Gold Trend 08/March/2013

We are closing out our position on the trade opened on 28th Feb 2013 (long Apr Gold @ 1577).

We have closed at 1577 to break even.  We still feel that a bottom looks to have formed, especially after the abnormal reaction to the positive US payroll and jobs news - however we'd prefer to err on the side of caution and wait for confirmation.

We'd expect to re-enter long either on a successful retest of 1554 or a break above the 1600-1620 area. 

Any fall below 1554 would have us on alert for a short position.

We will obviously keep you posted as soon as any developments occur.

This way we are not holding an open position in an uncertain market over the weekend - so let's relax for a couple of days and come back refreshed on Monday!

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 1612 for neutral.
Short Term=Neutral/Bearish --- Need a close above 1604 for Bullish and close below 1555 for full bearish
Support and Resistance
(APRILGOLD – SUBTRACT ONE DOLLAR FOR APRIL GOLD)
Initial Resistance 1580-1592-and 2nd tier 1599-1607
Initial Support 1564-1574.50 and 2nd tier 1540-1556

Consideration – Non – Farm Payroll on Friday

First some thoughts on the report itself – as it probably will be a big market day.  Only if the reports come in exactly as anticipated will there not be volatility.  The control boyz will have their fingers on the mouse ready to push or pull the metals. 

•    Much will be made of seasonal adjustments - - mostly by those who have never produced a dataset that included any seasonal adjusting!

•    No one will recognize that the BLS estimate is just that --- an estimate. We already know most of the answer, and it is pretty good.

•    Any extreme result will get an exaggerated interpretation. If the job growth were to be 50K, we will have claims that recession is upon us. If the BLS estimate is 300K, we will hear that the Fed is about to tighten rates!   Thus the control boyz will do what they want.

•    Watch the "hours worked." This could be an early indicator of employment weakness.

•    As usual, the number is less important than everyone thinks. So here is the most important point:

The Fed will not change policy based upon the February employment report-no matter the outcome. However, the initial market reaction will be knee jerk and will not be a consideration until after the markets make their initial move.

Now some thoughts on gold and markets

•    Gold and the stock market have detached with stocks up and gold down.

•    The control boyz will once again do what they want as it’s their signal to either raid or push it up at a moment’s notice in a play that keeps everyone else either on the sidelines or at great risk if one is on the wrong side.

•    If the news is good then stocks can gap up and gold can gap down.

•    If the news is bad the opposite can happen.

•    With both markets at extremes – stocks overbought & gold oversold and initial move can be reversed regardless of how the news comes out and so there could be wild swings in the market on Friday.

•    Gold has been weak even in a short term up cycle. The pattern is sideways and choppy and overlapping.  That has usually not ended well for gold during this correction. With the way swings can happen and get reversed it is very easy to get hurt in a market such as this.

•    The control boyz have the lowest short position in quite a while as it’s the managed funds that are loaded up. While that could be bullish, it also gives the bullion banks a lot of ammunition and an opportunity to add to the short side and really give gold a test of the lower support zones. In other words, this is their chance to really give it to the bulls if they so choose.

•    Naturally they could allow a sharp move up into next before they turn on the short spigots.  Especially if the news is gold bullish.

•    While China and India might be big buyers, they are not necessarily in a hurry to add and could wait for a plunge before entering the market.  Big buyers follow seasonal patterns and so do the professionals.  They know a seasonal turn is due at the end of March and could wait until then to re-enter the market.

Once the flush out was complete today we got price patterns that actually looked good for a change.  It looks like the cycle of March 5th low has occurred.  A day late but these types of cycles are not exact days.  With today’s action we favor higher now into next week.  1st target is the green 200 hour moving average in the 1585-1587 area and if exceeded then 1592-1604 (ideal 1599-1604) for Friday. Additional resistance is 1615-1627.  Support is the 1575-1578 and the 1566-1571 area.

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GOLD CURRENT TRADE
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Our Position 
Bought 1Apr Gold on 28/02/2013

Entry: 1577

Stop Loss: 1552

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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