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Thursday, February 7, 2013
Gold Update This Week ~~~~~
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The Gold Update
“Surf’s Up! … and so is Gold”
Prala do Norte, Nazaré, Portugal -- 28 January 2013
Observation structure: The Economy
Standing atop the structure: The FOMC
Surfer-boy Garrett McNamara: Joe Six Pack
Cresting one hundred-foot wave: The Stock Market
Following swell for
”Wipeout” (--Surfaris, ‘63): ~The Debt~
Photo by Tó Mané
And on lower ground at the right, the three amigos Fitch, Moody’s and S&P are prepared to “cut” and run. After all, the Financial Times put it quite succinctly this past week: “US faces fresh financial shock” as now less than one month away is the so-called “sequester” to trim a cool trillion from federal spending over the next 10 years … which is on average some $100 billion per year … which in turn is about what the government spent every 10 days during 2012. Nary a dent in the overall scheme of things if you think about it.
Nonetheless, best those FOMC officials be rescued from atop that observation structure, lest they get washed asunder: we’re gonna need ‘em to accommodate the additional debt from raising the ceiling thereto, (and thus for the moment keep the three amigos at bay). Moreover, the good news here is that such imminent increase in financial fluff ought enjoy a raising as well for the price of Gold.
Financial fluff indeed. Through the eyes of the MainStreamMedia, all is right StateSide with its financial world. Our parents’ index “The Dow” has cleared 14,000 and is being chased by the masses to break its all time high, (that I believe is somewhere around 14,200), which according to ecstatic newscasters means that the economy is not just recovering, ‘tis indeed outright booming, with job creation soaring, and all ‘twouldn’t be so were God not president. At the risk of using a horribly overused adjective -- that fits so well here -- ‘tis unbelievable. In fact, I don’t really see it at all … do you? Here are the tracks of the Economy, (the “Econ Baro”), our S&P Moneyflow measurement and the S&P 500 itself for the last 63 trading days (three months):
Query: if the S&P is rising in the face of Q4 GDP having just gone backward, Personal Spending slowing, Jobless Claims leaping, New/Used/Pending Home Sales falling, as is Consumer Confidence, and now a net increase of 157,000 in non-farm payrolls being more than offset by 169,000 folks having left the workforce, just what is the stock market espying here? We know that it “discounts the future”, but now a third of the way into Q4 Earnings Season: we’ve 58% of companies improving their year-over-year quarterly bottom lines and thus 42% that are not. That’s “ok”, but hardly robust.
Rather, is the market putting on its “hedge against inflation” mantle? Were inflation -- the ultimate consequence of currency debasement -- about to take center stage, then to use some technical terminology, Gold stands on the verge of going upside gonzo nuts. Whether it soars at such a pace or not, ‘tis ever closer as we’ll herein see to tripping the weekly parabolic trend to the upside. But first, let us consider that notion of inflation for a moment.
You may remember from a mid-August missive our posting a chart of the yield on the Ten-Year Treasury Note. At that time, such yield was 1.816% and we noted that, at least technically, there was significant structural resistance up through 2.407%. Since then, the yield has backed up to now stand at 2.010%. That tells me ‘tis still quite early to be alarmed about rampant inflation. Of course we most boldly have real inflation in our healthcare premiums and in the cost of consumer goods and services. But ‘tis not really showing up in the cost of money itself. Here is the latest view of that 10-year T-Note yield via its weekly bars, the orange-boxed area denoting such structural resistance:
Given that things are not as rosy as are being reported out there, I’m anticipating such yield to “get stuck” in the low 2s and merely tip back over to the downside near-to-mid-term.
Still, Gold sensed a whiff of inflation when the non-farm payroll data were released yesterday (Friday) morning. Leaps of better than 10 points in less than 60 seconds are always a welcome sight…
…and by session’s end, Gold had scored for itself an up week. Now at 1669, the yellow metal rests 41 points below next week’s parabolic trip wire of 1711 per the rightmost of the declining red dots:
And from the Owning Up Dept., Gold did not re-achieve the 1700 level during January as I thought ‘twould, (only reaching as high as 1697). Such numbers are of course trifles, for once Gold embarks on the ensuing parabolic Long trend, we’ll be talking about going for the 1800s and beyond. There is no question that this has been one arduously slow parabolic Short trend, especially given that the last seven weeks have been simply sideways instead of down. Bit of a yawner to some, I suppose. However, they shall be awakened by the forthcoming fireworks as several technical measures could well turn positive almost simultaneously as we’ll subsequently show.
With respect to the downside adversity in this current parabolic Short trend -- now 14 weeks in duration since its being triggered on 02 November -- the most Gold has been down en route is -3.1%. That compares to downside adversity of -6.5% in the prior Short trend that ran for 20 weeks during Spring and Summer of last year, (which in terms of duration is the longest downside run since at least 2001). The point is this: boring as it may seem at the moment, don’t miss the next acceleration of the Gold Troops’ train back up through The Northern Front (1750-1800). ‘Tis already listed on the Departures Board in the rail station.
Now: turning the calendar page to a new month means ‘tis time to assess the year-over-year performance of Gold & Co. And if memory serves, this is the first time I’ve seen the entirety of the fraternity under water:
And talk about being bunched together: both Gold and the royalty company Royal Gold are off some 5%, whilst the Gold Bugs (HUI), Philly Exchange Precious Metals (XAU) and miners’ exchange-traded fund (GDX) are all off about 26%. Poor ole miners! Will they ever get an honest break?
High Time to take out the Value Line
-------------------------------------------------
Gold has spent enough time per this three-month view of chopping about below its smooth pearly valuation line, (a measure for Gold of its price movement relative to those in the markets that make up the BEGOS complex: Bond/Euro/Gold/Oil/S&P). Indeed, the smooth line’s descent is losing its bent…
…such that ‘tis time to make an ascent. Again, don’t get left at the station.
As for Gold’s 21-day linear regression trend, it remains on the up slant. The diagonal trend line’s ~consistency~ as measured by the “Baby Blues” shows those dots, after just having recently pulled back, beginning to now again curl northward:
So as noted earlier, there technically are positive protons in the pot here for Gold, such that several different measures could cause quite an acceleration higher in price. For example, should the Baby Blues stretch as they typically do upward to above 80% on that left-hand scale, we’ll have a truly well-defined linear regression up trend in place, meaning that in all likelihood, price will have also penetrated the valuation line to the upside, and as well have taken out the broader-based weekly parabolic measure to additionally have turned that trend northward, i.e. the piling on shall have commenced. (Did I mention not to miss out on this?)
Here is Gold’s latest trading profile, the current price there in red at 1669. Were the 1663 support level to hold firm next week -- and the current weekly weighted-average trading range of 42 points will out -- mathematically we’ll see 1700+ by Friday.
In closing, my favourite dormitory master from way back when had an expression that I enjoy using from time-to-time: “A word to the wise is sufficient”. ‘Tis alterable as well to say that: “A word from the wise is sufficient”. There are some fairly astute pro-Gold market fellows out there with such names as Faber, Gundlach, Rogers and Russell who are stock market cautious if not outright equities-negative. I hope in some way that which we’ve stumbled upon in our own analytics lends credence to their being justified. (If not, the Shorts shall be crucified). One thing is certain: the instant I become complacent, the whole thing’ll crash just as did those mammoth waves upon the Portuguese shore that we saw at the outset.
So Take Care Out There!
Cheers!
…m…
Prala do Norte, Nazaré, Portugal -- 28 January 2013
Observation structure: The Economy
Standing atop the structure: The FOMC
Surfer-boy Garrett McNamara: Joe Six Pack
Cresting one hundred-foot wave: The Stock Market
Following swell for
”Wipeout” (--Surfaris, ‘63): ~The Debt~Photo by Tó Mané
And on lower ground at the right, the three amigos Fitch, Moody’s and S&P are prepared to “cut” and run. After all, the Financial Times put it quite succinctly this past week: “US faces fresh financial shock” as now less than one month away is the so-called “sequester” to trim a cool trillion from federal spending over the next 10 years … which is on average some $100 billion per year … which in turn is about what the government spent every 10 days during 2012. Nary a dent in the overall scheme of things if you think about it.
Nonetheless, best those FOMC officials be rescued from atop that observation structure, lest they get washed asunder: we’re gonna need ‘em to accommodate the additional debt from raising the ceiling thereto, (and thus for the moment keep the three amigos at bay). Moreover, the good news here is that such imminent increase in financial fluff ought enjoy a raising as well for the price of Gold.
Financial fluff indeed. Through the eyes of the MainStreamMedia, all is right StateSide with its financial world. Our parents’ index “The Dow” has cleared 14,000 and is being chased by the masses to break its all time high, (that I believe is somewhere around 14,200), which according to ecstatic newscasters means that the economy is not just recovering, ‘tis indeed outright booming, with job creation soaring, and all ‘twouldn’t be so were God not president. At the risk of using a horribly overused adjective -- that fits so well here -- ‘tis unbelievable. In fact, I don’t really see it at all … do you? Here are the tracks of the Economy, (the “Econ Baro”), our S&P Moneyflow measurement and the S&P 500 itself for the last 63 trading days (three months):
Query: if the S&P is rising in the face of Q4 GDP having just gone backward, Personal Spending slowing, Jobless Claims leaping, New/Used/Pending Home Sales falling, as is Consumer Confidence, and now a net increase of 157,000 in non-farm payrolls being more than offset by 169,000 folks having left the workforce, just what is the stock market espying here? We know that it “discounts the future”, but now a third of the way into Q4 Earnings Season: we’ve 58% of companies improving their year-over-year quarterly bottom lines and thus 42% that are not. That’s “ok”, but hardly robust.
Rather, is the market putting on its “hedge against inflation” mantle? Were inflation -- the ultimate consequence of currency debasement -- about to take center stage, then to use some technical terminology, Gold stands on the verge of going upside gonzo nuts. Whether it soars at such a pace or not, ‘tis ever closer as we’ll herein see to tripping the weekly parabolic trend to the upside. But first, let us consider that notion of inflation for a moment.
You may remember from a mid-August missive our posting a chart of the yield on the Ten-Year Treasury Note. At that time, such yield was 1.816% and we noted that, at least technically, there was significant structural resistance up through 2.407%. Since then, the yield has backed up to now stand at 2.010%. That tells me ‘tis still quite early to be alarmed about rampant inflation. Of course we most boldly have real inflation in our healthcare premiums and in the cost of consumer goods and services. But ‘tis not really showing up in the cost of money itself. Here is the latest view of that 10-year T-Note yield via its weekly bars, the orange-boxed area denoting such structural resistance:
Given that things are not as rosy as are being reported out there, I’m anticipating such yield to “get stuck” in the low 2s and merely tip back over to the downside near-to-mid-term.
Still, Gold sensed a whiff of inflation when the non-farm payroll data were released yesterday (Friday) morning. Leaps of better than 10 points in less than 60 seconds are always a welcome sight…
…and by session’s end, Gold had scored for itself an up week. Now at 1669, the yellow metal rests 41 points below next week’s parabolic trip wire of 1711 per the rightmost of the declining red dots:
And from the Owning Up Dept., Gold did not re-achieve the 1700 level during January as I thought ‘twould, (only reaching as high as 1697). Such numbers are of course trifles, for once Gold embarks on the ensuing parabolic Long trend, we’ll be talking about going for the 1800s and beyond. There is no question that this has been one arduously slow parabolic Short trend, especially given that the last seven weeks have been simply sideways instead of down. Bit of a yawner to some, I suppose. However, they shall be awakened by the forthcoming fireworks as several technical measures could well turn positive almost simultaneously as we’ll subsequently show.
With respect to the downside adversity in this current parabolic Short trend -- now 14 weeks in duration since its being triggered on 02 November -- the most Gold has been down en route is -3.1%. That compares to downside adversity of -6.5% in the prior Short trend that ran for 20 weeks during Spring and Summer of last year, (which in terms of duration is the longest downside run since at least 2001). The point is this: boring as it may seem at the moment, don’t miss the next acceleration of the Gold Troops’ train back up through The Northern Front (1750-1800). ‘Tis already listed on the Departures Board in the rail station.
Now: turning the calendar page to a new month means ‘tis time to assess the year-over-year performance of Gold & Co. And if memory serves, this is the first time I’ve seen the entirety of the fraternity under water:
And talk about being bunched together: both Gold and the royalty company Royal Gold are off some 5%, whilst the Gold Bugs (HUI), Philly Exchange Precious Metals (XAU) and miners’ exchange-traded fund (GDX) are all off about 26%. Poor ole miners! Will they ever get an honest break?
High Time to take out the Value Line
-------------------------------------------------
Gold has spent enough time per this three-month view of chopping about below its smooth pearly valuation line, (a measure for Gold of its price movement relative to those in the markets that make up the BEGOS complex: Bond/Euro/Gold/Oil/S&P). Indeed, the smooth line’s descent is losing its bent…
…such that ‘tis time to make an ascent. Again, don’t get left at the station.
As for Gold’s 21-day linear regression trend, it remains on the up slant. The diagonal trend line’s ~consistency~ as measured by the “Baby Blues” shows those dots, after just having recently pulled back, beginning to now again curl northward:
So as noted earlier, there technically are positive protons in the pot here for Gold, such that several different measures could cause quite an acceleration higher in price. For example, should the Baby Blues stretch as they typically do upward to above 80% on that left-hand scale, we’ll have a truly well-defined linear regression up trend in place, meaning that in all likelihood, price will have also penetrated the valuation line to the upside, and as well have taken out the broader-based weekly parabolic measure to additionally have turned that trend northward, i.e. the piling on shall have commenced. (Did I mention not to miss out on this?)
Here is Gold’s latest trading profile, the current price there in red at 1669. Were the 1663 support level to hold firm next week -- and the current weekly weighted-average trading range of 42 points will out -- mathematically we’ll see 1700+ by Friday.
In closing, my favourite dormitory master from way back when had an expression that I enjoy using from time-to-time: “A word to the wise is sufficient”. ‘Tis alterable as well to say that: “A word from the wise is sufficient”. There are some fairly astute pro-Gold market fellows out there with such names as Faber, Gundlach, Rogers and Russell who are stock market cautious if not outright equities-negative. I hope in some way that which we’ve stumbled upon in our own analytics lends credence to their being justified. (If not, the Shorts shall be crucified). One thing is certain: the instant I become complacent, the whole thing’ll crash just as did those mammoth waves upon the Portuguese shore that we saw at the outset.
So Take Care Out There!
Cheers!
…m…
www.rpshares.com
India’s 2012-13 GDP growth seen growing just 5% y/y: govt
India’s gross domestic product (GDP) is estimated to grow an annual 5.0 percent in the 2012/13 fiscal year, a government statement said on Thursday, citing provisional estimates.
The latest estimate is the worst of all growth projections issued by the government and the central bank. Last month, the central bank had pared the GDP growth estimate for the fiscal year ending in March to 5.5 percent, the worst since 2002/03.
India’s farm output is expected to grow 1.8 percent, while manufacturing sector is seen growing an estimated 1.9 percent in the current fiscal year that ends in March.
India’s economy grew at 6.2 percent each in the last fiscal years, revised data from the government showed.
India’s gross domestic product (GDP) is estimated to grow an annual 5.0 percent in the 2012/13 fiscal year, a government statement said on Thursday, citing provisional estimates.
The latest estimate is the worst of all growth projections issued by the government and the central bank.
Energy Stocks & Oil Special Trend Analysis Report
If you look at the weekly investing chart of crude oil the key support and resistance levels area clearly marked. A breakout of the white pennant will trigger a move to the next support or resistance level. And judging from the positive economic numbers not only form the USA but globally the odds are increased for the $110+ price target to be reached sooner than later.
Where are the Stops? . Gold and Silver
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Below are today’s likely price locations of buy and sell stop orders for the active Comex gold and silver futures markets. The asterisks (**) denote the most critical stop order placement level of the day (or likely where the heaviest concentration of stop orders are placed on this day).
See below a detailed explanation of stop orders and why knowing, beforehand, where they are likely located can be beneficial to a trader.
April Gold Buy Stops Sell Stops
$1,687.00 $1,668.80
$1,690.00 $1,661.80
**$1.700.00 **$1,653.20
$1,706.00 $1,650.00
March Silver Buy Stops Sell Stops
$32.115 $31.605
$32.30 $31.385
**$32.485 $31.00
$32.80 **$30.745
Stop Orders Defined
Stop orders in trading markets can be used for three purposes: One: To minimize a loss on a long or short position (protective stop). Two: To protect a profit on an existing long or short position (protective stop). Three: To initiate a new long or short position. A buy stop order is placed above the market and a sell stop order is placed below the market. Once the stop price is touched, the order is treated like a “market order” and will be filled at the best possible price.
Most stop orders are located and placed based upon key technical support or resistance levels on the daily chart, which if breached, would significantly change the near-term technical posture of that market.
Having a good idea, beforehand, where the buy and sell stops are located can give an active trader a better idea regarding at what price level buying or selling pressure will become intensified in that market.
The major advantage of using protective stops is that, before a trade is initiated, you have a pretty good idea of where you will be getting out of the trade if it's a loser. If the trade becomes a winner and profits begin to accrue, you may want to employ "trailing stops," whereby protective stops are adjusted to help lock in a profit should the market turn against your position.
Crude Oil Price Chart – Daily short term Analysis & Target
If we zoom into the daily chart and analyze price and volume you will notice the $100 per barrel level is potentially only 2-3 days way… But keep in mind whole numbers (decade & Century Numbers) naturally act as support and resistance levels. So when the $100 century price is reached there will be a wave of sellers with fat thumbs who will slam the price back down to the $96 and possibly back down to the $92 level before oil continues higher.
Precious Metals & Miners Making Waves and New Trends
The precious metals sector has been dormant since both gold and silver topped in 2011. But the long term bull market remains intact. As long as we do not have the price of gold close below the lower yellow box on the monthly chart then technical speaking precious metals should continue much higher.
Large consolidation periods (yellow boxes) provide investors with great insight for investments looking forward 6-18 monthsupon a breakout in either direction (up or down). The issue with investing during these times is the passage of time. One can hold a position for months and sometimes years having their investments fluctuate adding extra stress to their life when they really do not need to.
Once a breakout takes place a powerful rally or decline will start putting an investors’ money to work within days of committing to that particular investment compared to money invested waiting months for the breakout and new capital gains to occur.
Large consolidation periods (yellow boxes) provide investors with great insight for investments looking forward 6-18 monthsupon a breakout in either direction (up or down). The issue with investing during these times is the passage of time. One can hold a position for months and sometimes years having their investments fluctuate adding extra stress to their life when they really do not need to.
Once a breakout takes place a powerful rally or decline will start putting an investors’ money to work within days of committing to that particular investment compared to money invested waiting months for the breakout and new capital gains to occur.
Precious Metals & Miners Making Waves and New Trends
Silver remains in a long term bull market much like the monthly chart of gold shown earlier in this report. Silver continues to work its way through a large bull flag pattern with a positive outlook at this time.
Silver Price Chart – Daily
Silver Price Chart – Daily
Precious Metals & Miners Making Waves and New Trends
Gold Price Chart – Daily
The chart of gold continues to form a large bull flag pattern with a potential 3 or 5 wave correction. If price reverses this week and breaks above the upper resistance trend line then it will be a 3 (ABC) wave correction which is very bullish. But there is potential for a full 5 wave correction which is still bullish, but it just means we have another month or two before metals bottom.
Daily chart
The chart of gold continues to form a large bull flag pattern with a potential 3 or 5 wave correction. If price reverses this week and breaks above the upper resistance trend line then it will be a 3 (ABC) wave correction which is very bullish. But there is potential for a full 5 wave correction which is still bullish, but it just means we have another month or two before metals bottom.
Daily chart
Trading Strategy for 7th Feb’13.Last Hope for Bull’s at 5944.Tomorrow watch Unexpected level
My Millionaire Trader Friend has taught me that even the best traders, like him, are sometimes caught on the wrong side of the market. There is no need to panic when this happens, but once it does a very good thing to do is to simply get out. Once you realize that your trade was not a good idea, there is no need to wait for your stoploss to get hit, when you know you have made the wrong move you can simply get out of the market and wait for the next trade.
This is what I have learned from my Millionaire Trader Friend – if you are absolutely certain that you made the wrong move, sometimes the best thing to do is to exit the market and then place a trade in the opposite direction. This can be extremely difficult to do, particularly if you have put a lot of time and effort into analyzing the trade.
-Yesterday our Hurdles were @ 6003—6013.It kissed High of 5993 & Fallen back !!
(Real Dirty Volume in Nifty Future )
Yes ,5963 will act as CRUCIAL Support……………Decisive Break with volumes and stays below will take to 5910—5893 level in PANIC !
Three Consecutive close below 5944 level Will take to 5838——————-5803 level
Hurdle @ 6003————6013.Decisive Crossover with volumes will create firework ,Yes will Update more to our Subscribers during trading hrs.
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