Model Gold Portfolio: Neutral (1/13), previous long (12/29)
Technical Read: On Conquerthemummy.com, we have played a pretty traditional strategy of late, signaling a buy (12/29) near the low end of the range and then issuing a sell signal (Jan 13) near the end of the top end of the range. The Swiss National Bank change of policy effectively removed the gold sellers and allowed GLD to break its bounds and move higher. So now what? Gray haired traders will attest that markets seem to try and lure traders into questionable entries. The yellow metal is very extended here. I am waiting for nonlinear trading analysis readings to confirm a safe entry.
- Catalyst 1 – The S&P 500 stagger to put in a mild up day in the wake of Chinese economic moderation. The bluechip index is picking up support at roughly 1990. I have the S&P 500 in a nontrending mode. Neutral for gold, for now.
- Catalyst 2 –The US dollar index ticked up to a new recent closing high. The Swiss National Bank surprise announcement to unpeg the franc from the euro has introduced an atmosphere of uncertainty about upcoming ECB action (the theory being the Swiss were tipped off ahead of time. On the other hand the ECB has garnered quite the reputation for inaction. Dollar strength is normally bearish for gold but with the uncertainty driving them both up, there is no headwind from the dollar, at this point.
- Catalyst 3 – Chinese 4th quarter GDP grew 7.3% (versus year ago numbers), bringing the yearly number to 7.4 %. This is the slowest performance in almost 15 years. Chinese economic moderation is another data point along the way to global deflation. Short-term positive for gold (fear premium) versus long-term negative (lowering tide drops all boats).
- 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 “Nonlinear signals that matter in gold trading.”