Tuesday, February 24, 2015

Gold Trend Feb 25, 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 ~ Neutral– Gold has been upgraded to neutral, but just barely. 
A close below 1222 in February returns gold to bearish.
Intermediate Term ~ Bearish– Need close above 120 in GOLD ETF GLD to neutralize the downtrend.
Short Term ~ Bearish- A close above 1222 neutralizes the downtrend.

Initial Resistance 1210-1215 2nd tier 1218-1223
Support 1188-1194 2nd tier 1167-1172

The last update listed resistance at 1207-1214 and the high was 1204. 
Support was listed at 1188-1194 and the low was 1190.

The Chinese New Year celebrations are over and the markets reopen on Wednesday. 
It will be key to see how they act coming out of the box.
Janet Yellen completed the first of a two day testimony for US Congress without any major glitches. The bottom line has to be the concern for the US dollar and its explosive move higher. She will most likely “kick the can” and will stick to her policy that will suggest tightening but she will also leave it open that they are not ready to raise rates yet. Her most important line on Tuesday pretty much summed it up ……..”on the one hand………………..but on the other hand.”

Next comes the Wednesday testimony. I don’t think the Fed (or the world or Congress or anyone for that matter) wants a higher US dollar.
If anyone would have told you that a strong US dollar would be the 2015 concern last year at this time you would have thrown them out the window. There are a few exceptions and GoldTrends did turn bullish on the Dollar in the May/June time period and the medium term trend (although at resistance) has been bullish since then.
And that’s what it comes down to. Will the Fed try and contain the dollar here?
The problem is they don’t want the STOCK MARKET GOING HIGHER EITHER !!! Even they realize that they either try and stop it here or face a bubble in stocks.
The problem with that is the real bubble is the bond market and when that goes, the escalation of the debt crisis will get serious.
To give you an idea of how much is going on right now, I post the headlines for just one day in Central Bank News.

Gold Commentary

The Upside
The first major trend lines are the 2014 downtrend line and the 2015 uptrend line. As you can see we are at the 2015 uptrend line. Keep in mind that we had a triple bottom low at 1180 broken that was the low for 2013 and 2014. Note how the lower blue 2015 uptrend line is right around this 1180 area. In order for gold to be in any uptrend this line has to be bottom line support. 1180 is where the uptrend for gold ends.

Gold uptrend vs downtrend line Feb 2015

The downside
Under 1180 and we break the 2015 uptrend line and then the 2014 downtrend line comes into play. Right now that is the 1155-1166 area and is descending at the rate of about a dollar a day. If gold can’t hold that downtrend line, and gold will go right back to continuing the downtrend that it has been on since 2011.

Neutral Zone
The 1172 area (plus or minus 5 dollars) is the neutral zone.

In summary, gold is making its decision of whether it remains in an uptrend, or resumes it downtrend.

It all comes down to whether Yellen gets pressured because of the massive rally in the US Dollar and she gets swayed to say she’s still “looking at the numbers” and that the ultimate decision will be based on how things look.

Short Term Gold

It comes down to whether we hold 1188. Any break there and 1167-1172 and/or 1140-1155 will become the next targets and gold will most likely be heading lower into March 5th. It takes a close above 1222 to neutralize the short term downtrend.

As we enter Mid-Week Wednesday, the low has been 1190.61 in spot gold.

Today’s action gave us a double bottom at 1190. We’ve been using 1188 as the “uncle” point as to where gold breaks. That lower red trend line keeps going lower and will be 1180-1184 on Wednesday as support. If we break that line, then gold heads towards 1155-1166 with lower potential.
Gold hourly price chart since the 2015 high at 1307

it’s do or die for gold in the short term. The key now is gold needs to get above the weekly reversal at 1222. For Wednesday, we have 1214 -1222 as resistance points. I still suspect everything is going to be decided on the Yellen testimony. GOLD MUST CLIMB AND CLOSE ABOVE 1222 if the upside action due is going to take place. Until then the downside is still in play.

ONE FINAL POINT: The high on Monday was 1210, Thus 1210-1214 is 1st resistance and then 1218-1225 on Wednesday. Those are the key price points to watch. As long as we are below 1210-1214, it is still possible that gold re-tests the lows on Wednesday. Remember, Yellen is still testifying. If gold does give way to the downside, and we move below 1188 odds would favor 1155-1666 and 1172 as support. Now its up to Yellen/Gold. Get the helmets.

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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