Best of the Week
Most Popular
1. Stock Markets and the History Chart of the End of the World (With Presidential Cycles) - 28th Aug 20
2.Google, Apple, Amazon, Facebook... AI Tech Stocks Buying Levels and Valuations Q3 2020 - 31st Aug 20
3.The Inflation Mega-trend is Going Hyper! - 11th Sep 20
4.Is this the End of Capitalism? - 13th Sep 20
5.What's Driving Gold, Silver and What's Next? - 3rd Sep 20
6.QE4EVER! - 9th Sep 20
7.Gold Price Trend Forecast Analysis - Part1 - 7th Sep 20
8.The Fed May “Cause” The Next Stock Market Crash - 3rd Sep 20
9.Bitcoin Price Crash - You Will be Suprised What Happens Next - 7th Sep 20
10.NVIDIA Stock Price Soars on RTX 3000 Cornering the GPU Market for next 2 years! - 3rd Sep 20
Last 7 days
Silver Is Close To Something Big - 2nd Mar 21
Bitcoin: Let's Put 2 Heart-Pounding Price Drops into Perspective - 2nd Mar 21
Gold Stocks Spring Rally 2021 - 2nd Mar 21
US Housing Market Trend Forecast 2021 - 2nd Mar 21
Covid-19 Vaccinations US House Prices Trend Indicator 2021 - 2nd Mar 21
How blockchain technology will change the online casino - 2nd Mar 21
How Much PC RAM Memory is Good in 2021, 16gb, 32gb or 64gb? - 2nd Mar 21
US Housing Market House Prices Momentum Analysis - 26th Feb 21
FOMC Minutes Disappoint Gold Bulls - 26th Feb 21
Kiss of Life for Gold - 26th Feb 21
Congress May Increase The Moral Hazard Building In The Stock Market - 26th Feb 21
The “Oil Of The Future” Is Set To Soar In 2021 - 26th Feb 21
The Everything Stock Market Rally Continues - 25th Feb 21
Vaccine inequality: A new beginning or another missed opportunity? - 25th Feb 21
What's Next Move For Silver, Gold? Follow US Treasuries and Commodities To Find Out - 25th Feb 21
Warren Buffett Buys a Copper Stock! - 25th Feb 21
Work From Home Inflationary US House Prices BOOM! - 25th Feb 21
Man Takes First Steps Towards Colonising Mars - Nasa Perseverance Rover in Jezero Crater - 25th Feb 21
Musk, Bezos And Cook Are Rushing To Lock In New Lithium Supply - 25th Feb 21
US Debt and Yield Curve (Spread between 2 year and 10 year US bonds) - 24th Feb 21
Should You Buy a Landrover Discovery Sport in 2021? - 24th Feb 21
US Housing Market 2021 and the Inflation Mega-trend - QE4EVER! - 24th Feb 21
M&A Most Commonly Used Software - 24th Feb 21
Is More Stock Market Correction Needed? - 24th Feb 21
VUZE XR Camera 180 3D VR Example Footage Video Image quality - 24th Feb 21
How to Protect Your Positions From A Stock Market Sell-Off Using Options - 24th Feb 21
Why Isn’t Retail Demand for Silver Pushing Up Prices? - 24th Feb 21
2 Stocks That Could Win Big In The Trillion Dollar Battery War - 24th Feb 21
US Economic Trends - GDP, Inflation and Unemployment Impact on House Prices 2021 - 23rd Feb 21
Why the Sky Is Not Falling in Precious Metals - 23rd Feb 21
7 Things Every Businessman Should Know - 23rd Feb 21
For Stocks, has the “Rational Bubble” Popped? - 23rd Feb 21
Will Biden Overheat the Economy and Gold? - 23rd Feb 21
Precious Metals Under Seige? - 23rd Feb 21
US House Prices Trend Forecast Review - 23rd Feb 21
Lithium Prices Soar As Tesla, Apple And Google Fight For Supply - 23rd Feb 21
Stock Markets Discounting Post Covid Economic Boom - 22nd Feb 21
Economics Is Why Vaccination Is So Hard - 22nd Feb 21
Pivotal Session In Stocks Bull Bear Battle - 22nd Feb 21
Gold’s Downtrend: Is This Just the Beginning? - 22nd Feb 21
The Most Exciting Commodities Play Of 2021? - 22nd Feb 21
How to Test NEW and Used GPU, and Benchmark to Make sure it is Working Properly - 22nd Feb 21
US House Prices Vaccinations Indicator - 21st Feb 21
S&P 500 Correction – No Need to Hold Onto Your Hat - 21st Feb 21
Gold Setting Up Major Bottom So Could We See A Breakout Rally Begin Soon? - 21st Feb 21
Owning Real Assets Amid Surreal Financial Markets - 21st Feb 21
Great Investment Ideas For 2021 - 21st Feb 21
US House Prices Momentum Analysis - 20th Feb 21
The Most Important Chart in Housing Right Now - 20th Feb 21
Gold Is the Ultimate Reserve Asset - 20th Feb 21
Is That the S&P 500 And Gold Correction Finally? - 20th Feb 21
Technical Analysis of EUR/USD - 20th Feb 21
The Stock Market Big Picture - 19th Feb 21
Could Silver "Do a Palladium"? - 19th Feb 21
Three More Reasons We Love To Trade Options! - 19th Feb 21
Here’s What’s Eating Away at Gold - 19th Feb 21
Stock Market March Melt-Up Madness - 19th Feb 21
Land Rover Discovery Sport Extreme Ice and Snow vs Windscreen Wipers Test - 19th Feb 21
Real Reason Why Black and Asian BAME are NOT Getting Vaccinated - NHS Covid-19 Vaccinations - 19th Feb 21
New BNPL Regulations Leave Zilch Leading the Way - 19th Feb 21
Work From Home Inflationary House Prices BOOM! - 18th Feb 21
Why This "Excellent" Stock Market Indicator Should Be on Your Radar Screen Now - 18th Feb 21
The Commodity Cycle - 18th Feb 21
Silver Backwardation and Other Evidence of a Silver Supply Squeeze - 18th Feb 21
Why I’m Avoiding These “Bottle Rocket” Stocks Like GameStop - 18th Feb 21
S&P 500 Correction Delayed Again While Silver Runs - 18th Feb 21
Silver Prices Are About to Explode as Stars are Lining up Like Never Before! - 18th Feb 21
Cannabis, Alternative Agra, Mushrooms, and Cryptos – Everything ALT is HOT - 18th Feb 21
Crypto Mining Craze, How We Mined 6 Bitcoins with a PS4 Gaming Console - 18th Feb 21
Stock Market Trend Forecasts Analysis Review - 17th Feb 21
Vaccine Nationalism Is a Multilateral, Neocolonial Failure - 17th Feb 21
First year of a Stocks bull market, or End of a Bubble? - 17th Feb 21
5 Reasons Why People Prefer to Trade Options Over Stocks - 17th Feb 21
The Gold & Gold Stock Corrections Are Normal - 17th Feb 21
WARNING Oculus Quest 2 Update v25 BROKE My VR Headset! - 17th Feb 21
UK Covid-19 Parks PACKED During Lockdown Despite "Stay at Home" Message - Endcliffe Park Sheffield - 17th Feb 21
How to Invest in ETFs in the UK - 17th Feb 21
Real Reason Why Black and Asian Ethnic minorities are NOT Getting Vaccinated - NHS Covid-19 Vaccinations - 16th Feb 21
THE INFLATION MEGA-TREND QE4EVER! - 16th Feb 21
Gold / Silver: What This "Large Non-Confirmation" May Mean - 16th Feb 21
Major Optimism for Platinum, Silver, and Copper - 16th Feb 21
S&P 500 Correction Looming, Just as in Gold – Or Not? - 16th Feb 21
Stock Market Last pull-back before intermediate top? - 16th Feb 21
GAMESTOP MANIA BUBBLE BURSTS! Investing Newbs Pump and Dump Roller coaster Ride - 16th Feb 21
Thinking About Starting to Trade This Year? Here Are Some Things to Keep in Mind - 16th Feb 21
US House Prices Real Estate Trend Forecast Review - 15th Feb 21
Will Tesla Charge Gold With Energy? - 15th Feb 21
Feeling the Growing Heat and Tensions in Stocks? - 15th Feb 21
Morgan Stanley Warns Gasoline Industry Is About to Become Totally Worthless - 15th Feb 21
Debts Lift Gold - Precious Metal Prices Will Rise on a Deluge of Red Ink - 15th Feb 21
Platinum Begins Big Breakout Rally - 15th Feb 21
How to Change Car Battery Without Losing Power, Memory, Radio Code Settings - 15th Feb 21
Five reasons why a financial advisor can make a big difference to your small business - 15th Feb 21

Market Oracle FREE Newsletter

FIRST ACCESS to Nadeem Walayat’s Analysis and Trend Forecasts

Gold Reacts to Egypt Riots

Commodities / Gold and Silver 2011 Jan 30, 2011 - 10:53 AM GMT

By: Merv_Burak

Commodities

Best Financial Markets Analysis ArticleRiots on Thursday, gold moves lower.  Riots on Friday, gold moves higher.  Is there rhyme and reason here?  Thursday the students rioted.  Friday the Muslim Brotherhood joined in the riots.  Yes, there was a difference.  Now it’s a wait and see what the outcome will be to better guess what next for gold.


GOLD LONG TERM

For a very strict application of my point and figure criteria the long term P&F chart has now broken on the down side for a bear market signal.  However, we do still have a support at the $1320 level so a move to the $1305 level would be required to break this final support.  Although the P&F criteria does give that bear signal I would be inclined to wait for the final support break before pulling my hair out and going screaming, bear, bear.  The price is close enough so that it would only take another day or two to break the support, if it is so inclined.  We might as well wait for the break.

Going to our normal indicators we get somewhat of a similar message.  Going towards the bear but not quite there yet.  Gold closed below its long term moving average line on Thursday but bounced above the line on Friday.  The moving average itself is still in an upward slope.  The long term momentum indicator remains in its positive zone but has been showing a weakening trend for some time.  It remains below its negative trigger line.  The volume indicator has been in a basic lateral path for some time now.  Its trigger line has caught up with the indicator and now the indicator is oscillating above and below the trigger line as the lateral indicator trend continues.  The trigger does remain slightly in a positive slope.  With all that, the long term rating has now started to decrease and is at a + NEUTRAL level, one step below the bullish level.

INTERMEDIATE TERM

Well, if the long term is starting to diminish in its rating then the intermediate term should be ahead of it.  That is what we have.  Gold closed below its intermediate term moving average line and the line slope remains negative.  The momentum indicator is still in its negative zone although it has turned to the up side and is just below its neutral line.  The indicator remains below its negative sloping trigger line.  As for the volume indicator, that remains just a hair below its negative sloping trigger line.  After four months of a topping process one can now say that the topping has ended and we are in a downward trend.  The intermediate term rating is BEARISH.  This is confirmed with the short term moving average line well below the intermediate term line.

SHORT TERM

We were having a down week until Friday, when something excited gold.  Now, it could be the activities in the Middle East or it could be short covering by banks or institutions.     Who Knows?

There are many analysts out there in internet land much better at understanding what’s going on in the actual trading activity, who is doing what and why?  All I know is what the market tells me, and that is reflected in the price and volume information.  From there it’s all guess work, educated guess but still a guess.  Trends, momentum, patterns, they all come into play one way or the other.

So, let’s see what we have here.  After a four month topping process gold broke below its up trend line and into a down trending channel.  Despite the sharp rise on Friday gold remains in the channel.  Unfortunately, we have volume increasing as the down side takes hold, this is not good.  One might have expected the volume to show a spike on Friday, as Oil did during its sharp upswing on Friday.  The volume remaining below Thursday’s volume suggests that there was no real rush to buy gold by the mass of speculators who usually move markets but maybe only a few large shorts covering their trades with no upside follow through by the speculators.

Although gold had a nice bounce on Friday it still closed below its negative sloping moving average line.  The momentum indicator perked up a bit and closed above its trigger line, turning the trigger upward but still the momentum ended the day in its negative zone.  As already mentioned, the daily volume activity seems to suggest speculators getting out rather than buying in.  The daily volume has been consistently above its 15 day average volume while the gold price was in a basic down trend.  All in all the short term rating is BEARISH.  This is further confirmed with the very short term moving average line remaining below the short term line.

As for the immediate direction of least resistance, I think I’ll forgot that guess today.   The situation in the Middle East is just too volatile and may have an enormous effect on gold, one way or the other.

SILVER

The silver chart has lots of trends, patterns and indicators.  They are all telling us one story.  Silver had a wonderful run, it topped out and started its down trend and now may be in a little bit of a bounce but not yet a turn around back to the up side.  So, what all do we have here.

The most obvious trend is that four and a half month up trend that ended in early January.  That up trend line was also the lower support line of an up trending wedge pattern, which is a pattern most often broken on the down side.  Low and behold, is that a head and shoulder pattern that we see in December/January?  Why yes it is.  The breaking of its neckline a little over a week ago gives us a projection to the $24.73 level.  Then we have that down trending channel.  The silver price is still trapped inside that channel although another decent upside day and it will break above its resistance line.  And along with these trends and patterns we have our normal indicators.  Just a general note on the indicators before I continue.  Most of the momentum indicators have been warning us of a down turn for some time.  The intermediate term momentum indicator shown in the chart does show this weakening in the price strength but also shows that the strength had not gotten to the point of going negative.  It has done so in the short term but not the other time periods.  So this is a warning indicator but not yet a reversal of strength.

Looking at the P&F chart we have now broken below the up trend line and have a longer term projection to the $21 level.  One can also calculate a still further projection to the $15.00 level but that does seem out of the picture.  Still, it is there and should not be totally ignored.  I find that the down side P&F projections are not as accurate as the up side ones are so take these with caution and not gospel.

As for the time period indicators, the long term is still all positive so I wouldn’t spend any time there.  The long term remains BULLISH and not yet in danger of a reversal.

On the other periods, the Table shows that silver is NEG on the other time periods.  Well, looking at the chart and using my normal analysis indicators we are not quite there yet with the intermediate term.  We were in the bearish territory for a few days but with Friday’s action the momentum indicator has perked up and crossed its trigger line to the up side.  The intermediate term rating is now at a - NEUTRAL rating, one level above a full bear but this could change with very little negative action.  The short term moving average line remains below the intermediate term line confirming that we are not quite at the bullish level.

As for the short term, well the Index has closed above its short term moving average line but the line is still pointing downward.  The momentum indicator is perking up and has crossed its now positive trigger line but is still in its negative zone.  The short term rating has moved up to the + NEUTRAL level just a little below a full bull.  The very short term moving average line has turned upwards but remains below the short term line for confirmation that the bull is not quite here yet.

PRECIOUS METAL STOCKS

 

The Weekly Table below tells the story of the precious metal stocks so I wouldn’t go into details this week.  One note is that the Merv’s Penny Arcade Index has dropped lower this week as the one Index with weakness.  That is not yet a warning of doom and gloom but something to watch should the actions of this Index be much more negative than the markets in general.  As I said, not yet doom and gloom but something to keep an eye on.

 

Merv’s Precious Metals Indices Table

Well, that’s it for this week.  Comments are always welcome and should be addressed to mervburak@gmail.com.

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

6 Critical Money Making Rules