Time to Bail

Model Gold Portfolio: Neutral (1/13), previous long (12/29)

CTM150113Technical Read: Gold rallied north of its monthly range (119 GLD basis) but then reversed and closed lower. The risk/reward ratio is now overbought.  Nonlinear trading analysis has become very tepid as well. The technical read of holding a long position at the high end of the trading range is challenging. The logical move is to exit and wait for another opportunity. Today’s signal is exit long. The model portfolio is now set to neutral.

Backdrop:

  • Catalyst 1 – The S&P 500 is alternatively bouncing between bullish US economic news (outperforming stagnant Europe) and fears of global economic malaise (the World Bank lowered its outlook for 2015). This is a trendless reading for stocks. Gold is not likely to be buoyed unless stocks drop. Neutral for gold.
  • Catalyst 2 –The US dollar index had a bearish reversal on the 9th, but the bears found limited follow-through selling since. Trendline analysis is still constructive for the greenback. This is negative for gold.
  • 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.”

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