Model Gold Portfolio: Neutral (9/19 signal, exit short)
Technical Read: Today’s gold trading was a turbulent affair. Overnight selling set the stage for a gap-down opening in COMEX trading. There was a morning rally but it failed by the end of the day. At the close, GLD held at the approximate low levels of the recent pause. It was a long day for the bulls (not as long for the Mummy as our signal was neutral). My readings are not indicating significantly lower prices.
Backdrop:
- Catalyst 1 – The strength of the US Dollar is pressuring gold prices and carries with it the whiff of global deflation (dollar strength and deflation are riding in the same car these days, unfortunately it is hearse). This is bearish for gold.
- Catalyst 2 – Hong Kong demonstrations (and the police response) has taken less confrontational stance today as local politicians struggle to find a way out. This is bullish for gold as it is a new (and developing) situation.
- Catalyst 3 – The verification of another victim of the Ebola virus in the US is probably not a market mover. But it does serve as a point of concern of thisng to come.
- US Government Bond research. I am offering a similar process to the gold comments for bonds. See the “Bond” tab for more info. Recently (9/19), the bond readings changed from short to exit short (neutral) and this has been a productive signal.
GH Garrett – Veteran Commodity Watcher for Conquer the Mummy.com
Model Gold Portfolio: Neutral (9/19 signal)
Technical Read: Gold traders prepared to start the week with renewed selling, however the bears did not manage rout the market. The yellow metal continued to hold the recent narrow range. This combined with the over-extended nature of the previous decline gives the gold market a mild bullish edge on the technical read front.
Backdrop:
- Catalyst 1 – The US Dollar trading uptrend continues to be a formidable headwind (bearish) for the gold market. During the weekend this appeared to be the dominant trading story on the metal, BUT…
- Catalyst 2 – Political unrest in Chinese produced stunning images as youthful demonstrators clashed with government police forces, in Hong Kong, through a haze of teargas. The scene brought back memories of Tiananmen Square in 1989. By the end of the day, the protesters remained in the streets but the clash seemed to lose its edge. This outbreak to flared up and caught markets off guard as a new risk factor. This new piece on the global chessboard is bullish for gold.
- US Government Bond research. I am offering a similar process to the gold comments for bonds. See the “Bond” tab for more info. Recently (9/19), the bond readings changed from short to exit short (neutral) and this has been a productive signal. The Hong Kong unrest is positive (flight to quality) for US Treasuries and therefore supportive for gold.
GH Garrett – Veteran Commodity Watcher for Conquer the Mummy.com
Model Gold Portfolio: Neutral (9/19 signal)
Technical Read: Gold traders came into the day with a bearish disposition with pre-Comex trading down $9 dollars (see catalyst 1). Gold opened near the lows of the day. This level was a little lower than the previous near-term bottom (9/22). However, after triggering various sell-stops in place, the market rebounded (see catalyst 2) as sellers were unable to push their advantage. During the recent sustained downtrend, bears have become vulnerable to short-covering. With readings now neutral, traders can now enjoy the luxury of taking a moment to reflect on what the upcoming trend will be and prepare to take advantage of it.
Backdrop:
- Catalyst 1 – The US Dollar broke out to the upside following a narrow trading that terminated on 9/16. The dollar-going-up theme (which is bearish for gold) was the dominant theme going into the day from European trading.
- Catalyst 2 – Initial weakness in equities continued to accelerate during the day and at some point became supportive for gold. Traders began to question if being short gold was really a good idea ahead of a weekend with a possibility of an equity crash. My read is that stocks are not really in a bearish downtrend but today’s action did breakdown from a recent trading range. For now this is bullish for gold.
- US Government Bond research. I am offering a similar process to the gold comments for bonds. See the “Bond” tab for more info. Recently (9/19), the bond signal moved from short to exit short (neutral) and this has been a productive move. This is a white horse of sorts for bullish gold traders as it marks an end to the trend of rising rates.
GH Garrett – Veteran Commodity Watcher for Conquer the Mummy.com
“Use nonlinear research to help determine the future direction of the S&P and trading can become much less complex.” GH Garrett
Technical Read: Today’s gold trading was a turbulent affair. Overnight selling set the stage for a gap-down opening in COMEX trading. There was a morning rally but it failed by the end of the day. At the close, GLD held at the approximate low levels of the recent pause. It was a long day for the bulls (not as long for the Mummy as our signal was neutral). My readings are not indicating significantly lower prices.
