Gold Trend 20/02/2013

Long Term=Bullish - major yearly resistance 1792-1804 needs to be exceeded on a monthly bass and close above 1840 to resume long term up bull trend.

Medium Term=Neutral - It takes a weekly close above 1694 to turn the trend back to bullish. Resistance 1755-1765(Oct/Nov 2012 Resistance) Support 1500-1550.

Intermediate Term= Bearish--it takes a close above 1661 for neutral.

Short Term=Bearish--- Need a close above 1651 for bullish

Support and Resistance

(APRILGOLD – SUBTRACT TWO DOLLARS FOR APRIL GOLD)

Initial Resistance 1614-1626 and 2nd tier 1636-1642

Initial Support 1599-1605 and 2nd tier 1575-1585

FED FOMC minutes release

Odds favor they will say the same thing as they usually do, that they will keep stimulating.  Of course consideration has to be what the G20 has probably asked, the upcoming tax debates of March 1st and the ratings agency watch on US debt ratings.  Should the FED decide on stricter hawkish statements the stock market would get its reason to pullback.  But it’s at such lofty levels at the moment perhaps the FED sees this as a chance to try and pullback and sacrificing a stock market pullback. 

Regardless of the message, we know that the metals have usually not done very well at these minutes’ releases. However a move back up to 1623-1628 where we have Fib retrace levels and where we broke down from last week. The other resistance is the 1641 (purple line) area. We’re never sure what the control boyz have in mind at these announcements. If everything plays to the book, a low next week should lead to a two week bounce. 

Prices for April gold – subtract 2 dollars for Spot
Wednesday Daily Bull/Bear pivot zone 1607-1611 (ideal 1607)
Weekly Bull/Bear pivot zone 1624-1628 (Ideal 1626)

The hourly chart

So far the trend lines we discussed last night have held (1596-1605) and still have the potential to do so until the FED FOMC minutes are released at 2pm Wednesday NY (eastern standard time).

The ideal low is still not due until next week (25th – plus or minus 72 hours) but we’ll be the first to admit that the market is becoming oversold at these levels.  The 1609-1614 area is first resistance on Wednesday and with it being mid-week Wednesday we’re not sure if we’re going to get a low or high for the week as Wednesday has a lot of highs and lows that occur for the week.  Additional resistance is 1622-1628.  Finally the purple line and 200 hour moving average at 1640 and red line just above at 1645 is likely the highest point we should expect and the 1622-1628 area the most likely point if the control boyz want to take the market higher on Wednesday. With the trend down and the gold bulls bloodied there may not be many who want to participate until after the FOMC minutes and if that is the case then we could well cap out near 1613-1614 until the meeting.  Support is 1595-1604 at the trend lines. Any drop below 1590 would most likely favor a move to the 1542-1560 area where the red trend lines are.  The one exception would be the daily chart (next chart in report) with support in the 1570-1575 area.  In summary, the trend is still down.  This area is certainly one of the spots where we could see support but the short term cycles don’t line up until next week.  Price always rules and cycles are secondary, but we can’t ignore them either.  So while we may get a bounce, the odd favored is still for a short term low next week if we’re going to be conservative. 

 

What next?

The trend remains down.  The 1622-1628 area is resistance and 1st support is 1598-1605.  The next short term low is due next week. The ideal scenario is a high on Wednesday/Thursday and then a final dip down next week for a low that will be followed by a two week bounce into Early March.  The FOMC minutes release on Wednesday should be the most important event of this week.  Odds favor range bound trading in the 1603-1620 area on Wednesday and while we are on a bounce from the channel lines on the hourly chart, the trend is still overall down.  Major support on medium term is 1510-1550 on the weekly charts, and on the hourly chart1596-1603 and 1542-1560. The daily has 1575-1583 at the moment.  We’re not sure which target the control boyz want for next week yet or if they are planning to move prices higher on the FOMC or delivery another crushing blow to the gold bugs. They bloodied the longs last week and another one would literally weaken them at the knees.  If the gold stocks are any indication the control boyz are going for all out liquidation event.  They pretty much already have it in gold stocks.  It’s the kind of situation where the ones who are left are most likely nearing the end of their rope.  We’re not counting the staunch perma bulls as no matter how deep prices are driven they’ve pretty much made the commitment that they’re staying the course on the gold stocks.

BOTTOM LINE

At some point in time the bottom will come.  On a short term basis, the ideal time will be next week.  On a medium term level, we don’t think we are there and there’s more gnashing of teeth favored before it’s over. At least that‘s what the odds favor at the moment.  The trend remains down for now.  The FOMC is out tomorrow.  Odds favor the longs are going to be very nervous by time noon rolls around in New York on Wednesday. If we could get a high volume capitulation day we could probably put an end to this downtrend and at least get a chance to try and reverse the trend.

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GOLD CURRENT TRADE
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Long 1 April Mini Gold at 1603 on 15/02/2013

Stop lose at 1582

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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. 

 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