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 1631 for neutral.
Short Term=Neutral --- Need a close above 1616 for bullish & close below 1542 for bearish
Support and Resistance
(APRILGOLD – SUBTRACT TWO DOLLARS FOR APRIL GOLD)
Initial Resistance 1584-1594 and 2nd tier 1604-1611
Initial Support 1563-1571 and 2nd tier 1542-1554
The hourly chart
Thursday’s low held our key double channel line in the 1640-1660 area. Odds are favoring a low will take place in that area with 1642 being a 23% Fib retracement of the entire bull market. We’ve only had four drops below that number in the entire 18 months of this correction and none of the drops we’re able to hold gold below it for more than a day on a closing basis. Our best take then while this might not be “the” low of this correction it should be for this particular drop from which a two week rally is due to begin between now and Wednesday. Thus if we get one more probe in this area, odds will favor it should hold. A low next week would also be a perfect 360 degree Gann anniversary cycle from the 2012 February high of 1792. That day was the 2nd highest day of the year and price on Oct 5th spent less than a few hours above it. It also was a 100 dollar drop day so we feel next week holds a good chance of providing a low point and at least a rally into early March---and who knows perhaps more. It’s definitely a candidate for a low week.
Resistance will be strongest at 1584-1594 on Friday but a close above there will certainly add to the case that a low has taken place. Support is 1663-1672 and 1542-1556. The perfect scenario would be one more screaming spike down just under 1650. If we get that and reverse from 1642-1658 odds favor a low will be in place.
What next?
The stock market has made an initial turn down and now we have to see if there is follow thru and what we mean by that is a selloff that would be deep and steep is what we’ll watch for. First support is the 1470-1480 area on the S&P.
As far as gold, there’s a short term low due between Friday and Wednesday. Right now the 1540-1560 area is the main target and yesterday’s 1555 low was the first probe into that area. If we can hold 1540 on a closing basis, we’ll favor a 2 week up move to begin in the next 4 trade days.
Bottom Line
We listed 1575-1585 as Thursday resistance and got to 1584.50. On Friday 1584-1592 is resistance. In summary, as long as things don’t totally fall apart we should be making a low. The FEDs are TALKING about cutting back and that has spooked the market. As long as bad news comes out on the economy, gold will be able to rally. Good news will put pressure on it.
OPTIONS EXPIRATION FOR GLD AND SLV take place on FRIDAY so let’s be on guard for that. Next week MARCH SILVER OPTIONS expire also so keep that in mind.
The ideal time for a short term low has arrived and the 1542-1558 area is a potential for where it will develop. But let’s not forget that a big correction spike low and reversal can still happen so let’s be careful.
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.
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
