Best of the Week
Most Popular
1. Investing in a Bubble Mania Stock Market Trending Towards Financial Crisis 2.0 CRASH! - 9th Sep 21
2.Tech Stocks Bubble Valuations 2000 vs 2021 - 25th Sep 21
3.Stock Market FOMO Going into Crash Season - 8th Oct 21
4.Stock Market FOMO Hits September Brick Wall - Evergrande China's Lehman's Moment - 22nd Sep 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
7.AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
8.Why Silver Price Could Crash by 20%! - 5th Oct 21
9.Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
10.Global Stock Markets Topped 60 Days Before the US Stocks Peaked - 23rd Sep 21
Last 7 days
Inflation Consequences for the Stock Market, FED Balance Sheet - 24th Oct 21
To Be or Not to Be: How the Evergrande Crisis Can Affect Gold Price - 24th Oct 21
During a Market Mania, "no prudent professional is perceived to add value" - 24th Oct 21
Stock Market S&P500 Rallies Above $4400 – May Attempt To Advance To $4750~$4800 - 24th Oct 21
Inflation and the Crazy Crypto Markets - 23rd Oct 21
Easy PC Upgrades with Motherboard Combos - Overclockers UK Unboxing - MB, Memory and Ryzen 5600x CPU - 23rd Oct 21
Gold Mining Stocks Q3 2021 - 23rd Oct 21
Gold calmly continues cobbling its Handle, Miners lay in wait - 23rd Oct 21
US Economy Has Been in an Economic Depression Since 2008 - 22nd Oct 21
Extreme Ratios Point to Gold and Silver Price Readjustments - 22nd Oct 21
Bitcoin $100K or Ethereum $10K—which happens first? - 22nd Oct 21
This Isn’t Sci-Fi: How AI Is About To Disrupt This $11 Trillion Industry - 22nd Oct 21
Ravencoin RVN About to EXPLODE to NEW HIGHS! Last Chance to Buy Before it goes to the MOON! - 21st Oct 21
Stock Market Animal Spirits Returning - 21st Oct 21
Inflation Advances, and So Does Gold — Except That It Doesn’t - 21st Oct 21
Why A.I. Is About To Trigger The Next Great Medical Breakthrough - 21st Oct 21
Gold Price Slowly Going Nowhere - 20th Oct 21
Shocking Numbers Show Government Crowding Out Real Economy - 20th Oct 21
Crude Oil Is in the Fast Lane, But Where Is It Going? - 20th Oct 21
3 Tech Stocks That Could Change The World - 20th Oct 21
Best AI Tech Stocks ETF and Investment Trusts - 19th Oct 21
Gold Mining Stocks: Will Investors Dump the Laggards? - 19th Oct 21
The Most Exciting Medical Breakthrough Of The Decade? - 19th Oct 21
Prices Rising as New Dangers Point to Hard Assets - 19th Oct 21
It’s not just Copper; GYX indicated cyclical the whole time - 19th Oct 21
Chinese Tech Stocks CCP Paranoia, VIES - Variable Interest Entities - 19th Oct 21
Inflation Peaked Again, Right? - 19th Oct 21
Gold Stocks Bouncing Hard - 19th Oct 21
Stock Market New Intermediate Bottom Forming? - 19th Oct 21
Beware, Gold Bulls — That’s the Beginning of the End - 18th Oct 21
Gold Price Flag Suggests A Big Rally May Start Soon - 18th Oct 21
Inflation Or Deflation – End Result Is Still Depression - 18th Oct 21
A.I. Breakthrough Could Disrupt the $11 Trillion Medical Sector - 18th Oct 21
US Economy and Stock Market Addicted to Deficit Spending - 17th Oct 21
The Gold Price And Inflation - 17th Oct 21
Went Long the Crude Oil? Beware of the Headwinds Ahead… - 17th Oct 21
Watch These Next-gen Cloud Computing Stocks - 17th Oct 21
Overclockers UK Custom Built PC 1 YEAR Use Review Verdict - Does it Still Work? - 16th Oct 21
Altonville Mine Tours Maze at Alton Towers Scarefest 2021 - 16th Oct 21
How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
The Only way to Crush Inflation (not stocks) - 14th Oct 21
Why "Losses Are the Norm" in the Stock Market - 14th Oct 21
Sub Species Castle Maze at Alton Towers Scarefest 2021 - 14th Oct 21
Which Wallet is Best for Storing NFTs? - 14th Oct 21
Ailing UK Pound Has Global Effects - 14th Oct 21
How to Get 6 Years Life Out of Your Overclocked PC System, Optimum GPU, CPU and MB Performance - 13th Oct 21
The Demand Shock of 2022 - 12th Oct 21
4 Reasons Why NFTs Could Be The Future - 12th Oct 21
Crimex Silver: Murder Most Foul - 12th Oct 21
Bitcoin Rockets In Preparation For Liftoff To $100,000 - 12th Oct 21
INTEL Tech Stock to the MOON! INTC 2000 vs 2021 Market Bubble WARNING - 11th Oct 21
AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
Stock Market Wall of Worry Meets NFPs - 11th Oct 21
Stock Market Intermediate Correction Continues - 11th Oct 21
China / US Stock Markets Divergence - 10th Oct 21
Can US Save Taiwan From China? Taiwan Strait Naval Battle - PLA vs 7th Fleet War Game Simulation - 10th Oct 21
Gold Price Outlook: The Inflation Chasm Between Europe and the US - 10th Oct 21
US Real Estate ETFs React To Rising Housing Market Mortgage Interest Rates - 10th Oct 21
US China War over Taiwan Simulation 2021, Invasion Forecast - Who Will Win? - 9th Oct 21
When Will the Fed Taper? - 9th Oct 21
Dancing with Ghouls and Ghosts at Alton Towers Scarefest 2021 - 9th Oct 21
Stock Market FOMO Going into Crash Season - 8th Oct 21
Scan Computers - Custom Build PC 6 Months Later, Reliability, Issues, Quality of Tech Support Review - 8th Oct 21
Gold and Silver: Your Financial Main Battle Tanks - 8th Oct 21
How to handle the “Twin Crises” Evergrande and Debt Ceiling Threatening Stocks - 8th Oct 21
Why a Peak in US Home Prices May Be Approaching - 8th Oct 21
Alton Towers Scarefest is BACK! Post Pandemic Frights Begin, What it's Like to Enter Scarefest 2021 - 8th Oct 21
AJ Bell vs II Interactive Investor - Which Platform is Best for Buying US FAANG Stocks UK Investing - 7th Oct 21
Gold: Evergrande Investors' Savior - 7th Oct 21
Here's What Really Sets Interest Rates (Not Central Banks) - 7th Oct 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Silver Outperforming Gold 2-1

Commodities / Gold & Silver 2009 Oct 11, 2009 - 02:09 PM GMT

By: Merv_Burak

Commodities

Best Financial Markets Analysis ArticleIt was gang-busters for the precious metal stocks.  Gold rose almost 5% while silver almost doubled that performance.  We are into new high territory and the analyst predictions are now all over the place.  Predictions are good, performance is even better.  Stay tuned.

GOLD LONG TERM

Let’s do a little catch-up summary of where we are from the long or very long term point of view.  First, the P&F charts. 


My very long term ($25 unit) P&F chart, shown here a few weeks back, provides us with new price projections only rarely.  It has given us one this past week.  Because they are rare one should not forget about them during on going trading activities.  As mentioned in my 11 Sept 2009 analysis once the price hits $1050 (which it did this past week) then we would have a new price projection to the $2050 level.  However, before we jump ahead of ourselves there still is that original projection from the 2003 break to the $1075 level.  This level was not quite reached this past week and needs to be taken out by the price action before we can dream towards the $2050 level.  There was a second projection calculated during that initial 2003 break-out and that was to the $1575 level.  So we have a couple of steps on the way to the $2050 price.

As for my normal long term charts and indicators, everything continues to look rosy.  The gold price remains well above its positive sloping moving average line and the momentum indicator remains in its positive zone above its positive trigger line.  The volume indicator continues to move ever higher into new high territory (where it entered ahead of the price move into new highs) and above its positive trigger line.  Nothing here to worry about from the long term perspective.  The rating remains BULLISH.

INTERMEDIATE TERM

My intermediate/short term P&F chart shown last week was very close to giving us a bearish break but quickly turned around and headed into new high ground.  These lower time period P&F charts give us more frequent and lower value projections.  They are accurate but as it is normal for the intermediate and shorter term trends to reverse up and down while on a very long term trajectory they do get reversed before they get met.  They also provide us with many more projections than do the very long term charts.  From this P&F chart the best I can calculate as an intermediate term projection would be to the $1195 level.  There are a couple of earlier projections but this is the best so far. 

Projections are only a guide, not a prediction.  They are only for reference purposes and should never be used as trading or investing targets.  Let the on going market action be your trading or investing guide.

As you can expect after the action this past week all the normal intermediate term charts and indicators are on the positive side.  The price is above its positive sloping moving average line and the momentum indicator is in its positive zone above its positive trigger line.  The volume indicator is also in a positive mode being above its positive sloping trigger line.  From the intermediate term perspective the rating remains BULLISH.  For confirmation, the short term moving average line remains above the intermediate term line, as it has remained since mid July.

SHORT TERM

                     

The short term position of the gold price is no secret after last week’s action.  What will it do this week is the big question.  Just to run down the short term indicators, gold is above its positive sloping moving average line and the momentum indicator is way in its positive zone.  In fact the momentum had entered its overbought zone and it looks like it is now reacting lower and just about to break below its overbought line.  If it does that we just might see some downside action ahead.  It may or may not end up to be anything serious so should that happen we will just have to watch the action and see where it goes.  The daily volume action seems to be inconsistent.  It is bouncing above and below its 15 day moving average line without any real direction.  All in all the short term rating is BULLISH.  The very short term moving average line is sharply moving higher above the short term line for confirmation of this rating.

Now, you want to know what happens next.  The best indication of any immediate change in trend is to look at the Stochastic Oscillator for a possible clue.  Here we see the SO in its overbought zone and already on the decline.  It has moved below its trigger line and the trigger has turned downward.  The implication, at this time, is for a short lateral period or maybe even a reaction but most likely with the SO still remaining in its positive zone.  Any short term reaction might see gold with a support at the $1025 level.

SILVER

          

Once more silver appears to be on the March.  While gold advanced 4.7% last week silver made it a double by advancing 9.5%.  Still, silver is some distance from its previous high while gold is making it into all time highs.  Silver’s previous high isn’t even its all time high.  That came during the late 70’s and early 80’s (at around $50) when the Hunt brothers tried to corner silver, well they said they weren’t cornering silver but that was their effect.  It’s an interesting story and one should read it some times.  Just google silver corner and the hunt brothers.

As with gold everything here looks gung ho positive for all three time periods.  I said “looks” because there is a warning cloud present.   My short and intermediate term momentum indicators have not confirmed the price move into new highs and both appear to be topping out creating a negative divergence versus the price action.  This is just too often a precursor to a price downside reaction not to take serious notice of it.  I would be inclined not to commit any further capital on the buy side until this warning situation clears itself up.  This is more of a time to be sure your exit strategy is operative.  The more aggressive speculator might even be starting to check out some short positions, but not to act on them until the turn in price actually starts.

PRECIOUS METAL STOCKS

First, just a quick mention of my Penny Arcade Index (see the Index chart last week).  It has moved into new all time high territory exceeding its previous high set in April of 2007 just before its bear market move.  It is now up 646% above its Nov 2008 bear market low.  This is not a result of one or two heavily weighted stocks performing great.  It is the AVERAGE performance of ALL 30 component stocks in the Index.  As you can imagine, there are numerous 10 and 20 baggers in the list already.  Many more ready to perform.  These “pennies”, the real cats and dogs of the industry, continue to move.  My view is that as long as these dogs continue to be popular with speculators and gamblers the bull market in the vast majority of quality and secondary stocks is not yet over.  There may be stumbling periods along the way but my opinion is that the pennies will provide the advance warning that the rest of the market is moving towards an end.  That advance warning is not yet here.

As for the vast universe of gold and silver stocks, this past week was a welcome event especially following a similar week from a month back.  Out of the 160 stocks in my weekly universe a full 147 or 92% were on the up side while only 10 or 6% were on the down side.  A similar situation exists in all major North American gold Indices.  Every gold service should be able to boast of their winners this past week as almost no stock was spared from advancing.  All North American Indices advanced anywhere from 10% to 13% this past week except the Merv’s Qual-Gold Index and the S&P/TSX Global Gold Index.  Both were adversely affected by the strength in the Canadian dollar versus the U.S. dollar.  This had the effect of lowering the prices of Canadian traded gold shares as it took less movement in Canadian stocks to equal a similar move in U.S. stocks.  The one Index outside of the 10% to 13% range, on the up side, was Merv’s Spec-Silver Index with a gain of 14.6%.  Silver was a big winner this past week and the speculative silver stocks moved.  If we took the exchange rate into consideration this was the equivalent of an 18% move in U.S. value.

One cautionary indicator to consider.  Most Merv’s and major North American Indices have their momentum indicators showing a potential slight negative divergence.  Nothing serious yet but just something to keep an eye out for.

U.S. Dollar Index

The U.S. dollar is trading just above the 76 level and continues to show weakness.  It appears to be heading towards a test of its previous 71 low from early 2008.  As most traders expect that this weakness in the U.S. $ has a positive impact on the value of gold one should be expecting their actions to then keep the price of gold moving higher.  Should the U.S. $ rally then gold should stabilize or move lower.  So, watch the actions of the U.S. $ over the coming months.  With the U.S. debt not about to get any smaller, can the U.S. $ do anything but go lower?

MERV’S PRECIOUS METALS INDICES TABLE

Well, that’s it for another week.

By Merv Burak, CMT
Hudson Aero/Systems Inc.
Technical Information Group
for Merv's Precious Metals Central

For DAILY Uranium stock commentary and WEEKLY Uranium market update check out my new Technically Uranium with Merv blog at http://techuranium.blogspot.com .

During the day Merv practices his engineering profession as a Consulting Aerospace Engineer. Once the sun goes down and night descends upon the earth Merv dons his other hat as a Chartered Market Technician ( CMT ) and tries to decipher what's going on in the securities markets. As an underground surveyor in the gold mines of Canada 's Northwest Territories in his youth, Merv has a soft spot for the gold industry and has developed several Gold Indices reflecting different aspects of the industry. As a basically lazy individual Merv's driving focus is to KEEP IT SIMPLE .

To find out more about Merv's various Gold Indices and component stocks, please visit http://preciousmetalscentral.com . There you will find samples of the Indices and their component stocks plus other publications of interest to gold investors.

Before you invest, Always check your market timing with a Qualified Professional Market Technician

Merv Burak Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in