Thursday, 30 May 2013

Gold up, Nikkei down (a lot), US stocks flattish, US dollar down

The US dollar breakout illustrated in the previous post is hitting some resistance. The USDX has had two outside reversals to the downside on the daily chart, often a bearish sign.

Meanwhile, gold is up, US stocks are about flat and the Nikkei took another dive today, this time by 737 points, which is less than the -1000 (-7%) or more point move a week ago but still a nasty move of -5%.

Some gold junior miners and explorers have had a nice pop up, such as Pretium Resources (exploration company). Charts shown below:




Wednesday, 15 May 2013

Ugly gold chart, US dollar breaking out?

The gold chart looks quite nasty at the moment, like a waterfall decline is about to happen. Is it darkest before the dawn as they say? No, it's darkest at midnight, I would think.

The US dollar is having a little surge right now and is right in the teeth of a breakout to the upside, confounding various pundits who have been saying that it is rolling over. No way. These charts were done yesterday and today it looks even more like a breakout with a nice up candle including yesterday's close in the USDX.

I am fascinated that the old inverted Head and Shoulders from 2011 still appears to be in play. The USDX measured move would be approximately 9 points, so the target would be about 90.0 on the USDX. At present, the price is above the inverted H&S neckline and has just now closed above the resistance line at 83.6:

A similar situation was also true for gold that had a huge H&S with the top at $1920 and a target of about $1300 that seemed to be negated by the late 2012 rally to $1800 but then came back into play and the price crashed to $1300 in April 2013.

I am wondering if this is true for H&S patterns in general, somethimes they appear come back into play even when there is an apparent failure of the pattern in the short term. Note the multiple tests of the blue neckline in the USDX weekly chart above, as well as tests of the resistance at around 83.6 shown by the black line.

Gold chart for comparison, not nice. Note that the price today is now about $1410 after another drop and the USDX is now at 83.82 this morning (15 May 2013). $410 for gold is below the resistance at $1430 that was key resistance in late 2010 in the quadruple top around that time (that topping zone was from about 1380-1430). gold is also hugging (but slightly below) the 200-week moving average.

I am beginning to think that gold 'should' have topped at $1430 in late 2010 for much longer but it had a bubble like move to $1920 instead and that is now being wiped out. Next key support to the downside would be at $1309 from early 2011. This was the equivalent of silver's hitting $26 in early 2011 on a correction - and silver is now well below that, although the two are not always in lock step.



Monday, 6 May 2013

Yearly chart for gold long term 1968 - 2013 - outside reversal to the downside forming.

Recently I constructed a long term yearly open-high-low-close (OHLC) chart for gold running from 1968 to 2013 using the excellent data available on the Kitco website for London gold Fix prices.

As it shows, 2012 was still an up year but only perhaps due to a low price at the year start being a bit of a fluke. The high for 2012 was $125 lower than for 2011, for instance.

Even accepting 2012 as an up year, 2013 has shown a massive outside reversal to the downside. Perhaps we can compare this to the part of the chart showing 1980 and 1981 when there was a large similar outside reversal.

When I originally constructed the chart in March, it already showed a reversal to the downside in 2013 but when I revised it today, the reversal is much more pronounced given the move to a $1378 low on the London Fix in mid-April.

I am hoping that this is not a higly bearish sign that the bull market is over - but the price needs to come back very strongly later in 2013 to close the year above $1600 to negate this outside reversal to the downside.

In addition, this yearly chart shows 12 years in a row (2001-2012) without a correction on the yearly scale. It actually makes the 1970s run up look tame on this criterion.

Please click chart to enlarge:

Long Term Yearly Gold OHLC chart 1968-2013 outside reversal to downside forming