Long Term – Bullish – The key resistance area’s to regain upside momentum and
potential new highs are 1792 and 1804.
Medium Term Bullish – – resistance 1755-1765 – support 1620-1648 and 1570.
Intermediate term –Neutral--- A close above 1705 gives bullish reading
Medium term and long term accumulation should be adding 5% to their holdings at around 1660.
Resistance for this week 1675-1685 2nd tier 1692-1703
Support for this week 1643-1653 2nd tier 1620-1627
The biggest market making news of this coming week will be the Federal Reserve Meeting on the 29th-30th of the month to discuss and update policy changes. Here’s what they are facing as they enter the meeting.
The Federal Reserve Friday release of assets and liabilities of commercial banks show more than $114 billion exited the biggest U.S. banks in January. The most current figures, covering the first full week of 2013, show the largest one-week withdrawals since the Sept. 11, 2001, attacks. Even when seasonally adjusted, the level drops to $52.8 billionundefinedstill the third-highest amount on record.
The most likely explanation is the expiration of the Transaction Account Guarantee program, the extraordinary federal effort to shore up the country’s non-gigantic banks during the 2008 financial crisis. As of January 2013 the FDIC stops offering 100% coverage for all insured deposits. That amounts to $1.6 trillion in deposits, 85-90% deposited with the TBTF mega banks. Once the insurance ramps back to $250,000 the FDIC risk amelioration offered to large depositors will cause them to flee from the insecurity of the much reduced FDIC coverage. This money will rotate immediately into short term Treasury securities. The treasury, in order to handle this flood of money, will immediately offer negative interest rates. This financing will resemble the .5% negative interest rate offered by the Swiss and Germans on the funds flooding to their banks from Spain, Greece and Italy. This will be a bank run much larger that the Euro banks flight to safety.
The Social Security Trust fund must make at least 5-6% return to maintain its balance and provide income to the SS recipients. The TF is still guaranteed to go bankrupt by 2033, 21 years from now. The TF is required by law to invest in Treasury bonds. The actuarial problem now facing the TF is that they will be rolling old bonds yielding 5.6% into a yield pool averaging 1.4%, a 75% drop in income. This dramatic yield drop coupled with a 60% increase in SS recipients from 50 million to 91 million in the next 10 years will assure the TF will go bankrupt in about 10 years.
Federal Reserve Chairman Ben S. Bernanke’s unprecedented bond buying pushed the Fed’s balance sheet to a record $3 trillion as he shows no sign of softening his effort to bring down 7.8 percent unemployment.
The Fed is purchasing $85 billion of securities every month, using the full force of its balance sheet to stoke the economic recovery. The central bank began $40 billion in monthly purchases of mortgage-backed securities in September and added $45 billion in Treasury securities to that pace this month.
The Fed’s total assets climbed by $48 billion in the past week to $3.01 trillion as of Jan. 23, according to a release from the central bank yesterday in Washington. The announcement came as the Standard & Poor’s 500 Index closed at the highest level since December 2007.
Fed policy makers have voiced increasing concern that record-low interest rates are overheating markets for assets from farmland to junk bonds, which could heighten risks when they reverse their unprecedented bond purchases.
Gold Daily Chart
Gold remains caught in wedge formation and that wedge is nearing the end where the trend lines meet so something will have to give either way. It’s possible for the range to get even tighter this week but price can move out of this range at any time now. Interestingly the 50 day average is also at the top of the downtrend line and the 200 day average just a hair under the middle of the wedge at 1664. That lower trend line hooks up all the lows from 2012 so you can bet that the technicians and the control boyz are watching that line. With the Fed meeting this week it would be a perfect time for the control boyz to try and break the back of the bulls. If they were able to do it and push price below the line and just a bit below 1626 there certainly would be some stops there to flush the longs out. Such an operation would be perfect to set up a low before the Chinese New Year festivities kick in on February 10th.
In summary, we’ve got to make a move above or below these lines before we can establish a trend and we have to watch for fake outs at them. If we do drop and we go below the trend line to flush out the market, any reversal back up over it that closes at a daily high point on the bar would be a clue that it might be a fake out. Closes below 1620 would warn that gold can continue lower towards 1570-1585 and add a lot more of a bearish tone to this market.
What next?
Gold was pummeled once again at a major resistance point where the weekly downtrend was threatening to break out of its correction. Odds favor that options expiration and the Fed Meeting this week was a big factor in the takedown. However, if gold doesn’t recover and begin a rally this week after the FED meeting, and we begin to close below 1620, it would deliver a major blow to the markets. and begin to suggest that there is more than meets the eye in the gold market. Odds favor that the gold market will be subdued as the FED meeting this week always looks to kill price and the longs with it. We’ll have to see after that. A weekly close below 1647 will be a red flag warning. It takes a close above 1675 to stabilize the market. Recall the daily price channel and that price wedge we are in. Until we break out one way or another, the trend is basically directionless. If prices close below 1620 the odds favor gold will dive towards 1550-1570.
A drop or low this this week would set up for the Chinese New Year that begins the 10th of February and usually provides a boost to gold. If it doesn't then the market has a lot more to worry about than what the gold bulls are looking at.
BOTTOM LINE
Gold remains under pressure. Last week was yet another failure at key resistance. On our daily updates the hourly chart provided us with the clue with the choppy and overlapping price pattern that kept us skeptical of the rally. For now, until we break out of the wedge gold can still (as crazy as it sounds) provide lower prices.
We’re told every central bank is buying, and China is picking up everything they can and there is no physical gold. The perma bulls have to be right. There is no other answer but manipulation. Either that or there is a massive fundamental change coming that only a few entities know.
Whatever the reason, the one and only thing that we can hang our analysis hat on is the price action. That is what we did again last week and it did not disappoint and the chop pattern did indeed buckle to lower price.
A low is due here by the 30th on the short term but we won’t rule out ANYTHING in front of a Fed meeting. The control boyz are in striking distance to really bloody the bulls and if they are that strong and can really manipulate the market then they have their chance to do it at these levels.
INVATA SA TRANZACTIONEZI GRATIS PIPSI IN FOREX
Long Term – Bullish – The key resistance area’s to regain upside momentum and
potential new highs are 1792 and 1804.
potential new highs are 1792 and 1804.
Medium Term Bullish – – resistance 1755-1765 – support 1620-1648 and 1570.
Intermediate term –Neutral--- A close above 1705 gives bullish reading
Medium term and long term accumulation should be adding 5% to their holdings at around 1660.
Resistance for this week 1675-1685 2nd tier 1692-1703
Support for this week 1643-1653 2nd tier 1620-1627
The biggest market making news of this coming week will be the Federal Reserve Meeting on the 29th-30th of the month to discuss and update policy changes. Here’s what they are facing as they enter the meeting.
The Federal Reserve Friday release of assets and liabilities of commercial banks show more than $114 billion exited the biggest U.S. banks in January. The most current figures, covering the first full week of 2013, show the largest one-week withdrawals since the Sept. 11, 2001, attacks. Even when seasonally adjusted, the level drops to $52.8 billionundefinedstill the third-highest amount on record.
The most likely explanation is the expiration of the Transaction Account Guarantee program, the extraordinary federal effort to shore up the country’s non-gigantic banks during the 2008 financial crisis. As of January 2013 the FDIC stops offering 100% coverage for all insured deposits. That amounts to $1.6 trillion in deposits, 85-90% deposited with the TBTF mega banks. Once the insurance ramps back to $250,000 the FDIC risk amelioration offered to large depositors will cause them to flee from the insecurity of the much reduced FDIC coverage. This money will rotate immediately into short term Treasury securities. The treasury, in order to handle this flood of money, will immediately offer negative interest rates. This financing will resemble the .5% negative interest rate offered by the Swiss and Germans on the funds flooding to their banks from Spain, Greece and Italy. This will be a bank run much larger that the Euro banks flight to safety.
The Social Security Trust fund must make at least 5-6% return to maintain its balance and provide income to the SS recipients. The TF is still guaranteed to go bankrupt by 2033, 21 years from now. The TF is required by law to invest in Treasury bonds. The actuarial problem now facing the TF is that they will be rolling old bonds yielding 5.6% into a yield pool averaging 1.4%, a 75% drop in income. This dramatic yield drop coupled with a 60% increase in SS recipients from 50 million to 91 million in the next 10 years will assure the TF will go bankrupt in about 10 years.
Federal Reserve Chairman Ben S. Bernanke’s unprecedented bond buying pushed the Fed’s balance sheet to a record $3 trillion as he shows no sign of softening his effort to bring down 7.8 percent unemployment.
The Fed is purchasing $85 billion of securities every month, using the full force of its balance sheet to stoke the economic recovery. The central bank began $40 billion in monthly purchases of mortgage-backed securities in September and added $45 billion in Treasury securities to that pace this month.
The Fed’s total assets climbed by $48 billion in the past week to $3.01 trillion as of Jan. 23, according to a release from the central bank yesterday in Washington. The announcement came as the Standard & Poor’s 500 Index closed at the highest level since December 2007.
Fed policy makers have voiced increasing concern that record-low interest rates are overheating markets for assets from farmland to junk bonds, which could heighten risks when they reverse their unprecedented bond purchases.
Gold Daily Chart
In summary, we’ve got to make a move above or below these lines before we can establish a trend and we have to watch for fake outs at them. If we do drop and we go below the trend line to flush out the market, any reversal back up over it that closes at a daily high point on the bar would be a clue that it might be a fake out. Closes below 1620 would warn that gold can continue lower towards 1570-1585 and add a lot more of a bearish tone to this market.
What next?
Gold was pummeled once again at a major resistance point where the weekly downtrend was threatening to break out of its correction. Odds favor that options expiration and the Fed Meeting this week was a big factor in the takedown. However, if gold doesn’t recover and begin a rally this week after the FED meeting, and we begin to close below 1620, it would deliver a major blow to the markets. and begin to suggest that there is more than meets the eye in the gold market. Odds favor that the gold market will be subdued as the FED meeting this week always looks to kill price and the longs with it. We’ll have to see after that. A weekly close below 1647 will be a red flag warning. It takes a close above 1675 to stabilize the market. Recall the daily price channel and that price wedge we are in. Until we break out one way or another, the trend is basically directionless. If prices close below 1620 the odds favor gold will dive towards 1550-1570.
A drop or low this this week would set up for the Chinese New Year that begins the 10th of February and usually provides a boost to gold. If it doesn't then the market has a lot more to worry about than what the gold bulls are looking at.
BOTTOM LINE
Gold remains under pressure. Last week was yet another failure at key resistance. On our daily updates the hourly chart provided us with the clue with the choppy and overlapping price pattern that kept us skeptical of the rally. For now, until we break out of the wedge gold can still (as crazy as it sounds) provide lower prices.
We’re told every central bank is buying, and China is picking up everything they can and there is no physical gold. The perma bulls have to be right. There is no other answer but manipulation. Either that or there is a massive fundamental change coming that only a few entities know.
Whatever the reason, the one and only thing that we can hang our analysis hat on is the price action. That is what we did again last week and it did not disappoint and the chop pattern did indeed buckle to lower price.
A low is due here by the 30th on the short term but we won’t rule out ANYTHING in front of a Fed meeting. The control boyz are in striking distance to really bloody the bulls and if they are that strong and can really manipulate the market then they have their chance to do it at these levels.
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
