Tag Archives: Nonlinear trading

3-Week Closing High

Model Gold Portfolio: “long trend” Signal date = 12/29

CTM150109Technical Read: Friday’s close was the highest in 3 weeks. The reversal after the mild sell-off on the 8th is also bullish for the yellow metal. Nonlinear trading analysis is still on the side of the bulls.  The only negative is that it would be nice to get a close above the recent intraday high of 117.5 (Jan 6th GLD basis). The Gold signal is still long.

Backdrop:

  • Catalyst 1 – The S&P 500 2-day rally took the edge off the fear factor associated with the recent decline. My work has this now at neutral. The glow of the recent sell off should gold sellers off balance a while longer. This is still a plus for gold.
  • Catalyst 2 –The US dollar index had a down reversal day on Friday but continues to be in a general uptrend. The recent Labor Department report that unemployment dropped to 5.6% in December, highlights that the US economy is one of the brighter bulbs in the show. This is a plus for the dollar versus other currencies. As long as there is a flight-to-quality element to the global ambience, this is going to be a neutral 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.”

Higher Bias

Model Gold Portfolio: “long” Signal date = 12/29

CTM150107Technical 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

Gyrations

Model Gold Portfolio: “long” Signal date = 12/29

CTM150105Technical Read: The last week of trading featured daily hefty market swings that really did not form a trend, however the price action did confirm the recent lows (112.5 GLD basis). Nonlinear trading analysis indicates the highs established on the 30th (116.25 GLD basis) will not halt the upward pressure. The gold trading signal is still long..

Backdrop:

  • Catalyst 1 – The S&P 500 really continued the rollover today. Chart support is still 50 points away. Big cap stocks are wrestling with global slowing with the new touchstone being Greece (possible leftist gains resulting in some type of Euro decoupling). This is positive for gold.
  • Catalyst 2 –The US dollar index pushed north on the back of many of the reasons stocks are going down. This is normally a headwind for gold prices but as gold is also a candidate for flight-to-safety buying, it can be a near-term neutral.
  • 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

Solid Support = Buy

Model Gold Portfolio: Now (12/29) “long” previous signal 12/01 “exit long”

CTM141229Technical Read: The drop in gold today restored short-term the risk/reward reading to an acceptable level. GLD is finding support at the 112-112.5 level (12/01 and 12/22) and unlike the 114 support level, the nonlinear trading analysis indicates 112 should hold. The holiday truncated trading week should help the bulls too. Gold trading signal: We have a buy. This signal is mostly generated as a result of technical models.

Backdrop:

  • Catalyst 1 – The US dollar index has paused from its recent bullish move. The trend is still up but the greenback may hover here for a while, meaning a limited headwind for gold. If the dollar falls back, it will be a bullish for the yellow metal.
  • Catalyst 2 – The S&P 500 continues to inch its way up but after 8 positive days (I am fudging on the 24th) a pause is warranted here as well. Since a down day is due, this is a mild positive for gold.
  • May the Mummy watchers enjoy the New Year’s Day festivities, but I would also invite you to take time and ponder the new year: the doors that will be opened, the doors that will be closed and the “brief authority” in which we all operate.
  • 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

Low End Bounce

Model Gold Portfolio: Neutral, last signal 12/01 “exit long”

Technical Read: GLD fell near to the bottom end of the range (approx. 112-117.3, GLD basis) then bounced from the low energetically on Friday. This isn’t bad action for the bulls (nonlinear trading analysis CTM141226generally supports this), unfortunately Friday’s 2 pt bounce was sufficient to make the market overbought in the current range bound environment. We will have to see what happens next week. Gold trading signals: No signal.

Backdrop:

  • Catalyst 1 – The US dollar index is still in good shape. Both this and US equities are benefiting from the recent revision in the 3Q GDP up to 5%. This is a very salubrious number from the US and will attract assets from all over the world. Dollar action is bearish for the yellow metal.
  • Catalyst 2 – The S&P 500 is hugging the top end of its recent trading range. Equity bears are looking for technical selling. The bulls are powered by more fundamental factors. The edge is on higher prices here. This is mildly bearish for the gold trading.
  • 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

Bottom End of the Range

Model Gold Portfolio: Neutral, last signal 12/01 “exit long”

CTM141222Technical Read: I posted last time that the GLD 114 nascent support level (partially established Dec 5th and 16th) was not confirmed by nonlinear trading analysis. Today’s drop through the level confirms this opinion. We are still in the range (approx. 112-117.3, GLD basis) but rapidly approaching the low end. The next support level is 112, I think this is more likely to hold than 114, however a buy signal has not been generated yet. No signal.

Backdrop:

  • Catalyst 1 – The UD dollar index has moved north and taken out the monthly highs. Dollar action is bearish for the yellow metal.
  • Catalyst 2 – The S&P 500 is not retreating from the near-term resistance (approx. 2080). Traders should be wary that a breakout is likely. A move higher would be bearish for the yellow metal.
  • Ponderable – May the mummy watchers have a considerable amount of Christmas cheer on the 25th!
  • Bond Trading Signals. I am offering a similar Mummy process for Treasuries. See the “Bond Trading Signals” tab for more info.

GH Garrett – Veteran Commodity Watcher for ConquerTheMummy.com

Mummy (Gold) is Flailing

Model Gold Portfolio: Neutral, last signal 12/01 “exit long”

CTM141218Technical Read: The last 3 trading days have seen considerable  intraday swings but not a lot of directional motion. We are still in the trading range (approx. 112-117.3, GLD basis). Is the 114 level going to hold? The market held on the 5th and 16th, but the last rebound is not convincing. Nonlinear trading analysis is not suggesting it will stabilize here. No signal.

Backdrop:

  • Catalyst 1 – The dollar rallied strongly on Wednesday and had a more muted follow-through today. The Russian ruble crisis is grabbing most of the headlines in this asset class (CNBC was quoting the ruble/dollar on its short-list currency screen). Dollar up is bearish for the yellow metal.
  • Catalyst 2 – The S&P 500 rocketed up over the last two days, putting it near resistance. The “Chiller” network carries the tag line “Scary Good” and to some extent the line has applied to the plunge in crude. The discount in energy prices (simulating a massive tax cut) is the “good.” But there has been concerns that a massive re-pricing of such a major asset class might result in a major financial institution getting caught on the wrong side and failing (ala Long Term Capital Management), hence the “scary” part. Jane Yellen’s comments labeling the plunge a net positive event has helped relieve the stress. The equity rally is a negative for gold.
  • Bond Trading Signals. I am offering a similar Mummy process for Treasuries. See the “Bond Trading Signals” tab for more info.

GH Garrett – Veteran Commodity Watcher for ConquerTheMummy.com