Short technical take on gold and silver

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swissaustrian

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I'm currently on the road, so I'm not really in a position to perform a deep technical analysis, but here are some of my thoughts as of 3-6-12, 1:30 pm:

Gold fell below a key support level today at $1675. Next target would be $ 1630.
The 200 dma is at 1671.
Currently the 50 dma is rapidly approaching the 200 dma. If the 50dma falls below the 200dma, it would be short term bearish.
RSI went from overbought to oversold in just a few days. It has some way to go to the downside to be substantially oversold.
MACD is in neutral territory right now.
Chart
2nsru5f.png


Silver
Silver fell below a key support level today at $33. Next target $ 30
The 200 dma is at $ 34.9.
Currently the 50 dma ($ 32.1) is rapidly approaching the 200 dma from the downside up (for gold, it's the other way arround). If the 50dma breaks the 200dma, it would be short term bullish, would require a rising price of silver, though.
RSI went from overbought to oversold in just a few days. It has some way to go to the downside to be substantially oversold.
MACD is in neutral territory right now.
Chart
35ji8p2.png


In essence, the technical picture for gold and silver is generally the same. I expect one more downday, maybe down just intraday with a higher close than today.
 
Short term, I think we get a short term low tomorrow or the next day.. That really does need to be followed with a key reversal day otherwise, the slide will continue for a a while.

The ideal situation (from an EW perspective) has us bouncing around for a bit and then having our low around april 2nd or 3rd.

Personally.. I'm hoping we get a right shoulder in and then end this nonsense.

GDX-3.jpg
 
I'm hoping for a windfall before the nonsense ends. One last big stack before the sale ends.
 
Hmm, hadn't been looking at the 50/200 cross, that's a bit scary since I'm pretty long (but not so long I couldn't quadruple it or more - on purpose - that's the plan). My dumb system just looks at the 50, and waits for the spot to cross that going up again. Not the finest timing, but pretty reliable for a couple good big trades a year the last few.

I'm also looking at FCX getting hammered mostly due to copper, but they follow gold pretty well too - if I can buy low at a time I think things are improving, that's another pretty sure windfall - but they are harder to trade well than plain old gold is.
Ditto energy. But this looks like a plain old fear driven "risk off" - all correlated, even things that shouldn't be - at the moment.

What does anyone suppose the chances are that this is a bunch of forced liquidation of gold due to other stuff? Normally gold goes up when there's fear - but it seems now someone's fear is being realized and they are getting out of gold to perhaps cover some other bet? Not to bring behavior into a tech analysis discussion, but I think it might be important here. Kind of a sell the news situation?
 
There isn't anywhere near the leverage we saw during the last smashing. I don't think they will fkush them again. That being said, if it wasn't my job to trade and add value through trading by taking punts, I would do about 1/3 tomorrow and wait till the end of the month to do the rest.

The market is going to be a headwind until sentiment is at least normalized.
 
A week later, prices haven't really changed. The 200 dma for gold is now at 1678. It would be good to close above it. Otherwise, the Asians are probably going to drive it over this level during the overnight session anyway.
Currently we're once again trading at the key breakout level where the big upmove in July 2011 started.
Silver had held up pretty well today and is down less in % than gold. the 50dma at 32.78 hasn't been broken. The massive support at 33 got broken shortly, but silver recovered quickly.
Momentum for both metals is slightly negative, but not really a big deal.

EDIT: see: as soon as the 1671 resistance is broken to the upside we get a bigger move. F~+* algos!
 
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I've been noticing the pattern re appearing where gold goes up overseas at night, then back down again here..too bad I don't have a way to trade that.
 
DCFusor said:
I've been noticing the pattern re appearing where gold goes up overseas at night, then back down again here..too bad I don't have a way to trade that.
Click to expand...
Globex futures, over the counter derivatives, and pool accounts are ways I know for overnight trading.
 
Update:
Gold closed at the 200 dma today. If it manages to get above 1707 (50 dma), it would be pretty bullish.
The fact that the low was arround $1625 a few days ago could a indicate a higher low compared to January 2012, also bullish.
Momentum also offers upside potential.
A big move (> 2000) could occur once we get above $1800 again.
11tvfut.png


Silver, volatile as it always is, touched 33.3 (the 50 dma) and bounced back.
It closed below $33 which is the short term resistance which needs to be broken to the upside.
The fact that the low was arround $31 a few days ago could a indicate a higher low compared to January 2012 is bullish.
Due to the strong March 2012 and the relatively weak last quarter of 2011 the 50 dma is about to cross the 200 dma to the upside which would be also bullish.
Momentum also offers upside potential.
A big move (> 50) could occur once we get above $37 again.

67i4vc.png



bull+vs+bear.jpg
 
Thanks sa. I don't watch the charts for technical analysis like the paper traders, so I appreciate the occasional update.
 
It's a bit of a battle today.. they have pushed gold back below the 200.. We really need a clean up or it's likely we retest the lows of last week which personally, i'd like to avoid.
 
With Goldman recommending to go long gold today, something tells me to hang on to my hat for another week or two. I might wait until the sales in May, to be honest.
 
If only the markets were free. I struggle with how much weight to put into TA when the markets are so obviously being pushed around by a few, very strong hands that regulators apparently can't see.
 
The technical picture turned ugly today:
Gold dropped out of the 1675-1625 trading range which had lasted for roughly six weeks.
Today's selloff was extreme from a technical view:
Gold dropped out of the lower bollinger band (green) which is a very rare event for gold. So short term downside potential shouldbe limited. RSI went close to oversold in one day. The silver lining on the horizon: At least gold closed above 1600 after breaking it substantially intraday.
21cuii8.png


Silver closed at long term support of 29.5 (see the beginning of 2011)
It lost 2% like gold. Volume wasn't unusually high, so the selloff was probably only correlation driven (following gold's lead). If volume had mirrored gold's trading volume today, the selloff in silver would have been much more violent on a percentage basis. Again, RSI is close to oversold.

2l8xbab.png


In essence: If we're lucky, then this is the market clearing event, if not we're probably going to test december 2011 lows.
 
Guys - this is great info - I'd like to bring something up. Please correct me if this is in the wrong spot.

Technical action can definitely give us a good idea of entry/exit points for trades, but as a long term investor, I am trying to asses whether or not we can expect long term returns in physical metals. I looked at silver prices going back to 1993 and looked at annualized returns for the average yearly price (this is getting very messy here but we have to choose an entry point). Using the 1993 average daily closing price, it looks like silver has appreciated something like 10% per year.

If we take the 1993 average price and bring it to today, the total annualized return is about 10.1%. For 1994, about 9.8%. For 1995, about 10.4%. For 1996, about 11.3%. For 1997 and 1998, about 12.3%. For 1999, about 13.8%.

This far outpaces any measure of inflation, CPI, SGS or otherwise. When I look at the fundamental factors affecting this, the huge interest in investment demand as well as global monetary policy decisions over the past few years, this type of increase in price is not a surprise. My only conclusion can be, from this admittedly weak and messy analysis, is that PMs have a significant risk premium in them.

This itself is not a reason to panic or sell, but just consider entry points. I admit, I have been buying on the recent weakness to my own financial detriment, but I however have a very long time horizon on the trade.

I'm wondering aloud if others are aware of this and what to make of it. Any thoughts fellas?
 
If silver manages to close in the green today, i.e. above 27.15, we would have a key reversal - the most bullish chart pattern of them all. It opened lower than the previous day, made a spike low at 26.36 and rallied all the way above yesterday's close.

one-day%20key.png


After an up-trend:

The Open must be above yesterday's Close,
The day must make a new High, and
The Close must be below yesterday's Low.

After a down-trend:

The Open must be below yesterday's Close,
The day must make a new Low, and
The Close must be above yesterday's High.

Remember:

The signals are most reliable if they occur after a strong trend. If the trend is weak, so is the signal.
Click to expand...
http://www.incrediblecharts.com/technical/key_reversal.php
 
It's all the more impressive when you consider the downward pressure from the strengthening dollar right now.
 
this + the pressure from gold's weakness.
Still it's 80 minutes until the CRIMEX closing bell. A lot can happen until then...
If we can see the chart pattern, the cartel can do this, too.
 
It would be nice if we managed to get an outside day reversal BUT they really haven't been all that great at marking meaningful lows in gold and silver lately. TOPS? absolutely. Bottoms? Not so much.

The fact silver is up today is meaningful enough IMO. I still wouldn't be surprised if they tried to flush these lows one or two more times.
 
Managed to close slightly in the green. But I would have preferred a rally into the close.
 
Bumping this thread to share some technical analysis from Louise Yamada:
With gold trading near the $1,725 level, and silver firmly above $32, today King World News is pleased to share a piece of legendary technical analyst Louise Yamada’s “Technical Perspectives” report. This information is not available to the public and we are grateful to Louise for sharing her incredible work with KWN readers globally.
...
Click to expand...

More: http://kingworldnews.com/kingworldn...The_Key_Levels_To_Watch_On_Gold_&_Silver.html
 
Approaching the critical $1680 leve in gold. Silver's close to $31.
The worst could be over, but $1650 / 30 is a possibility.
 
swissaustrian said:
This is what a key reversal looks like:

jfdqa9.gif
Click to expand...

We're on track for another key reversal in silver today. It would have to close above $31, preferrably on huge volume and a nice spike.

Last time silver went from 27 to 35 in 2 months after my call...

Key reversal means:
one-day%20key.png


After an up-trend:

The Open must be above yesterday's Close,
The day must make a new High, and
The Close must be below yesterday's Low.

After a down-trend:

The Open must be below yesterday's Close,
The day must make a new Low, and
The Close must be above yesterday's High.

Remember:

The signals are most reliable if they occur after a strong trend. If the trend is weak, so is the signal.
Click to expand...
http://www.incrediblecharts.com/technical/key_reversal.php
 
Hello friends,

I would like to add a Point & Figure Au COMEX chart to this thread.

The scale is $25/ square - 3 square reversal. I consider this scale an intermediate term. I have several hand drawn P & F charts that are larger in scale that I will share with you when breakouts occur.

Gold has recently broke out of the year long consolidation that took it to 1900 in September of 2011. The most recent buy signal occurred in August at 1650 on a #2 Double Top formation (market bottom). I am anticipating a reversal from the current pull-back (row of O's-supply) to a row of X's (demand) after the US Election.
 

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swissaustrian said:
We're on track for another key reversal in silver today. It would have to close above $31, preferrably on huge volume and a nice spike.
...
Click to expand...

Looks like we got the close above $31. Not sure about the volume. It looks like a nice rise into the close though (see red line in chart below):

21b2hvt.gif
 
PMBug said:
Looks like we got the close above $31. Not sure about the volume. It looks like a nice rise into the close though (see red line in chart below):

21b2hvt.gif
Click to expand...

Yeah the main thing we want to see here are two things and they're both outlined dominantly on the weekly chart.

1 ) We need to keep that 50 DMA as support. You'll notice this began back in early 2010, before the climb to $50/ounce. Should this DMA act as support, it will create a bullish divergence which leans toward creating new uptrends (depending on volume)

2) Again, reference the weekly. The MACD is slowly curling. As of 2 trading days ago, the MACD was ready to cross downward. Though a lagging indicator, it usually results in PPS drops. Conversely, MACD crosses pointing northward tend to create PPS appreciation. After today though, it looks like we might not cross downwards, but curl back up in reverse.

One bearish indicator is the PAR SAR. On our weekly you can see this cycle just began, and will probably continue then flip around $28-$30. A test of this key price needs to be confirmd, and wouldn't divert any uptrends because it's merely a test in market sentiment. This happened back in February 2010- then climbed back up over the 50 DMA and used it as support on the following 'cool down' depreciation. THAT is what we want to see again for a move up.

Take these opinions as an opinion. I am no legal advisor or broker.

I think short term, this rally isn't substantial. I believe we'll see a test of $28, $30 again. As much as I hate to say it ;)

Oh and hello everyone I'm new here. Great site BTW. Def up there with my favorite; ZeroHedge. :wave:
 
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PMBug said:
Boom there it is?
Click to expand...

Not quite there yet, PMBug.

This .25 x 3 scale Point & figure chart is close to issuing a buy signal.

The buy signal will occur at 32.75 (green arrow) on a Triple Top with a long tail down formation. Note that the current sell signal at 31.5 was above the LT bullish support line, keeping the trend bullish. Had the sell signal occurred at 31.25 it would have violated the bullish support line turning the chart bearish. The up trend is still intact.
 

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Welcome aboard Au-Myn and ILT

its nice and relaxed here and we dont mind predictions of lower PM prices.

even better if you are amateur sailors with a sense of adventure (-;
 
Au-Myn said:
Not quite there yet, PMBug.

This .25 x 3 scale Point & figure chart is close to issuing a buy signal.

The buy signal will occur at 32.75 (green arrow) on a Triple Top with a long tail down formation. Note that the current sell signal at 31.5 was above the LT bullish support line, keeping the trend bullish. Had the sell signal occurred at 31.25 it would have violated the bullish support line turning the chart bearish. The up trend is still intact.
Click to expand...

Yes sir. Uptrend still there. That 32.75 is a pivot point.
 
ILOVETRADING said:
Yes sir. Uptrend still there. That 32.75 is a pivot point.
Click to expand...

I agree, ILOVETRADING.

We had a pull-back today so the Triple Top will not happen. Should get a reversal up ward, IMO. The next few trading sessions should be very interesting.

I'll create a Silver thread when I update the chart.
 
Silver hitting right at 32.75 at the moment. Will it hold/break through?
 
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