Tuesday, June 23, 2015

Gold Trend June 24, 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 - Need a monthly close above 1255 and 1255 to remove bearish trend.
Intermediate Term ~ Bearish– Need close above 1222-1232 for higher TREND.
Short Term ~Bearish– caught in a sideways market 1160-1225

Initial Resistance 1188-1198  2nd tier 1202-1209
Support 1162-1172 2nd tier 1156-1164

Our last update listed resistance at 1192-1198 and the high was 1192.  
Support was listed at 1172-1182 and the low was 1176.

One the upside, until we take out 1225 and 1255 we remain in a trade range. 

Gold's Late Summer Rebound Trend
Moving from the long-term bull case for gold to short-term seasonal factors, a new report by Bank of America Merrill Lynch shows that the summer months are usually a great time to buy gold. Since 2001, the report states, bullion has reached a bottom between mid-June and mid-July and rebounded thereafter. From 2001 to 2014, the yellow metal gained 14.9% on average between mid-summer and mid-autumn.
The report is nothing new to gold bugs and followers but it is worth noting.  We have been discussing that a rally could be developing in the June/July period and that this year also points to this being a turn point.
What is important to note is even in the bear market years, we have gotten a rally from June/July to Aug/September.  And that is the difference.  Instead of the rally gaining steam and traction, it fizzle’s out and the bear market resumes.
This year the outlook so far looks the same.  The odds favor we’re getting ready for a rally to begin soon but the question is whether it’s going to fizzle out again or whether it’s going to be real this time and keep going up.
Unfortunately, there are no absolutes in markets and only odds.  
So where are we right now?
The odds favor this current time period is due for a rally.   While the final low could be in place, the odds favor this rally will fizzle out one more time and gold will make one final low before the next bull market wave begins.  However, the move in gold could last 6 to 13 weeks and could get the crowd going again. 
We want to keep in mind that the moving averages of medium term are down to 1201-1209 and that is where the market rally attempt will become important.  Over the past couple of years, the rally has fizzled out each time we have moved above the averages.   
THE KEY WE HAVE NOT SEEN is that the blue moving average has remained below the red average on each of these rally attempts.   And that will be key to watch this time as well.
Gold short term significant levels
As of writing Gold is down to $1,178. A drop below $1,171.90 (low Jun.15) would open the door to $1,162.10 (low Jun.5). On the upside, the immediate resistance lines up at $1,209.00 (high May 25) followed by $1,215.30 (high May 22) and then $1,219.40 (high May 13).
On the medium term, a gold low at the end of June/early July could produce a rally attempt.  This would be in line with the medium term cycle due on June 23rd – July 1st (plus or minus 2 weeks).  The short term cycle is due July 1st (plus or minus 72 hours).  
Overall odds still favor one final low between Sept 2015 – June 2016. However, until we get a weekly close below 1162, a potential rally can develop in July/August first.

"There will be a last-minute deal, but whatever Athens manages to agree to it will not be able to implement."
"More than 70% of Greece’s debt is already with the official entities. There cannot be a Greek Lehman for this reason alone."
"If Greece defaults, the next Managing Director at the IMF will not be European."
"There are defaults at all levels of the society in Greece, because the general view is that defaults are acceptable."
--- Stephen L Jen, fmr head of FX at Morgan Stanley and co-founder of hedge fund Boutique SLJ Macro Partners

Gold Short Term
On Wednesday resistance is 1188-1198 and the 1202-1209 area and then 1218-1228 weekly.  Look for support in the 1172-1176 area on Wednesday and then 1156-1164.
A daily CLOSE BELOW 1162 will ADD A LOT OF WEIGHT OF BEARISH ACTION and the potential to move to new bear market lows in gold will increase substantially.  Until then we remain in a trade range.
If we can hold the 1176 area, it’s possible to bounce back to 1200 this week.  But overall, until we close above 1208, its best to favor lower, especially with the short term cycle pointing down to the end of the month.
Gold price chart since the 2015 high

What Next?
It looks like the short term bearish red cycle is in play with this week’s lower prices. The cycle is not due to bottom until month end.  Tuesday held at 1176 and it’s possible we can get a bounce here back to 1194-1204 this week before a low occurs at month end. Any move below 1171 would favor a potential test of 1156-1164.
Indeed, its “Chop around the clock” as we remain in massive congestion. 

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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