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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– Need a monthly close above 1255 to remove bearish trend.
Intermediate Term ~ Neutral– trading range 1170-1225.
Short Term ~ Neutral– Next short term cycle begins Tuesday/Wednesday into May 3rd.
Price remains in trade range 1175-1225 and waiting for breakout or breakdown.
Initial Resistance 1207-1214 2nd tier 1219-1226
Support 1182-1193 2nd tier 1165-1175
(Reuters) - Equity markets rebounded on Monday after China took steps to stimulate its economy and Wall Street also rose on corporate earnings, while the euro weakened further on worries about Greece.
The Chinese central bank on Sunday cut the amount of cash banks must hold as reserves in its latest attempt to spur lending and combat a slowing economy. The news followed reports last week about a crackdown on margin lending there, which had sent global equity markets lower on Friday.
"It's primarily a snap-back rally from the very bad day Friday," said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia, citing the news out of China and U.S. corporate earnings.
The liquidity squeeze scenario continues to gain traction.
The chart below begs the question…are banks freezing up on lending?
Is this the beginning of another 2008?
Is it possible that there is a derivative melt-down going on in the background on certain banks because of the huge moves we have in Oil, Euro, Swiss Franc de-peg and some institution of fund has been wiped out?
The best evidence we have for a liquidity squeeze is the US Dollar chart.
Price has traded at 100 on three different weeks but so far each time price has been turned down. I can’t see how the Feds (and central banks) can allow the dollar to turn up over this resistance.
Odds favor the central banks must be getting ready to take a stand. The problem is things are blowing up everywhere.
Europe and Greece
Stunned Greeks React To Initial Capital Controls And The "Decree To Confiscate Reserves", And They Are Not Happy
Submitted by Tyler Durden on 04/20/2015
Earlier today, following weeks of speculation, Greece finally launched the first shot across the bow of capital controls, when it decreed that due to an "extremely urgent and unforeseen need" (ironically the need was quite foreseen since about 2010, but that is a different story), it would be "obliged" to transfer - as in confiscate - "idle cash reserves" located across the country's local governments (i.e., various cities and municipalities) to the Greek central bank.
Several hours later the decree which was posted in the government gazette has finally percolated among the population, and the response to what even ordinary Greeks realize is now the endgame, is less than exuberant.
Bloomberg reports, that "as Greece struggles to find cash to stay afloat, local authorities say they oppose a government decision to use their reserves for short-term financing."
Sadly for Greece, this is the only option left as the money has now fully run out: Greek Prime Minister Alexis Tsipras ordered local governments and central government entities to move their cash balances to the central bank for investment in short-term state debt.
Things can get ugly real fast in a situation like this.
(End of Article)
Global commodity prices have fallen sharply since last summer, dragged down by a cocktail of fading Chinese industrial demand, surging supply and a strong USD. Oil has inevitably garnered the majority of headlines but iron ore prices have fallen even further. Iron ore prices have collapsed by close to 50% since last July and over 65% since the beginning of 2014. Falls have accelerated in recent weeks, almost becoming a rout, with prices down over 30% year-to-date.
The other issue is how fast is China slowing?
Perhaps the least skewed indicator is Rail Freight (Year Over Year).
It’s a scary picture to say the least.
So the big question is what is gold going to do? Will it sell-off like it did in 2008 or has it already sold off and is waiting to take center stage?
For gold the chart itself shows how tight and compressed price now is right at a 10 year trend line. With the last 5 monthly price bars touching this line and now compressing like this gives high odds that a 200 dollar decision point is at hand for gold. We need to keep this in mind at all times how important this price area is. That tight monthly range in April has high odds that a move on either side of the line could begin at any time and it should be big.
Gold is now compressed to the 1170-1225 area and a break either higher or lower is about to
In summary, odds are high that something is brewing in the background and while it is possible that the control boys do have one more push lower for gold, it is going to play a huge role when the reset finally arrives.
The next move should resolve pretty soon. Once it does, the trend should become definitive as gold will be heading for 1000-1100 if we lose this trend line on the chart above. If we have any upside left, we need to get weekly closes above 1225, then 1255 then 1272. Until then we should remain extremely cautious that gold (and silver) don’t need much to get pushed off the cliff.
Gold Cycles
The next short term cycle is due April 18th (plus or minus 72 hours). And the “window” for a turn closes after Trade on Tuesday. Thus the next two week cycle begins tomorrow and should last into May 3rd. Because of the tight range gold has not tipped its hand in price which way it’s going to go. Again we believe this is due to situation that is going on at that long term trend line on the first chart. Its not out of the question for gold to remain in this range for another cycle.
We need to break above or below this 1175-1225 trading range.
If we hold the lower dual red support line and the green area of yearly support IN THE 1172-1182 AREA holds and price turns back up and closes above the black dual trend line, we’ll favor that gold is going to move higher. If we don’t pullback and move above the black dual trend line higher first, then we’ll favor a move to the 1225 area and up to 1231 (200 day average) and then we’ll see. If gold can conquer that area, then odds will favor gold moves higher towards 1240-1255.
ANY CLOSE BELOW the dual lower red line and under 1158-1163 will favor a CYCLE inversion and lower prices into the 1st week of May. The 1207-1212 area is resistance and a close above there favors 1225. Support is 1172-1182 and also 1188-1192. Those are the two area’s for a potential low on Tuesday. In summary, the next short term cycle begins now.
Gold TUESDAY
The 1208-1215 area is resistance for Friday and on a weekly basis, the key is whether gold gets above 1225 as it would favor a quick move to the 50 day average at 1234. On the downside, gold is trying to hold the yearly support zone 1172-1182.
Any close below 1192 will favor 1172-1185. That thick 2015 downtrend line is the other area that gold will most likely provide at least INITIAL support should gold lose 1192. If the price of gold moves above 1215 on Friday then 1219-1225 will come into play.
M Samer Al Reifae
Official Representative in Romania at HiWayFX
http://lordoftruth.blogspot.com
samer@hiwayfxglobal.com
+40 734 277 757
Official Representative in Romania at HiWayFX
http://lordoftruth.blogspot.com
samer@hiwayfxglobal.com
+40 734 277 757
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YOU SHOULD NOT TAKE ANY MATERIAL posted on this BLOG AS RECOMMENDATIONS
TO BUY OR SELL GOLD OR ANY OTHER INVESTMENT VEHICLE LISTED.
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.
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
