Long Term-Neutral – Need a monthly close above 1490-1526 in May to regain Bullish status.
Medium Term=Bearish Need a close above 1650-1675 to neutralize.
Intermediate Term=Bearish –need a close above 1435 to return neutral.
Short Term=neutral/bullish– lower end of trade range reached (1333-1346) --it takes a close above 1413 to go bullish ---- trading range is incredibly wide. A close below 1333 gives a bear reading
Support and Resistance
(NOTE JUNE GOLD NUMBERS)
Initial Resistance 1393-1401 and 2nd tier 1411-1421
Initial Support 1363-1373 and 2nd tier 1328-1343
GoldTrends Overview
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The good
There is really nothing much to add from the weekly gold report from Sunday night until things pick up again on trading. Gold did not make a new low last week and silver had a major reversal day last Sunday and closed right at the weekly pivot at the 1386 area. The fact that silver made a new low 4 weeks after gold is usually a signal that prices have bottomed at least on the short term and potentially on the medium term. Its the strongest signal we've seen so far that the metals have given in this correction.
The fact that silver was a Fibonacci 34 month low in its 34 week down from the October high and gold having completed a Fibonacci 89 weeks down from its peak along with 4 cycle levels of silver at a time point where they most often bottom gives us the best chance like we said to favor a rally point for the metals. Given the fact that the stock market at least gave initial signs of a top and its best chance that a correction at least on the short term is underway and the fact that god has been running counter the stock market also adds to the potential. In addition the short term cycles are due to turn up as well. The close just above the weekly pivot also adds to a favorable indication as does the COT (commitment of traders) report showing the small speculators holding a very low amount of long positions and the weekly chart we displayed showing the high overall short positions in juxtaposition with the weekly price chart.
Reports that physical buying continues strong and with the FED getting a stern message from the stock market to not even think of taking away the punch bowl could be a bullish factor have some traders favoring that as well. We're not so sure on the last one as gold hasn't rallied on on this latest QE but in fact has dropped significantly. So we're not so sure on that last one.
The bad
There are other concerns also that can't just be brushed aside. The faltering economy and the growing danger of debt levels and the panic any type of default would bring out of Europe and the current mess there remains a huge concern of a liquidity squeeze development. The new Japan Yen carry trade and the mass exodus out of the bond market and the explosive move in rates on a percentage basis has really shook the markets. They may have used Ben as the reason to sell in Japan, but the rate rise better get contained and fast.
The other thing to watch is the gold reaction on the good news / bad news economy factor. The moves in gold (although not viewed by hardly anyone) has us thinking that gold is actually looking for good economic data to rally on rather than bad. We think that has been missed because bad economic data still moves gold up a few days before it turns back down and vice versa.
Data coming out of China still shows a slowing and their continued concern of a hot real estate market has them till with a tighter reign on the printing press and policy and those remain concerns
The ugly
The hourly chart and the pattern that is emerging has us pretty concerned. As you'll see the main trend is still down. We can see the sell off into last weeks low was an impulsive wave down and the move since the low is "Choppy and Overlapping" and its suggests and favors that its NOT the main trend, and this type of pattern MOST OFTEN fails and turns down. It is not a pattern that signals strength at the moment. That doesn't mean gold can't move higher in this short term and next two weeks. But it warns that it is a pattern that is much less reliable, is prone to failure and has the odds stacked against the upside. What does happen during the short term cycles is it continues in a chop and overlap condition and then when we get anywhere near the next cycle turn, it usually turns down sooner. But it does make it a riskier situation on the upside. There are times when the pattern does morph and begins to rally impulsively. And that is when it usually makes its decision as to whether it continues higher or fails at a weekly resistance point (1393-1401 or 1412-1422) is where to watch.
It's options expiration on Wednesday and that means that things can get tricky until then. The control boyz have a bad habit of moving prices lower at expiration. We need to be careful until Thursday of this event.
And to top it off, the June contract ends trading for anyone not taking delivery on Friday. That means that the contract will be in liquidation this week and then August gold begins trading next week. The danger here is that traders sometimes sell this contract and DO NOT GET into August right away. They like to see it and get back in 20-30 dollars lower. That doesn't always work for them but it is another factor that makes for VOLATILITY to be greater and could very well continue the choppy and overlapping condition that we've been in.
So we have a lot of factors and confluence for the metals this week. On one side of the coin there's a lot of bullish factors but they are countered with some "look out" factors as well. Finally, the control boyz have been in charge of the market and they continue to be so at the moment.
In summary, we're more bullish than bearish but there's still a lot to be on the watch for this week that has the potential to trip up the market and for us to keep a cautious approach. The option expiration and rollover from June to August futures warns us we could see continued choppy and over lap as we've been undergoing for this trade week.
The key to begin with will be the 1415-1430 area. That really is the area we need to overcome to be above resistance and to favor another test of 1480-1520 again. Support on Tuesday will be the 1363-1373 area and the 1375-1380 zone. The 1392-1398 area is where the bears are trying to defend and then the 1410-1415 zone. Those are the likely support and resistance points as we begin the week..
Bull Bear Pivot Zone
Monday Bull/Bear Pivot Zone = 1387-1391 (Ideal 1387)
Weekly Bull/ Bear Pivot Zone = 1366-1378 (ideal 1378)
Monthly bull/bear pivot zone = 1445-1465 (ideal 1465)
KEY RESISTANCE POINT for the WEEK
This week's number is 1393-1401 and 1415-1425.
Gold Short Term
Resistance is the 1392-1398 area and 1412-1422 area. Those are the two area's to watch on Tuesday. One of them should provide the high for the day on an Odds basis. The one thing I don't like is how choppy and overlapping the price is at the moment. That's not usually bullish and until we get above resistance listed, I'll remain on my toes. In summary, we think the bulls are close to getting control for the next two weeks. Just have to watch for options expiration and contract rollover.
What Next?
The main battle for the bulls and bears is at the 1386-1395 area. There's some support in the 1375-1380 area and 1360-1365 as well as 1343. There's a lot of bullish factors on the short term that we've described on the overview at the top of the report, but options expiration and contract rollover needs to be watched because the control boyz are notorious for take downs at these events.
The key points to watch is the 1392-1398 and the 1411-1415 area on Tuesday. One of those two area's should provide resistance. A close above 1411-1415 is bullish.
Bottom Line
Gold needs to "Mac show" this week and begin an short term up move The control boyz have a deep grip on this market at the moment and our own feeling is that gold needs good economic news and not bad. Its not what most think. But gold has been very week thru QE3 as well as with the real readings of the economy. It won't be surprising if stocks can't continue higher without better readings either.
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
