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
Is Stock Market Selling Madness About Over? - 16th May 21
Crypto Bubble Bursts! Nicehash Suspends Coinbase Withdrawals, Bitcoin, Ethereum Bear Market Begins - 16th May 21
Budgies Birds of Paradise Indoor Grape Vine Singing, Chirping and Flying Parakeets Fun 3D VR180 UK - 16th May 21
Wall Street Roiled by Hot Inflation Data: Is This REALLY “Transitory”? - 16th May 21
Inflation Going Stag - 16th May 21
CHIA Coins After 1st Week of Plotting 140 Plot 14tb Farm. Crunching the Numbers How to Win - 15th May 21
Tips to Create the Best Cross-Functional Teams - 15th May 21
Gold: Lose a Battle to Win the War - 14th May 21
Are You Invested in America’s “Two-Hour Boom” Fast Shipping Stocks? - 14th May 21
Gold to Benefit from Mounting US Debt Pile - 14th May 21
6 Solid Signs You Should Have Your Smart Device Repaired Right Away - 14th May 21
Ways to Finance Your Business Growth - 14th May 21
Cathy Wood Ark Invest Funds Bubble BURSTS! ARKK, ARKG, Tesla Entering Severe Bear Market - 13th May 21
How Much CHIA Coins Profit from 100 Plot 10tb Farm? Hard Drive Space Mining - 13th May 21
Stock Market Bulls Getting Caught in the Whirlwind - 13th May 21
Legoland Windsor Mini land and Sky Train Virtual Tour in VR 360 - UK London Holidays 2021 - 13th May 21
Peak Growth and Inflation - 13th May 21
Where’s The Fed? Watch Precious Metals For Signs Of Inflation Panic - 13th May 21
Coronavius Covid-19 in Italy in August 2019! - 13th May 21
India Covid Apocalypse Heralds Catastrophe for Pakistan and Bangladesh - 13th May 21
TESLA! Cathy Wood ARK Funds Bubble BURSTS! - 12th May 21
Gold Price During Hyperinflation - 12th May 21
Stock Market Extending Phase Two? - 12th May 21
Crypto 101 for new traders – ETH or BTC? - 12th May 21
Stock Market Enters Early Summer Correction Trend Forecast Time Window - 11th May 21
GOLD GDX, HUI Stocks - Will Paradise Turn into a Dystopia? - 11th May 21
Cathy Wood Bubble Bursts as ARK Funds CRASH! Enter into a Severe Bear Market - 11th May 21
Apply This Technique to Stop Rushing into Trades - 10th May 21
Stock Market Entering Early Summer Correction Trend Forecast - 10th May 21
CHIA Getting Started SSD Crypto Mining by Plotting and Farming on Your Hard Drives Guide - 9th May 21
Yaheetech Mesh Best Cheap Computer /. Gaming Chairs on Amazon Review - 9th May 21
Breaking US Trade Embargo with Cuba - Build 7 Computers in 14 Hours Before Ship Sales Challenge - 9th May 21
Dripcoin Applies New Technology That Provides Faster Order Execution - 9th May 21
Capital Gains Tax Hike News: Was It REALLY to Blame for Sell-off? - 7th May 21
Stock Market Transportation Index Continues To Grind Higher - 7th May 21
SPX Stock Market Correction Arriving or Not? - 7th May 21
How to Invest in an Online Casino? - 7th May 21
Gold & Silver Begin New Advancing Cycle Phase - 6th May 21
Vaccine Economic Boom and Bust - 6th May 21
USDX, Gold Miners: The Lion and the Jackals - 6th May 21
What If You Turn Off Your PC During Windows Update? Stuck on Automatic Repair Nightmare! - 6th May 21
4 Insurance Policies You Should Consider Buying - 6th May 21
Fed Taper Smoke and Mirrors - 5th May 21
Global Economic Recovery 2021 and the Dark Legacies of Smoot-Hawley - 5th May 21
Utility Stocks Continue To Rally – Sending A Warning Signal Yet? - 5th May 21
ROIMAX Trading Platform Review - 5th May 21
Gas and Electricity Price Trends so far in 2021 for the United Kingdom - 5th May 21
Crypto Bubble Mania Free Money GPU Mining With NiceHash Continues... - 4th May 21
Stock Market SPX Short-term Correction - 4th May 21
Gold & Silver Wait Their Turn to Ride the Inflationary Wave - 4th May 21
Gold Can’t Wait to Fall – Even Without USDX’s Help - 4th May 21
Stock Market Investor Psychology: Here are 2 Rare Traits Now on Display - 4th May 21
Sheffield Peoples Referendum May 6th Local Elections 2021 - Vote for Committee Decision's or Dictatorship - 4th May 21
AlphaLive Brings Out Latest Trading App for Android - 4th May 21
India Covid-19 Apocalypse Heralds Catastrophe for Pakistan & Bangladesh, Covid in Italy August 2019! - 3rd May 21
Why Ryzen PBO Overclock is Better than ALL Core Under Volting - 5950x, 5900x, 5800x, 5600x Despite Benchmarks - 3rd May 21
MMT: Medieval Monetary Theory - 3rd May 21
Magical Flowering Budgies Bird of Paradise Indoor Grape Vine Flying Fun in VR 3D 180 UK - 3rd May 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Gold Bounce from Oversold Levels

Commodities / Gold & Silver Aug 27, 2008 - 12:59 AM GMT

By: Merv_Burak


Gold was basically in a bounce mode this past week but unfortunately closed on the down side on Friday. It needs a lot more upside activity or lateral strength building to prove that it is back on a roll.

GOLD - LONG TERM : Although the week was somewhat positive nothing from the long term has changed. The message of the P&F chart has remained as shown last week although we now have a column of 4 Xs.

The very long term rating, as mentioned last week, remains bearish. As for the normal charts and indicators, gold remains below its negative sloping long term moving average line while the long term momentum remains just below its neutral line in the negative zone. The volume indicator, although still not as weak as the other indicators, is below its negative sloping trigger line. The long term rating remains BEARISH .


You would expect a little more excitement in the intermediate term than the long term, and here we have it (emphasis on “little”). Over the past several months we had a fairly good support level that was broken a couple of weeks back. That activity over the past several months has given us a double top pattern. The break below support was the breaking of the double top projecting, by this method, down to about the 670 level. That seems to confirm the $660 level that I mentioned last week based upon the long term P&F break. Technicians will see the bounce this past week as nothing more than a reflex following a break. It is not unusual in these breaks (as well as in head and shoulder breaks) that the price should rally back to the previous support (now a resistance) line before continuing on its downward way. You can also see that the bounce started from the same level that the previous (Nov 2007) bounce started. Something to watch is to see if this area from $775 to $850 ends up to be an opposite to the Nov 2007 area action, i.e. sideways and then lower.

As for our normal charts and indicators, gold remains below its negative sloping moving average line and it would take another one or two weeks of action such as this week to change that. The intermediate term momentum indicator remains in its negative zone but has moved above its trigger line and the line has now turned very slightly to the positive side, so, one would call it a negative rating but moving positively. The volume indicator has perked up a bit but is still below its intermediate term negative trigger line. All in all there is no reason yet to improve the BEARISH rating.


You can see the bounce back to the resistance (previously a support) line on the short term chart. The Friday action looks very much like a reversal action but most of my Candlestick books say to wait for confirmation the next day, that would be Monday.

We see the aggressive Stochastic Oscillator was firming up for a week before finally breaking above its oversold line on Monday. The short term momentum broke above its line on Monday also. Both indicators are above their positive sloping trigger lines but while the SO in well inside its positive zone the momentum is still inside its negative zone. Gold is above both short and very short term moving average lines but only the very short term line has turned upwards. We have a short term that is rated as + NEUTRAL while the immediate direction is upwards but in trouble of getting reversed with only a minor amount of negative gold action.


The silver drop has been more pronounced than the gold recent drop, although neither one would be invisible to chart watchers. The major difference between the two moves is that gold had given advance warning of the March top being weak by the weakness in its momentum indicator while silver momentum gave no such advance warning. The subsequent momentum action was similar to the gold action except that after the latest break to the down side in the beginning of August the silver weakness has been considerably greater than the gold weakness. The price drop in silver has also been more severe. The bounce this past week came nowhere near its high of the previous week while for gold its bounce exceeded its previous week's high, if only by a little. It's interesting to note that silver is rated with Relative Strength weaker than gold for all three time periods (see Table) but more interesting is the direction of the Relative strength. Gold RS is improving versus the table list while silver is getting weaker versus the list, this for all three periods. Silver is still not the place to be. Gold isn't either but it is somewhat stronger than silver at this time.


Looking over the charts of the various Merv's precious metal indices the only conclusion one gets is that they are not pretty charts. Bummers, all of them. The various Tables of Technical Information and Ratings confirms the story. For the universe of 160 stocks in the Merv's Gold & Silver 160 Index only 9% are rated as bullish on the intermediate term and only 6 are on the long term. Similar results can be seen for all the Indices (available to subscribers at the Merv's Precious Metals Central at ). The Merv's Qual-Silver Index has zero stocks rated as bullish so that group has only one way to go and that is up. Also telling is that out of the 14 stocks, in the 160 group, with positive performance over the past 50 days (intermediate term) 6 of them have their performances moving in a negative direction. We are going to need considerable more upside action, or lateral strength building action, before the precious metal stocks once again start to look good. That time will come but one just has to be patient and not get too cocky ahead of time. There could still be significant losses ahead. If we are in the early stages of a turn around phase there will be plenty of time to get in and profit once the turn has been verified.

Merv's Precious Metals Indices Table

Well, 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 .

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 . 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 - 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