine.
For the coming week
the short term cycle turn is in play. A new high this coming week would favor the rally to last into the March 4th-10th timeframe. The channel line on this week’s chart suggests that the 1825 area should be key resistance if we get above 1804. Thus the 1800-1825 area is where price peak is most favored this week. With the red channel line on the chart below at 1825, that is the area we think prices are going run into resistance this coming week. So a better way of looking at it would be two price points to watch for this coming week---the 1796-1805 area or the 1819-1829 area.
The action on the daily chart is important at the 1705-1715 area. That’s where weekly/monthly price support has been established. So it’s key to hold that area on an intermediate level. As far as the downside for this coming week, the middle red channel line at the 1745-1765 area is where we should look for the lows of the coming week should there be a pullback. The thing to keep note on the middle channel line is that by week’s end that support will have grown to the 1765.
The action on the daily chart is important at the 1705-1715 area. That’s where weekly/monthly price support has been established. So it’s key to hold that area on an intermediate level. As far as the downside for this coming week, the middle red channel line at the 1745-1765 area is where we should look for the lows of the coming week should there be a pullback. The thing to keep note on the middle channel line is that by week’s end that support will have grown to the 1765.
Next week is a month ending week and monthly closes are very important. Now that we have exceeded the December high, we need to follow through and close above it. It wouldn’t surprise me to see us trading near 1767 come the 29th. We shall see. If things continue to play out this coming week, the scenario is for a move to 1800-1825 on the upside and the low near the 1750-1765 area. With the strength in this pattern, price has no business below the middle red channel line on a closing basis. There is a minor cycle that can afford a pullback or sideways action into mid week. The perfect scenario for cycles would be for gold to pullback into late Monday and/or Tuesday morning and then begin the next leg of this short term rally into the March 4th-10th time period.
On the Upside---First price resistance for the week 1796-1806 area and then the 1819-1829 zone.
Those are the key upside ranges for the coming week. Odds favor one of those two areas as this week’s high point. Any new high this week increases the odds significantly that overall short term upside will continue for this coming week.
On the Downside---Monthly support was established when repeated attempts to break below 1715 two weeks ago failed. The 1700-1715 area is current support to the rally.
Those looking to jump on the long bandwagon should look at the 1745-1760 area on pullbacks. With this much strength, shorting is not recommended at the moment. Long term investors should continue to save and be patient until a pullback such as in 2011 developed. Buying at the bottom of channel lines and at the 34 week moving average is a good way to accumulate.
The long term view using the Gold ETF (GLD) again shows the key action between the white and green trend line. The reason it is so important is the white channel line is from 2005 and the green channel line from 2008. While they are not long term channel lines, they are let’s say, old medium term channels.
A monthly close above this middle green channel line will favor new all time highs. Initial targets will be the 2130 dollar area in gold and the 208 area in GLD. On the downside, we have the white channel line and the 34 week moving average. As long as we are above that price point on a weekly and monthly closing basis, the medium term trend is up. As long as we are inside the green channel lines, the long term trend is up. In summary, price is certainly up against the biggest resistance on either side of 300 dollars. THIS IS THE SPOT WHERE GLD DECIDES WHICH SIDE OF THE CHANNEL it will trade on. Whatever way gold goes, we follow it off this green channel line. One final thought. This area is one of two price points where a high for the year can develop. Keep that in mind. The other potential high point for the year, is the upper channel line. Thus, if your overloaded, with lots of profits, this is one area where profit taking on the long term (for a bit of your hoard) is a consideration.
Those are the key upside ranges for the coming week. Odds favor one of those two areas as this week’s high point. Any new high this week increases the odds significantly that overall short term upside will continue for this coming week.
On the Downside---Monthly support was established when repeated attempts to break below 1715 two weeks ago failed. The 1700-1715 area is current support to the rally.
Those looking to jump on the long bandwagon should look at the 1745-1760 area on pullbacks. With this much strength, shorting is not recommended at the moment. Long term investors should continue to save and be patient until a pullback such as in 2011 developed. Buying at the bottom of channel lines and at the 34 week moving average is a good way to accumulate.
Long Term – Up (at important resistance)
The long term view using the Gold ETF (GLD) again shows the key action between the white and green trend line. The reason it is so important is the white channel line is from 2005 and the green channel line from 2008. While they are not long term channel lines, they are let’s say, old medium term channels.
A monthly close above this middle green channel line will favor new all time highs. Initial targets will be the 2130 dollar area in gold and the 208 area in GLD. On the downside, we have the white channel line and the 34 week moving average. As long as we are above that price point on a weekly and monthly closing basis, the medium term trend is up. As long as we are inside the green channel lines, the long term trend is up. In summary, price is certainly up against the biggest resistance on either side of 300 dollars. THIS IS THE SPOT WHERE GLD DECIDES WHICH SIDE OF THE CHANNEL it will trade on. Whatever way gold goes, we follow it off this green channel line. One final thought. This area is one of two price points where a high for the year can develop. Keep that in mind. The other potential high point for the year, is the upper channel line. Thus, if your overloaded, with lots of profits, this is one area where profit taking on the long term (for a bit of your hoard) is a consideration.
From a trend standpoint, gold is in the middle of the major uptrend channel and long term investors and players should be comfortable with their current positions but should consider the following:
This point or channel line is one of the TWO PLACES WHERE A HIGH FOR THE YEAR is most likely to take place. It’s either this channel line or the upper green channel line that best favors a yearly high. That upper line extends to 208 in GLD and 2130 in spot gold.
My own preference is that the upper one is favored, but this is the other area that is a candidate. Thus, if you’re looking for an exit this year or a hedge against inventory, or orders---for whatever reason, this is one of the two spots for consideration.
Medium Term -Up
The medium term is perhaps the most interesting time frame right now for a couple of reasons. First is that the 26 week cycle seems to have come into play. Since the last cycle was high (August 22nd), this current cycle, although we saw the actual low on December 29th, the cycle itself is just starting. This current up and down motion in February on the chart is the next 26 week cycle establishing its base from which to establish trend.
The chart below is an Elliot Wave look at the current gold set up by Art Roldan showing us the current wave count on his preferred pattern. This is an excellent time for Art to provide us with the wave count as the potential for the famous “wave 3rd of the 3rd”is potentially in play and is the favored count of well known analyst, Alf Fields. If we are in the “3rd of the 3rd” it is going to be the point where the strongest move of the entire bull market will take place.
The current count on the chart above has the wave just starting and this most recent move from the December low is part of wave 1. Inside that wave are 5 smaller waves and so on. The best read at the moment is we are in the first wave of five waves up with an initial target of the 1875 area for this first wave. It fits in nicely with the Gann overlay as well, showing the top where the Green arc resides. The current wave point favors a small pullback toward 1750 and then another thrust up towards 1825-1850 into the first week of March. With the “look” we have from the December low, the price pattern looks impulsive and is favored higher into March.We’re still on alert for a seasonal peak and pullback. There was no price weakness last week, and the next target date is now the week of March 7th.
Euro and the strong rally last week
The chart below of the Euro was first posted a couple of months ago. We speculated then and ask the question again---is the Euro making a head and shoulder long term bottom? While many are calling the death of the Euro a certainty, the CHART and PRICE is not acting that way. If Greece were to leave the Euro Union, it might be the best thing that could happen for the Euro. Price is arriving at the first real test for the euro, the 136-138 area where these channel lines reside and the medium term moving averages.
In summary, the Euro is entering the “TEST” area on the charts. Any push above 135 favors a test of that 136-138 area. For all the hoopla that has happened, the Euro and the US Dollar area unchanged over the past year. The real issue is they are both losing value at just about the same rate. The potential grows that the Euro has made an important bottom for this year. Odds favor a test of the 34 week moving averages in the 136-138 area
In summary, the Euro is entering the “TEST” area on the charts. Any push above 135 favors a test of that 136-138 area. For all the hoopla that has happened, the Euro and the US Dollar area unchanged over the past year. The real issue is they are both losing value at just about the same rate. The potential grows that the Euro has made an important bottom for this year. Odds favor a test of the 34 week moving averages in the 136-138 area
Going to the gold charts
the center of attraction chart we’ve been observing broke to the upside and this week’s highs has reached a double channel line junction. The suspected pattern we favored was a “flag” (bullish pattern) and this week’s breakout to the upside confirmed it as the most likely outcome that has developed. The close above 1767 gives it a lot of credibility. If it’s a bull flag, we‘ve got higher to go, but we must break above these final trend lines in the coming week This set of channel lines are the last long term channels of importance until the 2100 dollar area. A monthly close above these levels should keep the velocity we saw the first six weeks of the year intact.
It is possible we’ll see a few days of pullback next week. We’re kind of mixed as to whether it happens the first two days of the week or the last two. Either way, we still think the upside has the advantage, but will wait to uncork the champagne until these last two resistance lines are taken out. In summary, the trends remain up, and gold has got one more set of channels to overcome for the upside and then to make them support on pullbacks. The current resistance areas are the final long term channel lines before the 2100 area.
The Center of Attraction Point
The zoom in for the center of attraction point shows after almost a month of price action, the upside move last week took us out of a trading range and above the 1744 PIVOT POINT into the upside quadrant of the channel. The bull flag gains credibility and the VELOCITY of the move out of the trading range suggests the impulsive look we speculated on last week is again exhibiting the same type of action---and that favors higher.
How much higher?
COA Projection
The chart below shows the current uptrend and the red highlighted portion of the chart shows the current single reflection projected price pattern for the short term future. It is an extrapolation of the current trend and therefore, should not be taken as a definitive outcome. Any weekly close below 1740 would eliminate the current pattern outlook. For now, the uptrend remains in place. If we get a contra seasonal move in gold and the current momentum continues, then price favors a continued move in this fashion.
Price levels to watch
PRICE LEVEL ONE -- 1767
The Dec 1767 high has been exceeded. We’d like to see price close above that area on the 29th (last day of February). A second weekly close (this week) would substantially increase the upside potential.
PRICE LEVEL TWO - 1804
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.
The Dec 1767 high has been exceeded. We’d like to see price close above that area on the 29th (last day of February). A second weekly close (this week) would substantially increase the upside potential.
PRICE LEVEL TWO - 1804
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.
Bottom Line
The rally from the December low is due for a seasonal peak. The next time frame to be on guard for is the week of March 7th.
All long term trends remain up for gold. Price is at its final long term resistance channel line on the chart. For long term players, there is a price consideration here. It is most important to keep in mind that the 2012 price high favors either this channel line or the one above it as this year’s high. Thus the price points for the most likely high this year is the 1800-1868 area or the 2100-2200 area. Investors who are looking to take long term profits or to scale back should consider these two channel lines as the most likely points.
Watch for the closing monthly price on the 29th. We want to close above 1767 to get that price point out of the way. For now we favor higher. The chart after this one below is the Thompson's Commodity Index. That chart too is at a key price area. Most charts are at key channel lines, so the next few weeks will be important in most markets. If gold makes it above these final lines of resistance, then we should see new highs down the road a bit.
Economic Events: (GMT)
It is a very busy week with economic events combining the end and the beginning of a month.
Please see the daily fundamental forecasts for details on each of these events.
Below are the only major events of the week.
The G20 Summit is taking place in Mexico this week.
| Feb. 27 | 15:00 | USD | Pending Home Sales (MoM) | |||||||||||
| Feb. 28 | 13:30 | USD | Core Durable Goods Orders (MoM) | |||||||||||
| 13:30 | USD | Durable Goods Orders (MoM) | ||||||||||||
| 15:00 | USD | CB Consumer Confidence | ||||||||||||
| 19:00 | USD | Beige Book | ||||||||||||
| Feb. 29 | 13:30 | USD | GDP Price Index (QoQ) | |||||||||||
| 13:30 | USD | GDP (QoQ) | ||||||||||||
| 14:45 | USD | Chicago PMI | ||||||||||||
| 15:00 | USD | Fed Chairman Bernanke Testifies | ||||||||||||
| Mar. 01 | 13:30 | USD | Core PCE Price Index (MoM) | |||||||||||
| 13:30 | USD | Personal Spending (MoM) | ||||||||||||
| 13:30 | USD | Initial Jobless Claims | ||||||||||||
| 13:30 | USD | Continuing Jobless Claims | ||||||||||||
| 15:00 | USD | ISM Manufacturing Index | ||||||||||||
| 15:00 | USD | Fed Chairman Bernanke Testifies |
Monday, kicks off the week in Australia where the Labor Party will have the option to select a new leader after Prime Minister Julia Gillard announced a spill of the party due to ongoing tension between her and recently-departed Foreign Minister Kevin Rudd.
In the UK, January mortgage approvals data will be released, as well as the CBI distributive trades survey for February.
European Monetary Union money supply data for January will also be announced.
European Council president Jose Barroso speaks on the future of the European Union.
European Union competition commissioner Joaquín Almunia will appear before the European Parliament's internal market and consumer protection committee. He will appear again on Tuesday.
US pending home sales index for January will be released, alongside the Dallas Federal Reserve manufacturing survey.
Tuesday sees the release of February consumer confidence data in the US, alongside figures on durable goods orders for January.
Analysts expect orders to have fallen 0.5 per cent in the month, while consumer confidence may have risen two points to 63.1.
The S&P Case Shiller home price index will also be released, and is expected to show a 0.2 per cent fall in prices during the month of December.
The Greek parliament will hold its vote on the second bailout granted to the country by the EU.
European Council President Barroso will address an EU conference.
Bank of England deputy governor Paul Tucker is due to talk at the British society of business economists annual dinner.
Wednesday the markets will be focused on the much anticipated US gross domestic product data for the December quarter released in the US. Analysts are expecting the figures to confirm annualized growth figures of 2.8 per cent.
The US government's Beige Book will also be released, its report on the country's current economic situation.
In Australia the ABS will release retail trade data for January, as well as December quarter construction work figures.
Economists are tipping retail sales to have risen 0.5 per cent in the month, while a 1 per cent fall in construction activity is predicted.
January private sector credit data will also be released. Analysts expect the data to show a 0.3 per cent rise.
Rounding off a big day, the Australian Industry Group will release manufacturing index data.
The Chicago purchasing managers index figures and the weekly Energy Information Association petroleum status report will be released.
In the UK, GfK is due to release consumer confidence data for February.
January consumer credit for January is on tap, along with December quarter M4 money supply data.
Cleveland Federal Reserve president Sandra Pianalto will speak on the prospects for the US economy in the US.
EU internal market and services commissioner Michel Barnier will address a conference in Europe on the credibility of European governance.
In the US, Federal Reserve chairman Ben Bernanke will deliver his semi-annual monetary policy report.
Dallas Federal Reserve president Richard Fisher will give a speech on the US economy.
Philadelphia Federal Reserve president Charles Plosser will also speak.
Rounding off a busy Wednesday, the EU is due to release advice on potential competition and capital rules for trade settlement in the region.
Thursday in the US.car sales data and construction spending figures will be released along with jobless claims data and the ISM manufacturing index for February is on tap. The index is tipped to show a reading of around 55, indicating ongoing expansion.
Personal income and outlays figures will also be released. Economists are tipping the figures to show a 0.5 per cent rise in incomes and a 0.4 per cent lift in spending.
EU leaders will kick off a two day economic summit in Europe. Before the event, EU conservative leaders will hold a pre-summit meeting.
European commissioner for economic and monetary affairs Olli Rehn will deliver an address to the CEPS.
Atlanta Federal Reserve president Dennis Lockhart will speak on the US economy and banking.
Friday brings Greece back into focus with the Greek gross domestic product data which will be heavily monitored in the wake of the approval of its second EU bailout.
US Federal Reserve president James Bullard will deliver an address on the US economy in the aftermath of the financial crisis.
Analysis and Recommendations:
Gold has skyrocketed this week hitting a 3 month high of 1787.95 and is currently trading at 1773.55.
Gold fell on the weakness of the USD and on geopolitical worries over Iran and also on the rise of Crude Oil. Investors moved toward the end of the week to more risky securities and also profit taking pulled the price down somewhat after it climbed from a low of 1754. earlier in the week.
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.
