Wednesday, January 21, 2015

Gold Trend Jan 22, 2015

Long Term ~ Bearish-Need a monthly close above 1800 to confirm the bull market
 final phase underway. Need a monthly close above 1560 to neutralize the trend.
Medium Term ~ Bearish– Gold needs to close above 1272 on a weekly and 
monthly basis to neutralize the downtrend. Gold price has arrived at 
the medium term moving averages (1245-1262)
Intermediate Term ~ Bullish– Resistance is 1312 and 1322.
Short Term ~ Bullish- Odds favor a pullback should be developing

Initial Resistance 1302-1312 2nd tier 1322-1326
Initial Support 1272-1282 2nd tier 1238-1242

The last update listed 1296-1306 as resistance and the high was 1396. 
Support was listed 1272-1282 and the low was 1284.50

The Currency wars are well under way --- and the panic is beginning in the coming sovereign debt market default that is going to transform life as we know it. The real bubble that bursts will be the bond markets of the world.

Kaisa Default Contagion: China's $245bn Corporate Bond Market "Is Too Complacent"
Submitted by Tyler Durden on 01/21/2015

As we detailed previously, the first USD-denominated Chinese corporate bond default last week - of developer Kaisa Group - signals considerably deeper problems in China's economy as one manager noted, "everyone is rethinking risk right now." As Bloomberg reports, Chinese companies comprised 62% of all U.S. dollar bond sales in the Asia-Pacific region ex Japan last year, issuing $244.4 billion and that huge (and illiquid) market "has been too complacent," according to one credit strategist who warned, investors would be “rational to adopt a cautious approach in view of the fact that anything can happen, anywhere, anytime. It would be irrational to continue thinking that after Kaisa none of the companies will see a similar fate."

If it’s Thursday………………It must be ECB QE Decision Day

Panmure: Draghi's QE Will Fail, 2015 Will Be The Year Of "The Great Unwinding"
Submitted by Tyler Durden on 01/21/2015

As everyone knows by now, tomorrow the ECB will announce a QE plan that monetizes some €50 billion (and maybe more) in European government bonds per month, although Greece may be left out in the cold. It is also the reason why while European stocks have priced in more than 100% of the full impact of a €1 trillion QE, those gains are about to be wiped out. Here's why according to Panmure Gordon.
From the Panmure note:
While the impact on European equity markets to be positive in the short-term,
 3 things will eventually curtail positive impact:
•Disunity among euro zone politicians
•Greek election on Jan. 25
•Restrictions on range of assets ECB can buy
And here is what we have said from the very beginning about not only European but US QE: Panmure says €1 trillion in QE from ECB doesn’t do much except buy time for politicians. Which is absolutely spot on and was exemplified by the infamous Schumer outburst to Bernanke: "Get to work Mr. Chairman."
Panmure adds that Europe must increase economic/political convergence and structural reforms or face threat of “persistent existential crisis." This happens at a time when the greater union has rarely appeared less attractive to voters.
That means euro is now an "unsustainable currency peg" for its members, adding that the Euro is also the biggest threat to U.K. growth in 2015
And the report's conclusion: "With euro firmly “in the crosshairs” 2015 is shaping up as the Great Unwinding."

Short Term Gold
Last night we looked at the downtrend line from 2014 where price has broken above and tonight we’ll look just at the uptrend that began since November.

We have reached the last level of resistance before 1322. Any close above 1295 would keeps the rally alive. It comes down to whether gold can close below the upper thick blue dotted trend line and the 1272 level. Until we do that, the trend remains up, but this area is an odds favored place to pullback from.
The breakout above the 2014 downtrend line now points to a move to upper resistance near 1322 on any close above 1295. We could well see that area before we even get the close above 1295. All eyes are on the ECB now and the US Fomc meeting will be Next week along with Options expiration. Support is now 1265-1272 and then 1255. Monthly support is 1222 and any pullback to that region should be strong support in Jan/February. Resistance is 1296-1304 and 1322-1326.
The key now is holding a Friday close above 1217-1222. As long as that is in play the trend remains up on an intermediate term. On the short term, a close below 1268 would neutralize the uptrend but it takes a close below 1247 to go short term bearish.
Support should be strong in the 1250-1260 area.

gold hourly price chart

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 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. 
 King Regards