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
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

Gold Trades Sideways Amidst Continuing Bearish Trend

Commodities / Gold & Silver Nov 09, 2008 - 08:27 AM GMT

By: Merv_Burak

Commodities

Best Financial Markets Analysis ArticleHaving been away last week didn't seem to have made much difference. Gold is just about where it was when last I reviewed it here two weeks ago. The best that can be said is that it is building strength while moving in a basic lateral direction.

GOLD : LONG TERM - Since I last showed the long term P&F chart of gold in my 2008-10-17 commentary it had made a move to lower levels and then moved in a sideways path. It has formed a strong resistance at the $765 level so a move to $780 would be an upside break. It might also be a reversal to the bull as the down trend line is very close to that point.


It depends upon any further sideways movement prior to a break. Such a break, should it happen, would project to at least the $870 level, which would not indicate a very strong move. However, a move below the $705 level might indicate a bear trend continuation towards the present projections of $630 then $480. We'll just have to wait and see which way the wind is blowing.

As for the normal indicators, gold remains below its negative sloping moving average line and the momentum indicator remains in its negative zone just a shade below its negative sloping trigger line. The volume indicator is making new lows showing greater weakness than either the price or momentum. All in all, the long term rating remains BEARISH .

INTERMEDIATE TERM

The chart clearly shows a bearish trend of lower highs followed by lower lows. Gold is quite a distance below its negative sloping moving average line. The volume indicator (not shown) is also into new lows below its negative sloping trigger line. The momentum indicator is also in its negative zone but is just above its trigger line attempting to move higher. The trigger is still, however, pointing downward. One positive in this picture is the location of the momentum indicator. While the price and volume have both moved into new low levels recently the momentum indicator remained above its previous low giving us a mild positive divergence. We'll just have to see how this develops. In the mean time, based upon the indicators as they are, the rating must remain BEARISH .

SHORT TERM

We're getting somewhat of a mixed picture from the short and very short term indicators. Gold has basically been moving sideways for the past two weeks but the indicators are all over the place. First, gold has been above and below its short term moving average line but the line remains in a negative slope. The very short term moving average line seemed to have bottomed out and appeared to be attempting to cross the short term line to the up side. However, the attempt has so far failed and the very short term line remains just a hair below the short term line. The short term momentum indicator, however, has been moving basically in an upward direction and remains above its positive sloping trigger line.

However, it still resides inside its negative zone. The daily volume action has not been impressive at all. Over the past few months it has remained mostly below its 50 day moving average line. This indicates a volume action that is getting fewer and fewer daily trades although the trend is not that noticeable. Although the momentum indicator has made a new short term movement high this past week (but still in the negative zone) the price could not breach its previous high. Will the price pull the momentum down with it or will the momentum strength pull the price up with it? We'll see this week. For now there remains only one rating for the short term and that is the BEARISH rating.

As for the direction of least resistance, the aggressive Stochastic Oscillator (SO) is suggesting very short term weakness by already moving below its previous lows unlike the price or short term momentum. The direction of least resistance therefore appears to be to the down side.

SILVER

Since reaching its high in March silver has been a poor performer. Its latest projection is still to the $6.00 mark. This is really an average between two projections from its March to July consolidation period. One projection was to $5.50 while the other one was to $6.50, so I just took an average. Interesting to note that the projection calls for a further drop in silver price by 40% while at the same time the $480 projection for gold calls for a 35% drop in price. Close enough to consider both as equivalent projections.

There is nothing in the indicators different from that of gold. Price below negative moving average lines, momentum in the negative zone but showing a slight positive divergence and the daily activity in volume continuing to be weak and below its 50 day average volume. So, whatever the ratings were for gold could apply equally to silver. 

PRECIOUS METAL STOCKS

Over the past few commentaries I have been showing you charts of the average performances of a sector in the precious metals. Today we look in on the Merv's Qual-Silver Index for the average performance of the 10 largest silver stocks.

Over a period of just over 6 years the average price of this sector increased by a factor of over 17 times. In just ½ of a year the reversal cut that gain by three quarters. When the bear growls you'd better run, and fast. One can easily see the topping process for over a year with the momentum indicator getting weaker and weaker even as the Index was moving higher and higher. Here I show a very long term chart with a 52 week RSI and a simple 52 week moving average line. I guess the question on most speculator's minds is when will it bottom and turn around?

Well, there has been a lot of technical damage done and one would not expect a quick turn around. I would expect it to meander sideways for a while before turning around. That is not yet happening so maybe the projections for silver will cause further decline in the stocks. One should keep in mind that it would not be unusual for the stocks to actually turn around and start their bull move before the commodity actually bottoms out. It's a wait and see game. Let the charts tell you what IS HAPPENING and not try to jump the gun picking a bottom.

Merv's Precious Metals Indices Table

Let's call it 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.


Comments

robert clark
09 Nov 08, 17:52
buy gold

Charts are a waste of time. Comex is a waste of time.

Gold is a currency. The usd will start its massive decline any time now and gold WILL be above $900. Physical gold still remains hard to get. I bought gold coins and was told 2.5 months for delivery...thats right 2.5 months!!!

Enough said.

Robert.


Post Comment

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