Model Gold Portfolio: “long” Signal date = 12/29
Technical Read: Tuesday’s move high has made the technical read for gold more positive. First, we have a current rebound off a double bottom (Dec 22 and Jan 2). Now we have a breakout of the weekly trading range. Today’s action was a mild reversal that did not make it back through the 12/30 close (i.e. tops become bottoms). The nonlinear analysis that helped get us in? Readings are still constructive. Gold signal is still long.
Backdrop:
- Catalyst 1 – The S&P 500 rallied but no enough to reverse the trading downtrend. In short, the news is dominated by plunging oil (scary good) and European sluggishness (just plain scary). This is positive for gold, at least over the short-term.
- Catalyst 2 –The US dollar index continues to climb, powered by various flight-to-safety scenarios and the anticipation of quantitative easing schemes from the ECB. Because gold is also benefiting from safety buying (or at least gold sellers stepping back), this is neutral.
- The attack by (presumably) ISIS sympathetic gunmen on a French magazine office is now firmly entrenched in the news cycle. This is going to discourage selling in the yellow metal as we go into the weekend.
- Bond Trading Signals. I am offering a similar Mummy process for Treasuries. See the “Bond Trading Signals” tab for more info. Currently available.
- Currency Trading Signals. I will be offering a similar process for currencies (the US Dollar, plus one more) after Jan 31.
GH Garrett – Veteran Commodity Watcher for Conquer the Mummy .com