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
FREETRADE - Stock Investing Platform, the Good, Bad and Ugly Review, Free Shares, Cancelled Orders - 15th Jan 22
WD 14tb My Book External Drive Unboxing, Testing and Benchmark Performance Amazon Buy Review - 15th Jan 22
Toyland Ferris Wheel Birthday Fun at Gulliver's Rother Valley UK Theme Park 2022 - 15th Jan 22
What You Should Know About a TailoredPay High Risk Merchant Account - 15th Jan 22
Best Metaverse Tech Stocks Investing for 2022 and Beyond - 14th Jan 22
Gold Price Lagging Inflation - 14th Jan 22
Get Your Startup Idea Up And Running With These 7 Tips - 14th Jan 22
What Happens When Your Flight Gets Cancelled in the UK? - 14th Jan 22
How to Profit from 2022’s Biggest Trend Reversal - 11th Jan 22
Stock Market Sentiment Speaks: Are We Ready To Drop To 4400SPX? - 11th Jan 22
What's the Role of an Affiliate Marketer? - 11th Jan 22
Essential Things To Know Before You Set Up A Limited Liability Company - 11th Jan 22
NVIDIA THE KING OF THE METAVERSE! - 10th Jan 22
Fiscal and Monetary Cliffs Have Arrived - 10th Jan 22
The Meteoric Rise of Investing in Trading Cards - 10th Jan 22
IBM The REAL Quantum Metaverse STOCK! - 9th Jan 22
WARNING Failing NVME2 M2 SSD Drives Can Prevent Systems From Booting - Corsair MP600 - 9th Jan 22
The Fed’s inflated cake and a ‘quant’ of history - 9th Jan 22
NVME M2 SSD FAILURE WARNING Signs - Corsair MP600 1tb Drive - 9th Jan 22
Meadowhall Sheffield Christmas Lights 2021 Shopping - Before the Switch on - 9th Jan 22
How Does Insurance Work In Europe? Find Out Here - 9th Jan 22
MATTERPORT (MTTR) - DIGITIZING THE REAL WORLD - METAVERSE INVESTING 2022 - 7th Jan 22
Effect of Deflation On The Gold Price - 7th Jan 22
Stock Market 2022 Requires Different Strategies For Traders/Investors - 7th Jan 22
Old Man Winter Will Stimulate Natural Gas and Heating Oil Demand - 7th Jan 22
Is The Lazy Stock Market Bull Strategy Worth Considering? - 7th Jan 22
METAVERSE - NEW LIFE FOR SONY AGEING GAMING GIANT? - 6th Jan 2022
What Elliott Waves Show for Asia Pacific Stock and Financial Markets 2022 - 6th Jan 2022
Why You Should Register Your Company - 6th Jan 2022
4 Ways to Invest in Silver for 2022 - 6th Jan 2022
UNITY (U) - Metaverse Stock Analysis Investing for 2022 and Beyond - 5th Jan 2022
Stock Market Staving Off Risk-Off - 5th Jan 2022
Gold and Silver Still Hungover After New Year’s Eve - 5th Jan 2022
S&P 500 In an Uncharted Territory, But Is Sky the Limit? - 5th Jan 2022
Quantum AI Tech Stocks Portfolio Current State - 4th Jan 2022
The Alibaba Stock Market - 4th Jan 2022
Will Gold & Silver Be Investment Outcasts in 2022 Again? - 4th Jan 2022
Stock Market Happy 2022 Entry - 4th Jan 2022
Complete paradigm shift will make Gold the generational trade - 4th Jan 2022
Corsair MP600 NVME2 1tb Drive Sudden DEATH Failures - Back Up NOW! - 4th Jan 2022
AI Tech Stocks Portfolio Updated Buying Levels and Zones Part 2 of 2 - 3rd Jan 2022
Stock Market Sentiment Speaks: 2022 Can Be Your Best Year Ever - 3rd Jan 2022
2020-22 - Soaring costs of the West's Pandemic failure - 3rd Jan 2022
AUTODESK (ADSK) - CAD - Metaverse Stock Analysis Investing for 2022 and Beyond - 2nd Jan 2022
Stock Market Sector Themes In Play For 2022 - 2nd Jan 2022
Excuse Me Mr Gold. What Year Is It? - 2nd Jan 2022
Stock Market Early 2022 Should Continue Melt-Up Trend In January / February - 2nd Jan 2022
UK Energy Crisis WARNING 2022 - How to Avoid Huge Increase in Gas and Electric Fuel Bills Right Now! - 1st Jan 2022
Why You Need A PR Expert For Your Financial Startup - 1st Jan 2022
TENCENT- Chinese High Risk GAMING Metaverse Stock Analysus for Investing 2022 and Beyond - 31st Dec 21
Gold Price Forecast 2022 - The Golden Year - 31st Dec 21
Will 2022 Be Better for Gold Than 2021? - 31st Dec 21
Gold Stocks – Wishing And Hoping (And Losing) - 31st Dec 21
Sheffield Christmas Market 2021 SANTAS GROTTO at Peace Gardens, City Centre Sights and Sounds - 31st Dec 21
Nvidia Leaves planet Earth - AI Tech Stocks Analysis - 30th Dec 21
Google (Alphabet) AI Tech Stocks Analysis - 30th Dec 21
Stock Market Santa Rally Challenge - 30th Dec 21
Sheffield Christmas Market Stalls, Sights and Sounds 2021 - 30th Dec 21
Investment Roadmap for 2022 - 30th Dec 21
2022 – The Year of (Gold) Inflation? - 30th Dec 21
Overvalued Stocks and Housing Perfect Storm for Gold - 30th Dec 21
My Most surprising Crypto call to date - 30th Dec 21
What is a Rehab Clinic and How It Is Beneficial for People? - 30th Dec 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Weekly Gold and Silver Technical Analysis Report - 25th March 2007 - Technically Precious with Merv

Commodities / Gold & Silver Mar 25, 2007 - 06:01 PM GMT

By: Merv_Burak

Commodities

Friday's sharp reversal almost wiped out the gains from the previous 4 days. Is this a new reversal or just nervous nellies selling prior to a week-end?

Relative Strength (RS)

I don't remember how I got started on this but I guess I'd better finish it off. In my tables of technical information and ratings (an example is usually published at the end of my commentaries) is a column called RS for Relative Strength. As I have explained briefly in previous commentaries what the moving average (MA) and momentum (MOM) columns of information are all about I guess I should finish and explain the last of the information columns. There is still the RATINGS (RATE) column but I'll leave that for possibly next week.


As the name implies, RS compares the strength of one item relative to another item. Now there are many different strengths that can be compared and many standards to compare against. As with my comments about momentum, one really must understand what one is comparing, and how, to really understand any particular Relative Strength value. In a nut shell, the performance of each stock or Index in a table is compared to the performance of a benchmark, relative to a specific time period. The stock or Index that had the best comparative performance is given the number one rating. The stock or Index that came out second best is given the number two, and so forth. From this you know which stock or Index performed the best for whatever investment time period you are interested in (short, intermediate or long term). A second piece of information in the table are the + or – symbols. What these indicate is whether the performance of the stock or Index is improving relative to the performance of the benchmark or getting weaker relative to the performance of the benchmark.

I find the + and – information the most useful of the two pieces of information under this column. The performance number is just an indication of historical performance to date. A stock can have the best performance over the past intermediate term but could drop over a cliff tomorrow. The + and – indicates if the past week's performance is still getting better or not. You might want to be in a stock that has continued improvement in its performance and be on guard when the performance goes -. Again, the performance that is being measured is versus the performance of the benchmark. Both the stock and the benchmark may be moving higher. What is measured is if the performance of the stock had been greater than or weaker than the performance of the benchmark. If the benchmark advanced 2% on the week and the stock advanced only 1%, but still advanced, this would show up as a – in the table to indicate weaker performance versus the benchmark. We could have both declining on the week but still have a + for the stock if its decline was not as much as the benchmark decline. The name tells it all, RELATIVE.

As for the benchmark, for each table I calculate a separate Index based upon the average performance of all table component stocks or Indices. So, in effect, the benchmark used is the average performance of all stocks or Indices of the table. The relative performance of a particular stock or Index is therefore relative to the average of the component stocks or Indices, not some outside or unconnected benchmark.

Is this useful information? Well let's just take an example. In the Gold Indices Table at the end of these commentaries there are a set of Merv's Gold Indices. There are three separate gold sector Indices representing quality, speculative and gambling type of gold stocks. If you were holding some speculative gold stocks but you see that the RS for the speculative Index is – while the RS for the quality is +, you might want to consider moving from the speculative to the quality where the Index is improving rather than weakening versus the benchmark performance.

GOLD : LONG TERM

There is still insufficient new action that would make a long term chart necessary to understand the long term analysis. The intermediate term chart (with a long term moving average) should be sufficient for now.

Friday's action in the April contract was a little scary but it didn't change anything from the long term perspective. Gold is still trading above a positive long term moving average line and momentum is still in its positive zone. Although positive the momentum activity continues to under perform showing a very weak price activity. Is this a precursor to a serious decline? I don't know, but it is something to keep in mind until more strength enters the picture.

For now I remain NEUTRAL on the long term prognosis although everything is in the positive side for now.

INTERMEDIATE TERM

Technically, the intermediate term P&F chart went bearish during the plunge in early March and remains so. It is, however, in a strong rebound and has crossed back above its previous up trend line, back into the up trending channel shown here a few weeks ago. The bear signal may turn out to be a false signal, or it just could turn out to be an early bear signal with future action on the down side. I'm not sure which it will be so am going with the P&F signal as it is.

The normal indicators are still on the opposite side of the trend to the P&F as everything is still positive. The price action is still above a slightly positive moving average line and the momentum indicator is still in its positive zone. In addition, the up trending channel on the bar or candlestick chart has not been violated on the down side and the price remains inside the channel. Momentum the same. Although positive, neither of these indicators are anywhere near comfortably positive. The momentum especially is showing real weakness by continuing to move just above its neutral line, ready to drop below. Any continuation of Friday's price action would see momentum drop below its neutral line and below its channel support line.

Last week I went – NEUTRAL as far as the rating was concerned. I'll remain so for another week.

SHORT TERM

The short term was starting to look okay with the price moving above its short term moving average line and momentum moving higher and finally crossing into the positive zone. However, weakness in the price action was indicated on Wednesday and Thursday (see next section) with a turn around in the price on Friday. As yet the action has not signaled a reversal of the short term trend as both the price and momentum are still positive but only very slightly so. One more down day and everything will go negative on the short term. The Friday's action suggests that we will most likely have a negative day on Monday.

IMMEDIATE TERM

Although we seemed to have a nice little rally going during the week the actions of the Stochastic Oscillator gave us a warning on Wednesday and Thursday that all may not be that great. On Friday the turn came. A careful look at the SO shows us a move into the overbought zone on Tuesday followed by lower values and a cross below the overbought line on Wednesday and Thursday. A non-confirmation message from the aggressive momentum indicator. Although the Friday price closed just below the very short term moving average line the line itself was still pointing upward. However, everything seems to point to a negative start of the week for gold. As always, events in the Middle East are very volatile and things could change for the better, especially for the British, at any moment so the immediate term is nothing other than a toss of the coin.

NORTH AMERICAN GOLD INDICES

Well, we are back to the S&P/TSX Global Gold Index.

The looks of the Index action over the past year is somewhat different from that the PHLX Gold & Silver Sector Index shown last week. The S&P/TSX Global Gold Index is more lateral with maybe a very slight upward bias while the PHLX was most definitely a weaker Index trapped inside a downward sloping channel. The people at S&P who are responsible for developing this Index probably wanted to make this Index more representative of the “global” gold situation but all I can see happened is the inclusion of some U.S. traded stocks (a few mighty large ones) to the list. What may be the result over time is an Index that will be very similar to the PHLX Index, if not almost identical. But we'll just have to wait and see. Competitive wise maybe that's the idea as the PHLX may have more of the profitable derivative products that S&P may want to have on their Indices.

Despite the somewhat different drift to the two Indices they are moving very similarly as far as recent action is concerned. Nothing exciting but weak. The S&P/TSX Index tried to make a move late last year but that ended quickly. In general the indicators are still slightly positive on the long term and slightly negative on the intermediate term. One might say that as long as this Index stays above that up trend line everything is still okay.

MERV'S PRECIOUS METALS INDICES

All of the Indices, metals and the US $ were up on the week. Usually one would see at least something going in the opposite direction, usually that would be the US $. Although everything rose there did not seem to be much strength behind the moves so caution is advised. Although all of the Merv's Indices in the table had made new all time highs recently the Composite Index of Precious Metals Indices has not yet done so. It has been held back by the performances of the other North American Indices which have not yet reached new all time highs.

MERV'S GOLD & SILVER 160 INDEX

The overall universe of 160 stocks advanced 2.9% on the week. Not great but respectable. With this past week's action the Index is once more above its positive intermediate and long term moving average lines. The momentum indicators are also in their positive zones but still showing weakness versus Index action.

On the breadth indicator side, we had twice as many component stocks advancing as declining (64% advancing and 32% declining). On the summation of individual stock ratings, things improved somewhat but still didn't change the ratings status. The short term is NEUTRAL with neither a bull nor a bear in control. The Intermediate term is also NEUTRAL while the long term remains BULLISH with 62%.

In looking over the universe of 160 stocks I find that those stocks whose last primary intermediate term rating was POS are still in the minority at 47% while those whose last primary rating was NEG were in the majority at 53%. The drift this past week was significantly towards the POS so maybe another week and there will be more stocks in the POS category than in the NEG for a good sign as to which way the drift is moving, but let's wait till next week before celebrating.

As for greedy speculation, there were three stocks that made it into my plus/minus over 30% weekly gain category, on the plus side. This shows speculation starting to rear its head but not yet at the real greedy level.

MERV'S QUAL-GOLD INDEX MERV'S SPEC-GOLD INDEX MERV'S GAMB-GOLD INDEX

Two of the sector Indices put in good performances above the 3% level while one was only a little above 1%. The Gamb-Gold Index had the best performance during the week with a gain of 3.8%. The Gamb-Gold Index has been the top performing Index, in all time periods, of all the Indices in the Gold Indices Table for four weeks straight now. Best part is that its performance is still + relative to the Composite Index of Precious Metals Indices, which is the benchmark Index for that table. The Qual-Gold Index is one of the poorer performing of the Merv's Indices and is straddling the middle ground in the ratings.

What we have this week are Indices that are all now above positive intermediate and long term moving average lines. In addition, all momentum indicators are positive e. Although the table ratings for the Qual and Spec-Gold Indices are + N the momentum indicator used in the tables is not as quick to turn as the RSI used for commentaries. I'll go with the table ratings anyway.

As for the summation of individual ratings, they are long term BULLISH for all three Indices and NEUTRAL for the intermediate and short term, except for a BULL intermediate term for the Gamb-Gold Index.

Check out the “quality” performance (S&P/TSX Global Index) versus gambling performance (above).

SILVER

Silver continues to just hold its own for now. Although the price is still well entrenched inside an up trending channel the momentum and volume indicators look like they are on their last legs. Still above their support trend lines, both look like they are ready to break down any moment. It's quite obvious that should we have another day or two of negative silver prices these indicators will go negative in advance of the price dropping below its support line. At the present time the odds favor lower prices but who knows, maybe the price support line will do the job.

MERV'S QUAL-SILVER INDEX

Over the past year this Index of 10 stocks had been one of the better performers but is now just so-so. As with all of the Merv's Indices the momentum indicator continues to under perform versus the Index performance. How much longer this will go on remains to be seen but something's gotta give.

MERV'S SPEC-SILVER INDEX

The Spec-Silver Index had been giving the Gamb-Gold Index a run for its money in performance, always just on the heels of the Gamb-Gold Index. It seems that the distance between the two is starting to widen. While the Gamb-Gold retains its number one spot in all time periods the Spec-Silver is now at number 12 and losing steam on the short term. Although still number two in the intermediate term it is losing steam here also with a – in the RS column. It is also the only Merv's Index that closed on Friday barely above its intermediate term moving average line and the line still pointing down. Will silver catch on fire again? We'll just have to wait and see.

MERV'S PRECIOUS METALS INDICES TABLE

Merv Burak,
CMTHudson Aero/Systems Inc.
Technical Information Group

for Merv's Precious Metals Central
Web: www.themarkettraders.com
e-mail: merv@themarkettraders.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 www.themarkettraders.com and click on Merv's Precious Metals Central . There you will find samples of the Indices and their component stocks plus other publications of interest to gold investors. While at the themarkettraders.com web site please take the time to check out the new Energy Central site for the most comprehensive survey of energy stocks on the internet.Before you invest, Always check your market timing with a Qualified Professional Market Technician


© 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