by Soren K.
Overview
Technical systems are calling for continued weakness in Gold and strength in the USD. Technical analysis being what it is, that is correct until it no longer is. What matters is the risk/reward scenarios presented by such analysis. As Statistical traders and Option geeks we do not claim to be technicians. But the tool is useful in conjunction with other factors after one has developed an opinion and is looking for an entry or exit point to implement that opinion.
-Soren K.
Brexit, Volatility, and Value
From our point of view, Gold has been relatively strong. It is among the last markets to go back into pre-Brexit mode. That is a pleasant sight given that hot money makes Gold more volatile on a daily basis than other mediums of exchange. Which also means it could have further room lower. As we said over the last week, our own VBS trade signal has given entries and non profitable 3 day exits to the downside in Gold and Silver. But if you ignored the volatility, as we do not on VBS signals, both markets have softened since. If you ignore the volatility as an investor you will be more comfortable. and yesterday’s DB report gave us impetus to comment on that. If Gold can be $300 higher from where it is now based on one correlation, then why isn’t it? Because of volatility. Price is not value. Price is a snapshot in time. Value is relative price over a period of time. We hope to elaborate on that more later today after the close.
-interactive chart HERE
Is This Gold’s 5 Year Plan?
DEC GOLD Resist: 1333-133670, 134590* ST Trend: Down
(132670) Supprt: 1316-1313, 1300+/- Obj: 1316- TRP: 1345.90
Comment: The market continues to signal a downturn from the congestion of recent weeks and targets a
selloff to 1316 with a chance to wash to 1300-. Corrective congestion must stay under Friday’s high and
tight congestion below 1335 should bear flag, using 1-2 days of choppy sideways action to prepare for
selloffs. A close over 134590* alerts for a reversing turnaround.
DEC SILVER Resist: 19105, 19385-1940* ST Trend: Down
(18945) Supprt: 18495, 18375, 1811- Obj: 1811 TRP: 1940.0
Comment: The market is in a downturn and a close under 18375 could add a wash along 1811-. Any
additional rebounds or corrective congestion will likely stall inside Friday’s range and use sideways
congestion to bear flag and setup for selloffs. A pop over 1914 is near term friendly. However, only a close
over 1940* triggers a reversing turnaround
SEP US DOLLAR Resist: 9557*, 9600-9606, 9670+ ST Trend: Sdwys
(95543) Supprt: 95225, 9594-90, 9472* Obj: None TRP: 95.57
Comment: Friday’s outside bull reversal day leaves a failed downturn and should continue upside action to
attack over 9557* resistance. A close over 9557* confirms a drive to 9670+. Friday’s strong close favors
continuation rallies. Any corrections should be contained to tight congestion in the upper half of Friday’s
rally to bull flag. A close under 9472* is needed to rekindle bear trend forces.
Previous Technical Reports
- Gold Technicals: Weak longs spoofed out yesterday
- Technicals: USD, Gold, Silver Weak. VBS trade update
- Technical Recap: the Silver Short Autopsy
- Technical Brief: Silver defiant, Fischer Fails
Good Luck
Soren K.
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