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 1621 for bullish & close below 1542 for bearish
Support and Resistance
(APRILGOLD – SUBTRACT ONE DOLLAR FOR APRIL GOLD)
Initial Resistance 1604-1614 and 2nd tier 1627-1637
Initial Support 1581-1591 and 2nd tier 1563-1573
CME GROUP RECAP (Chicago Merc Exchange)
the gold market spent most of the morning trade below the prior session's closing level. Strong gains in US equities, generally benign Fed testimony and strong US pending home sales figures seemed to undermine gold this morning. In other words, gold seemed to be feeling some pressure from sagging safe haven conditions and that in turn seems to suggest that classic physical commodity market issues still aren't directing gold prices in price discovery. However, the physical demand market remains an enigma with constant reports on the internet of shortages. Perhaps seeing the highest pending home sales readings since April of 2010, keeps the fear of a premature end to QE alive. With the April slide back toward the $1,600 level in the morning, gold tried to rally but the bull camp just didn't have the horses to prop up prices. By time COMEX closed in New York prices were hovering near 1596 after a big 4000 contract spike in one minute selling on the bid. Prices later made it down to 1591.60 in April gold before recovering to close on Globex at 1596.
In retrospect, April gold seemingly failed because of rekindled fears of an eventual end to Fed support but it is also possible that gold was under pressure because of rumors that US leaders were planning to meet to discuss ways to avoid the sequestration. News of lower gold activity in London for last month might have been another element applying some pressure to gold prices today. However, a conflicted economic outlook, muted inflation pressures and periodic adversity from the currency markets would seem to left the bear camp in gold with the edge. However, prices were pulling back from a 65 dollar rally from the lows and after hitting 1619 weekly resistance, Wednesday was a retest of under 1600.
It’s the last day of the month and the Gann one year anniversary of the gold 100 dollar drop from 1792 on Feb 29th 2012 that came after Bernanke used one of his “language” ploys to finish off a massive 240 dollar rally that had taken place from Dec 29, 2012. That high would remain in place until October 5th and even then, it was exceeded by 6 dollars and for one hour only. When we combine that anniversary date with the last day of the month there is a potential for a big range on Thursday.
Thursday Daily Bull/Bear Pivot Zone = 1600-1604 (Ideal 1600.80)
Weekly Bull/Bear Pivot Zone = 1580-1587 (ideal 1584.50)
Gold Hourly Chart
a typical consolidation day after a big run-up was on tap Wednesday as prices retreated almost 28 dollars from the high at the Wednesday low. Prices basically held the green 200 hour moving average and while it closed below 1600 the pivot point going into Thursday is the 1600-1604 area. It looks like there’s an early battle for that range as we enter the London session. Support is the 1575-1585 area with the strongest support near 1578-1582 at the purple channel line. That was the closing range last Friday and we can’t rule out a move back to that area on the monthly close. Monthly support is the 1535, 1542 and 1555 areas at the lower red channel lines with 1542 representing the Fibonacci 38% retracement level. Because it’s the last day of the month we can’t rule out a deep test of 1564 and or 1578-1582. Overall it’s quite possible that 1590-1610 will be the bulk of the trade but like we said, it’s a one year Gann anniversary and a monthly close.
Key resistance remains the purple channel line which has now risen to 1627 as we enter London. Thus the 1619-1629 area is the Weekly resistance and then the red line near 1635 and the one near 1645. The one thing we don’t like is the choppy and overlap look to the price pattern and the fact that the entire rally was a one hour affair. That’s not usually how the uptrend performs when prices are in a bull trend. The cycles do favor a price turn into the week of March 10th but we need to e cautious just the same. Thursday will most likely be the battle of 1600 with prices ranging plus or minus 10 to 15 dollars on either side if we get a long range bar. If the 200 green moving averages give way we’ll look for a test of the purple line near 1580.
Gold Cycles
the next short term cycle window closes today and odd favor that the upside will come in play up until around March 10th. There is a medium term cycle window (one every 16 weeks) that is now open and that could bring a big move over the next 2 – 3 weeks. It also could bring a medium term inversion in a manner that developed in December. The way the seasonal and cycles are at the moment, odds favor a move up into the 10th and then a final low in March (near the 22nd & plus or minus 2.5 weeks).
From March a May/June high would come in play. In summary, if we get a dip to the lower channel line on Thursday near 1580 we feel it would be a good trade with stop 10 bucks under it. Resistance on the daily chart is 1627-1630 and then 1645. If the cycles play out, they favor higher into early March.
The thing that keeps us at bay is the terrible performance of Gold stocks and the choppy look to the pattern since the low at 1555. While many are proclaiming the low is in now we still need to keep an open mind. Most important was the entire move to 1620 was all in about an hour.
Gold Stocks
Gold Stocks Short Term (NUGT) –
BEARISH at 10.47 since 1/24/12
(Moving average trend) 7.15-7.49
NUGT remains bearish and will need a close above 7.15-7.49 to neutralize the downtrend. Of all the action the gold stocks keep me concerned that there could be more danger than what most expect. We said that when gold was in the 1660 area and as you can see below its hard to imagine that gold had a 65 dollar rally from the low this week and the DOW gained 300 points in the last two days. OBVIOUSLY if NUGT goes to the lower trend line under 4 bucks it will be worth a speculative buy. The intermediate term trend remains down and the last sell signal at 10.47 on our moving averages is up in the vicinity of 40% and that’s just from 33 days ago. In summary it’s the gold stock charts that keep me very leery and worried about the upside in the metals.
Trend Change Results on NUGT using moving averages since 3/1/201
Bearish at 22.45 on 3/2/2012 Neutral at 13.48 on 4/30/12 + 8.97
Bearish at 12.43 on 5/2/2012 – Neutral at 10.78 on 5/23 + 1.65
Bullish at 12.44 on 6/1/2012 – Neutral at 12.04 on 6/21 - 0.40
Bearish at 10.65 on 6/28/12 -- Neutral at 12.05 on 7/2 - 1.40
Bearish at 11.65 on 77/12 --2- Correction over 8.85 on 7/25 + 2.80
Bullish at 8.85 on 7/26/12 --- Neutral at 17.13 on 9/24/12 + 8.27
Bearish at 16.75 on 10/11/12 –Neutral at 10.97 on 12/31/12 + 5.78
Bearish at 10.11 on 1/4/13 --- Neutral at 10.17 on 1/11/13 - .06
Bullish at 10.47 on 1/22/13 --- Neutral at 9.64 on 1/23/13 - .83
Bearish at 10.47 on 1/24/13
GOLD MEDIUM TERM WEEKLY PRICE CHART
Medium Term Trend – NEUTRAL (1673.50-1680)
For the upside to get back to bullish mode on the medium term trend, we need to get back above the 2012 trend line and the moving averages at 1673-1680. We discussed that the market was in a situation where there could be another dramatic move over the next couple of weeks and it didn’t wait long for the first installment. The trend remains neutral on the medium term. The key now is for gold to get back above the channel line and the moving averages to re-establish the bullish medium term reading. With the last day of the trading month and the one year anniversary of the 1790 high and 100 dollar gold drop ---- it could be a wide trading range day on Thursday.
GOLD USING ETF GLDGold Intermediate Trend –BEARISH since 2/11/13
Moving Average Trend – 158.09-159.30
with the moving averages at the next channel line GLD would have that area as a minimum target. If GOLD exceeds 1622-1627 it would increase the odds that we’re heading in that direction in the next two weeks. In summary, the first target for a low was a direct hit and it’s coming in right at the cycle turn we stay with the same as last night that odds favor a low should be in place for an upturn at least on a short term basis. We will keep in mind however the COT report where wild swings were favored and that today was a FED meeting testimony. Watch gold and if it gets above that 1622-1627 area it will add to upside potential. We’ve hit the downtrend line exactly. The horizontal line across the bottom is equal to the 1520-1530 area in spot gold and is the 2011-2012 major support line.
GDX GOLD MINING INDEX (North America mining)
Intermediate term Trend –BEARISH
Moving averages 40.70-41.30 - Red above blue line and price below moving averages.
We are adding slowly but surely to GDX and have now ½ a position. Make sure it’s only 1 position in your portfolio. BUY ZONE TO build a position --- ¼ bgt at 52 on 10/16--- ¼ at 47 on 11/16 and ¼ at 45.24 on 1/16/13 --- I’ll PLACE THE FINAL portion of 1 order at 34.50.
GDX like the rest of the gold stocks are scary to say the least. We need a close back above the moving averages and channel line to end this long correction.
What next?
Thursday holds the potential for a wild day and it won’t surprise us if gold tries to test under 1590. The control boyz will try and hold 1600-1610 and they really don’t want gold closing above 1600. That 1580 level we closed at last Friday could very well be a target for them so it’s best to be on guard.
BOTTOM LINE
if the cycles play out a two week move higher is favored but we might have one more day of downside testing on Thursday as the control boyz don’t want a close above 1600. The next lower purple line is near 1580 and we can’t rule out they go after it. The pattern is choppy and overlapping on the hourly chart, the entire rally was practically just one hour, and it’s a Gann anniversary as well as the last day of the month. IT makes for what could be an interesting day.
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GOLD CURRENT TRADE
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GOLD CURRENT TRADE
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Position: Long Apr Gold on 28/02/2013
Entry: 1577
Stop Loss: 1552
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
