Model Gold Portfolio: Short Position, (signal= Oct 1)
Technical Read: The past 2 days the GLD posted a tidy loss, equal to approximately a 33% retracement in the rally from the early October (closing) low. The yellow metal has twice now retreated from the rarified air above 120. To work off its overbought status, I would expect an attempt to challenge the lows established earlier in the month.
Backdrop:
- Catalyst 1 – The US dollar closed at 85.93, comfortably above the recent support area (84.80). The superior growth potential in the US (versus Europe) is helping. The recent uptick in interest rates hasn’t hurt either. This is a negative for gold.
- Catalyst 2 – Stock market bears expecting a resumption of the slide were disappointed as the S&P moved to two week highs. An after-market weak earnings report from cyber retailer, Amazon, may prove a challenge in the morning. By the way, my own research is positive for big caps. This is bearish 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
Model Gold Portfolio: Short Position, (signal= Oct 1)
Technical Read: This has been a tough rally for the Mummy website. The initial short position went our way but the 3 week rally has been painful with only two down days. The lift seems to feature a lack of selling. GLD is picking up some resistance just north of the 120 level. A real reversal should dip below 119 this week. Near-term, gold is over bought.
Backdrop:
- Catalyst 1 – The US dollar initially traded lower but reversed to positive by the end of the day. Watch for follow-through buying on Wednesday. A close above 85.50 will be negative for the yellow metal.
- Catalyst 2 – The end-of-week rally in stocks garnered a fair amount of skepticism over the weekend from technically oriented pundits. The Monday/Tuesday follow-through buying has been quite powerful. My indicators do not signal a downtrend is in effect. If equities hold here, some of the fear theme should be sucked out of market watchers. This is bearish 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
“Use nonlinear research to help determine the future direction of the S&P and trading can become much less complex.” GH Garrett
Technical Read: The past 2 days the GLD posted a tidy loss, equal to approximately a 33% retracement in the rally from the early October (closing) low. The yellow metal has twice now retreated from the rarified air above 120. To work off its overbought status, I would expect an attempt to challenge the lows established earlier in the month.