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
Chinese Tech Stocks CCP Paranoia and Best AI Tech Stocks ETF - 26th Oct 21
Food Prices & Farm Inputs Getting Hard to Stomach - 26th Oct 21
Has Zillow’s Collapse Signaled A Warning For The Capital Markets? - 26th Oct 21
Dave Antrobus Welcomes Caribou to Award-Winning Group Inc & Co - 26th Oct 21
Stock Market New Intermediate uptrend - 26th Oct 21
Investing in Crypto Currencies With Both Eyes WIDE OPEN! - 25th Oct 21
Is Bitcoin a Better Inflation Hedge Than Gold? - 25th Oct 21
S&P 500 Stirs the Gold Pot - 25th Oct 21
Stock Market Against Bond Market Odds - 25th Oct 21
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

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Gold Boxed-in Wating for Bullish or Bearish Breakout

Commodities / Gold & Silver Sep 13, 2008 - 02:33 PM GMT

By: Merv_Burak

Commodities

Best Financial Markets Analysis ArticleTuesday took all of the steam out of the two week rally but then that was it. The rest of the week was basically a lateral drift. More downside or continued upside? Let's see.

GOLD : LONG TERM - The week's activity still did nothing for the long term. The P&F chart continues to be bearish and the indicators are all in the negative zone. On the long term the rating remains BEARISH until some more significant market action takes place.


INTERMEDIATE TERM

Although Tuesday was a vicious day for the week not much has happened to change any indicators or gold price direction. We had a double top break confirmed a few weeks back and as previously mentioned, the rally was a normal reaction to a break where the price reaches back to the break point before continuing. Well, that's exactly what it looks like it's doing. The reaction just touched the break line and it is once more heading lower. The next confirmation of the trend continuation would be the breaking of the support line at around the $775 level. I had previously also mentioned the reverse situation that gold went through on the way up, a year ago. This is what we might have in store on the way down. Look for more sideways action before the down trend continues.

As the chart clearly shows, gold continues to trade below its intermediate term moving average line and the line remains sloping downwards. The momentum indicator is confirming the price action by remaining in its negative zone below its negative trigger line. The volume indicator is showing greater weakness versus the momentum and is below its negative trigger line. It is also well below its level from a couple of weeks back while the price and momentum are still above their levels. All in all, the intermediate term rating remains BEARISH.

SHORT TERM

From the short term perspective we may be into a “box” situation where the price of gold continues to move sideways for a while inside a box. The upper and lower levels of the box appear to be the $850 and $775 levels. We'll just have to wait and see if that is the case. Should gold continue inside the box then its next direction will be signaled on a break outside the box. From all indications one would expect such break to be to the down side but I'd wait for the break to happen.

In the mean time the present short term indicators are mostly negative. Gold is below its negative sloping short term moving average line and the momentum indicator remains in its negative zone just very slightly below its trigger line. At this point in time the actual rating for the short term remains BEARISH.

As for the immediate direction of least resistance that doesn't appear to be either up or down. Although the aggressive Stochastic Oscillator is in its negative zone, sitting right on top of its oversold line, it appears to be going nowhere. The very short term moving average line is still above the daily action but the daily action also appears not to be going anywhere. One might say that more of the same, i.e. lateral activity, is to be expected.

SILVER

The last time I showed a silver chart was two weeks ago. It showed silver acting very much like gold except more pronounced on the down side. Once more I'm cutting the commentary short for silver due to time constraints. However, it should be noted that silver closed at a new bear market low on Friday. This may be an indication as to where gold is heading. We'll just have to wait and see.

Looking at the Table of Technical Information and Ratings, Silver has a – NEUTRAL rating for all three time periods. This may be due to different indicators used in the mechanical program that develops the table information. Looking at the chart and my normal indicators silver should have a BEARISH or NEG rating for all three periods.

PRECIOUS METALS STOCKS

WOW! What a week for precious metal stocks. Going through my universe of 160 precious metal stocks (gold & silver) there were only 5 stocks that closed on the up side. With 2 stocks unchanged that leaves 153 stocks on the down side. The AVERAGE decline of these 160 stocks was a hefty 12.1% with the major North American Indices averaging closer to the 13% decline level. We now have the average price of gold stocks at levels they had not seen since 2005.

I have been asked on many occasions to provide readers with my Merv's Gold & Silver 100 Index Table of Technical Information and Ratings. Although I do update this table each week I do not usually make it available. My more encompassing Table of 160 Index stocks IS provided to subscribers each week, as are the separate tables of the various sector Indices.

I expect to be posting my Merv's Gold & Silver 100 Index Table in my Uranium blog site later today so if anyone should like to access this table this week it should be posted before the day's end, most likely late in the evening (Sunday). The Uranium blog is at http://techuranium.blogspot.com and it's free.

From the technical discipline this is not the time for investors or speculators to be in the market on the buy side. Who knows, it just might be the bottom of the market and a good gamble BUT with the direction of stocks and markets moving lower one would be taking huge extra risks buying at this time. Out of the 160 stocks in the 160 Index those that are rated as positive in their trend for all three investment time periods is in the single digit %, ranging from 7% for the short term to 4% for the long term. Not the environment to be buying. Of course, there is an oft stated (fundamental) concept that one should buy when everything is negative, but it could continue negative for a long time and continue negative for a significant extra downside %. A technical concept is to buy when the trend is to the up side and have the odds on your side.

Merv's Precious Metals Indices Table

That's it for this 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