Best of the Week
Most Popular
1. Market Decline Will Lead To Pension Collapse, USD Devaluation, And NWO - Raymond_Matison
2.Uber’s Nightmare Has Just Started - Stephen_McBride
3.Stock Market Crash Black Swan Event Set Up Sept 12th? - Brad_Gudgeon
4.GDow Stock Market Trend Forecast Update - Nadeem_Walayat
5.Gold Significant Correction Has Started - Clive_Maund
6.British Pound GBP vs Brexit Chaos Timeline - Nadeem_Walayat
7.Cameco Crash, Uranium Sector Won’t Catch a break - Richard_Mills
8.Recession 2020 Forecast : The New Risks & New Profits Of A Grand Experiment - Dan_Amerman
9.Gold When Global Insanity Prevails - Michael Ballanger
10.UK General Election Forecast 2019 - Betting Market Odds - Nadeem_Walayat
Last 7 days
What Happens To The Global Economy If the Oil Price Collapses Below $40 - 14th Nov 19
7 days of Free FX + Crypto Forecasts -- Join in - 14th Nov 19
How to Use Price Cycles and Profit as a Swing Trader – SPX, Bonds, Gold, Nat Gas - 13th Nov 19
Morrisons Throwing Thousands of Bonus More Points at Big Spend Shoppers - JACKPOT! - 13th Nov 19
What to Do NOW in Case of a Future Banking System Breakdown - 13th Nov 19
Why China is likely to remain the ‘world’s factory’ for some time to come - 13th Nov 19
Gold Price Breaks Down, Waving Good-bye to the 2019 Rally - 12th Nov 19
Fed Can't See the Bubbles Through the Lather - 12th Nov 19
Double 11 Record Sales Signal Strength of Chinese Consumption - 12th Nov 19
Welcome to the Zombie-land Of Oil, Gold and Stocks Investing – Part II - 12th Nov 19
Gold Retest Coming - 12th Nov 19
New Evidence Futures Markets Are Built for Manipulation - 12th Nov 19
Next 5 Year Future Proof Gaming PC Build Spec November 2019 - Ryzen 9 3900x, RTX 2080Ti... - 12th Nov 19
Gold and Silver - The Two Horsemen - 11th Nov 19
Towards a Diverging BRIC Future - 11th Nov 19
Welcome to the Zombie-land Of Stock Market Investing - 11th Nov 19
Illiquidity & Gold And Silver In The End Game - 11th Nov 19
Key Things You Need to Know When Starting a Business - 11th Nov 19
Stock Market Cycles Peaking - 11th Nov 19
Avoid Emotional Investing in Cryptocurrency - 11th Nov 19
Australian Lithium Mines NOT Viable at Current Prices - 10th Nov 19
The 10 Highest Paying Jobs In Oil & Gas - 10th Nov 19
World's Major Gold Miners Target Copper Porphyries - 10th Nov 19
AMAZON NOVEMBER 2019 BARGAIN PRICES - WD My Book 8TB External Drive for £126 - 10th Nov 19
Gold & Silver to Head Dramatically Higher, Mirroring Palladium - 9th Nov 19
How Do YOU Know the Direction of a Market's Larger Trend? - 9th Nov 19
BEST Amazon SMART Scale To Aid Weight Loss for Christmas 2019 - 9th Nov 19
Why Every Investor Should Invest in Water - 8th Nov 19
Wait… Was That a Bullish Silver Reversal? - 8th Nov 19
Gold, Silver and Copper The 3 Metallic Amigos and the Macro Message - 8th Nov 19
Is China locking up Indonesian Nickel? - 8th Nov 19
Where is the Top for Natural Gas? - 7th Nov 19
Why Fractional Shares Don’t Make Sense - 7th Nov 19
The Fed Is Chasing Its Own Tail; It Doesn’t Care What You Think - 7th Nov 19
China’s path from World’s Factory to World Market - 7th Nov 19
Where Is That Confounded Recession? - 7th Nov 19
FREE eBook - The Investment Strategy that could change your future - 7th Nov 19

Market Oracle FREE Newsletter

How To Buy Gold For $3 An Ounce

Stock Market, An Up and Down Day

Stock-Markets / Stock Markets 2010 Mar 22, 2010 - 07:22 PM GMT

By: Steve_Betts

Stock-Markets

Best Financial Markets Analysis ArticleIt’s been an interesting start to the week as the Dow opened lower and looked like it could fall even more. Now the Dow is up 45 points. Meanwhile the US dollar rallied all the way up top 81.34, just above strong resistance at 81.32, only to fall back down into negative territory by noon time. Then there was gold! As the US dollar rallied, gold fell down to test strong support at 1,090.10, only to bounce back later in the morning. At 1:15 pm EST the April gold is trading at 1,104.00 down 3.00 for the session.


Some of the volatility is due to the fact that it appears the health care bill is gaining support and could now pass both houses of Congress. This means more debt and more bureaucracy to produce a system that won’t work and most people don’t want. The government has been an inefficient administrator up until now, and there is no indication that heath care will be any different. All the government knows how to do is create debt.   

With respect to gold, we are seeing some interesting developments in the daily chart. The first feature of interest is the formation of a small head-and-shoulders formation on the right hand side. The neckline comes in right around 1,106.00 and we were trading significantly below it earlier today. Right now gold is trading two dollars under the neckline and it remains to be seen where we’ll close. Should gold recover all of its early morning losses to trade in positive territory, it would a positive signal indicating that real strength exists in the market:

Note also that should gold hold here we would have another higher low on a closing bases. Gold has decent support at the 1,107.00 area and we always seem to find buyers whenever the price dips below it. The technical facets of the market still look weak to me with gold trading below the 50-dma and both RSI as well as MACD headed lower. What I do find interesting, and it’s something no one writes about, is how easily gold falls when the Dow turns lower and the early morning activity was a case in point.

While gold is trying to hang on, the HUI is actually doing quite nicely. It continues to hold above decent support at 398.58, but has yet to break out above strong resistance at 427.32 and has two failed attempts to its credit. Right now the HUI is trading in a narrow range that runs from 411.00 on up to 427.00 as you can see in the following chart:

Like gold we can see that RSI, MACD, and the histogram have all turned down, but the HUI is still managing to stay above the 50-dma. Individual stocks that I follow like Goldcorp, Buenaventura, and Silver Wheaton are all in a similar position and, like the Dow last week, I expect the short term direction of gold, silver and gold stocks will be resolved sometime this week.

Another market that will influence the direction of gold is the US dollar. After testing good Fibonacci support at 79.62 for four sessions last week, the dollar turned higher and this morning tested strong resistance at 81.32 for the third time (see green arrows): 

That test now appears to have failed miserably as the spot US Dollar Index is trading down .10 at 80.65. The new high today apparently completed the third day of a first degree reaction and now the dollar is backing off. Should the dollar continue lower here, it would mean another test of good support at 79.62 and I would be surprised to see it hold this time around.

By Steve Betts

E-mail:  team@thestockmarketbarometer.com
Web site: www.thestockmarketbarometer.com

The Stock Market Barometer: Properly Applied Information Is Power

Through the utilization of our service you'll begin to grasp that the market is a forward looking instrument. You'll cease to be a prisoner of the past and you'll stop looking to the financial news networks for answers that aren't there. The end result is an improvement in your trading account. Subscribers will enjoy forward looking Daily Reports that are not fixated on yesterday's news, complete with daily, weekly, and monthly charts. In addition, you'll have a password that allows access to historical information that is updated daily. Read a sample of our work, subscribe, and your service will begin the very next day

© 2010 Copyright The Stock Market Barometer- All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 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

6 Critical Money Making Rules