Tag Archives: Nonlinear trading

120 Support Holding

Model Gold Portfolio: Now: Long (Bullish) (1/27)

CTM150203Technical Read: Gold suffered another bout of selling today, however prices picked up support (both today and on the 29th) at the 120 level (GLD basis). The 120 level is just above the surprise Swiss bank announcement gap. Nonlinear trading analysis is supportive. We should pick up risk buying going into the weekend as well. The long signal continues to be viable.

Backdrop:

  • Catalyst 1 – The S&P 500 powered off the recent lows but big caps are still range bound (1990-2070, S&P 500 basis). Greek/ECB negotiation headlines were pretty much negative but there are rumors behind the scenes that the Greek government has made assurances to work to make this summer’s debt payments. This is neutral for gold.
  • Ponderable –The Super Bowl (America’s pinnacle pro football game for the year) proved to be a nail biter to the end. The curious ending featured the Seahawks miraculously getting the ball then diving a couple of feet from the goal line. With a talented running back the obvious play was to pound the ball for the score and the win. But fans were astonished to see the Seahawks try a risky over-the-middle pass that was then intercepted. They turned a victory into a loss. The lesson for traders, is to not get too “fancy”. Look for an edge, use the basic trading rules and remember not to overstay the trade.
  • Bond Trading Signals. I am offering a similar Mummy process for Treasuries. See the “Bond Trading Signals” tab for more info. Currently available.
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GH Garrett – Veteran Commodity Watcher for Conquer the Mummy .com “Nonlinear signals that matter in gold trading.”

It is not overbought now!

CTM150129Model Gold Portfolio: Now: Long (Bullish) (1/27)

Technical Read: It was a tough day for the CTM website today. Gold prices were under considerable pressure all day with the GLD fund down almost 3pts (that is big) at its nadir. We are now at the approximate levels of the first day after the Swiss National Bank’s surprise announcement to remove the franc peg for the euro. On the plus side, we should pick up some support (buying) at current levels. More to follow as we move forward. If we pick up support here the buy signal should still be viable.

Backdrop:

  • Catalyst 1 – The S&P 500 moved lower, then bounced off support (1990), then bounced higher for the close. All the day’s action was within the recent trading range. Still Neutral for gold.
  • Catalyst 2 –The US dollar managed to tick up today. Though generally in an uptrend, action over the last couple of days has been range-bound. Neutral for the yellow metal.
  • Catalyst 3 – Crude price came under pressure today as well. It managed to close below the Jan 13th lows, triggering headlines. This was negative (deflationary) action 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.”

Bulls Ahoy

Model Gold Portfolio: Now: Long (Bullish), Previous signal: Neutral (1/13)

CTM150127Technical Read: Nonlinear trading analysis readings are pointing to higher prices in gold. The model portfolio is now long (bullish). In technical terms, the yellow metal broke out of its trading range on Jan 15, powered by an unusual disruption in the currency markets (the Swiss franc was ground zero). The recent pullback (23rd and 26th) failed to pick any follow-through selling. Another leg higher is likely.

Backdrop:

  • Catalyst 1 – The S&P 500 tumbled down 27 ½ points in the aftermath renewed concerns that Greece will seek concessions (Prime Minister Tsipras’ election is the catalyst for this) to reduce the country’s indebtedness and possibly ease up on the austerity. The two goals don’t seem to mesh unless the bond holders take a haircut. Anyway, I’m not sure today’s move signals a down trend in big caps yet. Neutral for gold.
  • Catalyst 2 –The US dollar index sold off as the bulls got a little ahead of themselves (something all traders have to watch for, no matter how pronounced the trend). There are a lot of poles out there, stuck in the ground, with various heads of traders-gone-by adorning the tops. Any dollar moderation is positive for gold however the technical damage to the dollar was not great.
  • Catalyst 3 – This week marks the 70th anniversary of the liberation of Auschwitz (an infamous death camp, for the under 30 crowd). The ponderable is: Can something like this happen again? If a government gets too much power, I would say yes.
  • 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.”

Eye of the Needle

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

CTM150123Technical Read: Gold paused its upward move the last three trading sessions. The yellow metal is now balanced on the edge: overbought (bearish factor) but trending up (bullish factor) as well. The trick is getting an entry and not getting whipsawed. I am waiting for nonlinear trading analysis readings to confirm a safe entry.

Backdrop:

  • Catalyst 1 – The S&P 500 rebounded off the recent lows (14th and 16th) and the upward forecast is promising. Mildly bearish for gold..
  • Catalyst 2 –The US dollar index advanced as recent events (Swiss National Bank surprise announcement and the ECB quantitative $1.3t program) are underpending two classic fundamental factors (uncertainty and a weakening euro) that are positive for the greenback. This would normally be a considerable headwind for gold but is a neutral for now as both factors are supportive for the yellow metal as well.
  • Catalyst 3 – The recent death of Saudi Arabian King Abdullah provided a blip headline on the news front this week. The quick succession plan by the Saudi royal family seemed to minimize possible market disruptions, The question is: Can Islamic extremists use their influence to destabilize the kingdom in the future?
  • 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.”

New Paradigm

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

CTM150120Technical 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.

Backdrop:

  • 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.”

The Swiss did What?

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

CTM150115Technical Read: Gold leapt on the back of early morning reports that the Swiss National Bank initiated an unexpected policy change (see Catalyst 2). The Swiss central bank neglected to tip Conquerthemummy.com off ahead of time. The 1/13 exit signal came on the back of a flat lining nonlinear trading analysis readings and the fact that price had become overbought, not to mention was now trading at the upper end of the range (119 GLD basis). Now what?  The event powered jump put prices above the recent range but nonlinear readings are still not overly bullish. The reasonable decision is to hold our model portfolio as neutral and wait for events to clarify. I would also take this time to reiterate some good news, we closed out a positive trade and were not caught short by the news-oriented event.

Backdrop:

  • Catalyst 1 – The S&P 500 took the hit on the back of the Swiss news. Blue chips had already worked off overbought technical readings with previous selling. We will have to evaluate this in light of more time. Near-term support is about 15 points away. Neutral for gold, for now.
  • Catalyst 2 –The US dollar index had a wild, though ultimately positive day as the Swiss central bank announced it would no longer hold the Swiss franc to a fixed level with the euro. Global markets were caught by surprise. The question is why did the Swiss do this? The leading theory is that they were tipped off about coming ECB action (quantitative easing) and wanted to get out of the way ahead of time. This was positive for gold today.
  • 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.”

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.”

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