YeOldGoldNugget's Blog Spot: Moving Average

Showing posts with label Moving Average. Show all posts

Tuesday, December 29, 2009

The Dollar's Demise and Gold's Resurrection

By 79Atoms on Tuesday, December 29, 2009

The Dollar Consolidates while the Markets recover.

US Dollar Daily Chart

Chart is courtesy of marketclub.
Marketclub - US Dollar Trend Analysis

(What's this?)

Here is a short follow up on my most recent article 'US Dollar Extends Gains' written on December the 22nd. In that article I summarized the following :

To summarize, short term, yes we are in an UP trend, the chart confirms that. However, RSI has reached overbought. MACD is trending higher but with choppy performance. We are trading farther and farther away from the 30 and 50 MA so a consolidation is getting more and more likely to happen from here.

Mr. market was soon to follow this advice cause December 23 was the start of the consolidation/correction for the dollar after extending its gains from a low of 74.356 on December 2 to a high of 78.449 on December the 22nd.

Moving Averages

10 MA : 77.784
30 MA : 76.349
50 MA : 75.916

As of writing the dollar is trading at 77.388 and is thus already trading below the 10 MA. December 27 saw us crossing below the rising trend line indicating that the steam is out of this kettle for sure!

Looking at the chart and all indicators I reckon looking up from here is wishful for those who are long dollar but not very realistic. Down is where I would look. Short term and long term. Market manipulation excluded then cause I am no match for that.

I say manipulation because if you have a look at the charts from Early December and in particular December the 2nd. The dollar starts to rise and right at that time gold starts to drops. Now, OK, I can understand all the dollar/gold relation and safe haven and such...

...but what I do not get is why even after having such a crisis, after knowing what the dollar is worth now or actually ISN'T worth after the stimulus packages, TARP, FED printing presses, Bank bailouts, Company bailouts,...investors are still buying dollars. So...who are these very first buyers driving up the price and starting this Christmas rally in the dollar?

This is no rally based on valid fundamentals. NO Sirree!

So, let me see if I understand Mr. Market? Ok?

So, December 2, gold breaks down and the dollar rallies or vice versa, the dollar rallies and gold breaks down. So, later we get word from the European mainland that Greece, Spain and Ireland are in deep...um...horse manure? Is that the right noun to use? Up to their arm pits in the proverbial debt-pit.

The Dollar's Demise - A full motion picture Documentary

So, because the Euro takes a beating, the dollar who for months has had the leading role in our documentary as being the biggest decliner now steps aside and lets the euro play leading role for a while?

Hm? What does not sound right in this motion picture?

This sounds to me like too much artistic freedom on behalf of the director of this documentary. My original remarks remain, unless the dollar succeeds to AND close above 80.00 and STAY above 80.00 the dollar is in my books at least very much in a downward trend.

US Dollar Weekly Chart

US Dollar Weekly Chart December 29, 2009

Chart is courtesy of marketclub.
Marketclub - US Dollar Trend Analysis

(What's this?)

Weekly then, well this hasn't improved much. I'm still not swayed, not even by the rally we had since the start of December. It is still too insignificant a move to even be treated as such. For me, I would stay far far far away from any long positions in the dollar for the moment.

From the MACD indicator we can see this is still clearly trending below the center line and thus still bearish as indicator. Histogram is also declining.

Dowsing Rod - Image from http://skepticreport.com/sr/?p=564

The ADX or Average Directional Indicator is in some sort of limbo on the weekly chart? Don't know if this is a chart bug or if the -DI and the +DI just happen to run parallel for the last couple of days.

Maybe it is forming a wishing rod and hoping then to break it in the right place and have their wish come true? Who knows?
Maybe even a dowsing rod? Searching for water? No,..must be an oil dowsing rod then.

Anyway, until this market takes direction again ADX is probably not a good indicator here on the weekly besides than the fact that we see that there is some sort of sideways action to expect perhaps.

Long term like I said, until we clearly break above 80.00 I consider the trend which was downwards still very much intact. Despite the short rally.

I don't know how many more lessons Mr.Market needs but sooner or later this dollar/gold relation will be gone and out the door for GOOD!

YeOldGoldNugget's links of interest

Monday, December 21, 2009

Gold Heading to $1050?

By 79Atoms on Monday, December 21, 2009

Gold Spot Daily Chart

Chart is courtesy of marketclub.
Marketclub - Gold Spot Trend Analysis

(What's this?)

As of writing gold is already trading at $1088.35. It would seem and judging from the ADX indicator that the force of downward moves is increasing which means we could be looking further downwards.

Our 10 Moving Average is already a long way away at $1118 so daily and weekly we have run out of our closest supports.

As you see I've thus drawn a support at $1050. However, that is the first lowest level I'm looking at. There could be supports in between.

Gold Spot 5-Day Chart

Chart is courtesy of marketclub.
Marketclub - Gold Spot Trend Analysis

(What's this?)

From the 5-Day chart we see that the level around $1095 was taken out so another indicator which tells me we should look for a lower support.

So, what support remains there besides the $1050? Well, I've added two Fibonacci charts, one which has as start the latest rally which started late October and one which covers the entire rally from the beginning of September.

So, take your pick I'd say. Normally, when a stock retraces, traders look for a bounce from either the 61.8% or the 50.0% Fibonacci Retracement lines. So, only supports left would be found on the complete Fibonacci chart.

Gold Spot Daily Fibonacci Retracements

Gold Spot Daily Fibonacci Retracements Late October - December

Gold Spot Daily Fibonacci Retracements September - December

Charts courtesy of marketclub.
Marketclub - Gold Spot Trend Analysis

(What's this?)

Just know that daily and thus short term, the downside has again increased so take care with those long positions. Gold is not correcting on the rally from late October but it is correcting on the entire rally which started early September so $1050 would indeed be a great target.

Gold Spot Weekly Chart

Gold Spot Weekly Chart December 21, 2009

Chart is courtesy of marketclub.
Marketclub - Gold Spot Trend Analysis

(What's this?)

On the weekly, the UP trend is still confirmed by the MACD, the ADX and the strong performance gold has had.

Not much more I can say here. I need to see the market perform after this day before I can second guess any further. One thing to watch is of course the dollar! I have absolutely NO frickin' idea on what basis this thing is rallying but it probably will have some very vague reason??? If anyone knows please enlighten me.

Jim Rogers has the following to say :

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Friday, December 18, 2009

Orko Silver Chart December 18, 2009

By 79Atoms on Friday, December 18, 2009

Orko Silver Marches Onwards.

Orko Silver Daily Chart

Chart is courtesy of marketclub.
Marketclub - Orko Silver Corp. Trend Analysis

(What's this?)

Looking at the daily chart we see Orko Silver again since the last two days trading below the 10 MA. With the whole correction in gold and silver I must say that Orko Silver held up pretty well.

The daily chart all in all is, well...not extremely good. Not a total disaster but no total happy camp either. Very short term this could go further down. That is if I go by the negative divergence which I see on the chart. You see, while Orko Silvers price is trading higher from late November to mid December, on the MACD we already see a decline which is a negative signal and thus bearish. We are also trading below the 10 Moving Average. RSI or Relative Strength Index is just about nearing 50.

With this bearish thought in mind I have to say, looking back at the combined action of these last days...doesn't really seem like there is a lot of downside here. So will this negative divergence lead us to a price of $1.14 which coincides with the 30 MA or will we need a correction to the 50 MA at $1.06?

Well, I for one, I didn't put it on the chart but there does also seem to be some support at $1.10 so I'm looking at either the 30 MA at $1.14 or somewhere around $1.10. Anything below that is shopping season, my 2 gold nuggets then.

Looking at the volume leads me only to positive thoughts. Nice, steady volume, plenty of action for all to either sell or buy their shares. MA volume is running for the last month with an average volume starting with 250K and running up to 450K. And those are averages mind you!!

So, to summarize, daily and thus in short term one might expect either a little bit down to levels I indicated above or we will go further sideways like we have done the last couple of days.

Orko Silver Weekly Chart

Orko Silver Weekly Chart December 18, 2009

Chart is courtesy of marketclub.
Marketclub - Orko Silver Corp. Trend Analysis

(What's this?)

Weekly is a whole different matter. The little correction and also the slowdown in the up trend is but a mere blip on the weekly chart. On the weekly there is no sign of any bearish signals. That is NONE!

We are still steadily trading above all Moving Averages. Volume is steady and increasing when looked at the MA. (the red arrow)

MACD shows a slight decrease in the histogram but on the weekly still too small to make any difference to the leading trend...which is still UP!

YeOldGoldNugget's links of interest

Thursday, December 17, 2009

Free Email Trading Course

By 79Atoms on Thursday, December 17, 2009

Again, a lot of new readers with perhaps a lot of questions about the terms I use when I do my charts and what to look out for. Here is the article with the email trading course sign up from MarketClub which highlights most of these points. Have a read and see if it is anything which might add to your trading skills. There is an unsubscribe link when you are done which works by the way. Anyway, here is the article :

First of all I want to thank you for having me as a guest today!

My name is Adam Hewison. You might want to Google Me to confirm what I am about to share with you.

There are plenty of people out there that create 'exclusive email courses' with little or no credentials to actually backup their teachings. So, I think it’s right that I share a little bit about myself with you before we even start.

I was a former floor trader on the IMM, IOM, NYFE and LIFFE as well as a risk manager of a large, multinational corporation in Geneva, Switzerland. I also have written books on forex trading and trend following. In 1995, I founded INO.com and later co-founded MarketClub. I’ve been in the trading biz for over three decades and have seen it all. I created this course as a way to give back and share trading tips and techniques that I still use in my trading today.

In my Free Mini Email Course, I will show and explain the tools and strategies you need to increase your success rate in the marketplace.

The importance of psychology in price movement
How to spot mega trends
Understanding of technical price objectives
How to picture price objectives
How to trade with moving averages
How to use point and figure trading techniques
How to use the RSI indicator
How to correctly use stochastics in your trading
How to use the ADX indicator to capture trends
How to capitalize on natural market cycles.

Plus, you will you will learn all about fibonacci retracements, MACD, Bollinger Bands and much more.

Just fill out the form and we’ll get you started right away.

Every success,
Adam Hewison
President, INO.com & Co-Creator, MarketClub

Saturday, December 12, 2009

Will Gold Find Support at $1100?

By 79Atoms on Saturday, December 12, 2009

Gold Spot Daily Chart

Chart is courtesy of marketclub.
Marketclub - Gold Spot Trend Analysis

(What's this?)

After hitting a high of $1226.37 on December the 2th, gold is now hovering around $1115 which is very near the area of where we could find some additional support. Early November from the 10th to the 14th we also held around these prices indicating possible support. Also if you quickly look on the weekly chart you will see that the 10 MA which is around that same level $1100 so varying indicators which could indicate that the $1100 could provide more support than earlier levels.

Looking at the Relative Strength Index shows me gold is getting near oversold. On the chart you will see that on the daily chart gold does not get that far below 30 before turning back up.

Credit Suisse 1 Gram Gold Bar - Copyright © 2009 Northwest Territorial Mint

The Moving Average Convergence Divergence shows a serious correction! Very wide gap indeed. Lets see if the MACD-histogram declines from here. Sharp increases in the MACD-Histogram indicate that MACD is rising faster than the 9-day Exponential Moving Average and bullish momentum is strengthening. Sharp declines in the MACD-Histogram indicate that MACD is falling faster than its 9-day EMA and bearish momentum is increasing.

What we thus need to see is the MACD-Histogram cubes slowly decreasing in size and that blue line slowly bending over and crossing above the red line right on the center line. Oh, I'm day-dreaming again I see. Well, that's what I would like to see happen anyway.

Lets see what the $1100 will provide as support before we continue looking downwards, OK?

Gold Spot Fibonacci Retracement

Gold Spot Daily Chart Fibonacci December 11, 2009

Included is the daily chart with the Fibonacci Retracements. We are now sorta hovering around the 38.2 and 50% retracement. The 50.0% stands at around $1125 and is normally the level which traders look at and mostly expect a bounce from. If that breaks there is however still the 38.2% which stands at around that same $1100 level.

Gold Spot Weekly Chart

Gold Spot Weekly Chart December 11, 2009

Chart is courtesy of marketclub.
Marketclub - Gold Spot Trend Analysis

(What's this?)

On to the weekly then, well, I'm still looking at an extremely bullish chart, though one that is now undergoing a correction. How deep that correction will be all depends on the buyers and the sellers. I can scream and shout to all my hearts intent how I feel gold has consolidated enough and how we are again at a level where we could see additional buyers popping up and such and such....but we will have to let the market decide.

Like you already could read earlier, there is the support from the 10 MA at $1100, there also is the center trend line providing possible additional support. The 30 MA which I'm hoping and guessing we won't hit stands at $1000.

RSI has now left the overbought zone and gold is at least technically speaking, buy-able again.

MACD then, difficult to tell. Well, there is the blue line which is clearly turning down with a declining MACD-Histogram and with that a narrowing gap. Normally those are bearish but it is just too early to tell what will happen from here.

I think I just might keep on the sidelines for a little while longer. I have a feeling the market's desire is for this to hit $1100 level before deciding to hopefully bottom out here and continue our leg up.
Just keep a close eye on the dollar, looking back to Friday's action it would seem there are some very swift and speedy traders out there. Dollar up, gold down. Wham! Like clockwork, right at the very same moment.

YeOldGoldNugget's links of interest

Friday, October 30, 2009

Gold and the Gold Bugs Index (HUI).

By 79Atoms on Friday, October 30, 2009

Gold Bugs Index (HUI)

Chart is courtesy of marketclub.
Marketclub - Gold Bugs Index (HUI) Trend Analysis.

Today we will be looking at the Gold Bugs Index, better known as the HUI Index. I assume most of my readers will know that there are two major gold indices, one of them is the HUI Index and the other is the Philadelphia Gold and Silver Sector Index or XAU Index. There are others of course but I will focus on these ones for now and in particular the HUI Index. The HUI Index is listed on the American Stock Exchange while the XAU Index is listed on the Philadelphia Stock Exchange. So, why two indexes? Well, the HUI Index is solely comprised of mining stocks that do not hedge their gold prices for more than a year-and-a-half into the future.

That is thus a very big difference and one which should be understood and remembered. Why? Well, because that makes a huge difference investment wise. If you think prices of gold are going to rise than I as an investor would rather be invested in the HUI Index than in the XAU Index. So, with a rise in gold prices you will see more gains on the HUI Index than on the XAU Index. Then again, you will also be hit harder when gold prices fall.

So, chart wise I'm sure most will have already looked at the trend lines I've placed upon the chart. Now, honestly, you tell me, ain't those two of the most beautiful trend lines you've ever seen?

Now, I will be the last person telling you that you should let a pair of simple trend lines guide you in your investment decisions! However, they are there! Aren't they? Right there on the chart, back from the lows of when the crisis was in full bloom until where we are now. Perfect trend line!

So, where does that leave us now? Well, I'd say at a critical juncture again. I'd say the fundamentals, real value wise, for the whole gold and silver market are far too great and far surpass every other sector out there, so based on that I can definitely understand why the HUI Index has held and traded around the 380 - 400 for the last three days.

I will make a wager that most every banker, analyst, chartist, broker, fund manager and practically all you can think that invest in gold are looking at those very same trend lines I've drawn. Only difference, all will draw their very own conclusions, some wrong, some right. Time will tell who got it right in the end.

So, I must conclude that yes indeed, those trend lines are just two plain lines on a chart, however, in this case they provide a very clear picture of where we are right now. I think most will agree if I call it standing at the bottom of our lower trend line. All agreed?

So, based on golds strong fundamentals as leading indicator for the HUI Index, the fact that we are at the low of our trend line, the fact that Stochastics is already in the overbought zone and turning back up, the fact that we have traded for 3 days with the same range of prices and not breaking down the trend line makes we wonder if this is not a bottom in the making?

Bad would be the downward trending MACD I'm looking at which is looking to go below zero which indicates a confirmed downtrend is in the works. But luckily, the MACD might very well turn back up from here. Worst case, the HUI Index will look up the 200 Moving Average at around 350 and will find support there.

Well, if we do turn up from here which I think we will, then we are looking at a long term target of around 480 and if it breaks the upper trend line then I'm even more bullish.

YeOldGoldNugget's links of interest

Wednesday, October 28, 2009

Orko Silver Chart October 28, 2009

By 79Atoms on Wednesday, October 28, 2009

Orko Silver Daily Chart

Chart is courtesy of marketclub.
Marketclub - Orko Silver Corp. Trend Analysis.

A quick update after a couple hours into trading. The downward force on the commodities markets is getting too strong for Orko Silver to bear. The 0.90 support has broken and we are looking for support of the 50 MA line around 0.85. If that doesn't hold this stock will go down to around 0.81 before we will see selling pressure decline and buying increase.

Like I said yesterday, we will see 1020 in gold and 16.00 in silver before we will see renewed interest.

Orko Silver Daily Chart Update

Chart is courtesy of marketclub.
Marketclub - Orko Silver Corp. Trend Analysis.

My earlier chart has an error on it. The Fibonacci Retracement lines should be drawn like on the updated chart. The 0.90 was a support but in my updated chart this coincides with the 38.2% Retracement level. The top should coincide with the 100% level and the bottom and thus, the start of the uptrend, should coincide with the 0% Fibonacci Retracement level. We are now retracing from an earlier uptrend.

2009 Copyright Northwest Territorial Mint - 100oz Bar

As you can see from the chart we are now hovering at 0.87 which coincides with the 23.6% Retracement level. Normally, when a stock has had an uptrend and we get a pullback, traders look at a bounce back up from either the 61.8% or 50% level. Now, since we have already broken through those levels it is unlikely the 23.6% Retracement level will act as a support. Only thing that will add a bit of support around the level where we are now is the 50 MA line which coincides with somewhere around 0.85.

If tomorrow the 16.00 for silver holds then Orko Silver will hold around 0.85 and 0.87, if it not only holds but we get a bounce up for silver then most everyone will decide the bottom has been set and will start buying again and we might get a close in the green. That would be the optimistic picture which I'm holding on to for now.

Google Finance Sector Summary Chart

Chart is courtesy of Google Finance

Some heavy losses across the board and the commodities markets are bearing the brunt of taking the biggest losses inflicted today.

Gold Spot Daily Chart

Chart is courtesy of marketclub.
Marketclub - Gold Spot Trend Analysis.

As you can see from the gold chart I posted. There is the potential for an even bigger drop, that is if the 1017 or 1020 supports don't hold. Just as you know, it is not out of the ordinary for gold to make such a correction before heading further up. The RSI and stochastics are indicating we are at or very near oversold levels so a possible reversal could be soon knocking at the door.

Just pray or whatever one does, rub your gold coin, that the 1017 and 1020 hold cause if they don't better make sure to get some money on the sides cause it will be bargain shopping time again across the junior markets. For the day-traders, get out there where you have enough profits and get in where prices are cheap and fundamentals are strong.

Don't take losses easily, do so only after the fundamentals of the company you are invested in have changed for the worse.

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Tuesday, October 27, 2009

Orko Silver Chart October 27, 2009

By 79Atoms on Tuesday, October 27, 2009

Orko Silver Daily Chart

Chart is courtesy of marketclub.
Marketclub - Orko Silver Corp. Trend Analysis.

We basically have the same situation we had yesterday. Orko Silver opened lower at 0.92. There was some heavy selling going on in the morning hours with prices ranging between 0.91 and 0.92. I counted about 120K being sold. That went on until a little before eleven cause that is when the first buying of the day started. A couple of bids and blocks around 0.92, 0.93 and 0.94 by TD Securities.

Right after that UBS Securities Canada Inc. turned up as a seller bringing the price down to about 0.91, that was around noon. However the afternoon was a whole different ballgame! Buying started around one pm and moved the price to 0.92. A couple solid blocks of 10K, 7.5K and a couple more brought us into a close of 0.940 0.000 (0.00%). The entire afternoon saw no more sellers.

So again a pretty good day for Orko Silver all considering. Very very good day, again confirming Orko Silvers share price suffers less of a bumpier ride during this current correction. Again, the more we hold around these levels the bigger a potential leg up will be. I call that the slingshot effect. This happens when during a correction, a stock has already built enough fundamentals and seen plenty of buying to hold between a certain range.

When this correction in gold and silver is over and everyone who had to cover has covered then not only will buying start again, mostly everyone else who sees the chart of Orko Silver will see the trading range and will try to get in before we head to even higher prices. Like a steam train this is, slow starter but once she gets going you try to stop a 150 ton pile of moving silver!

After this correction in gold and silver is over we will be in my opinion definitely be ready for the next leg up and getting us above and beyond 1.00. That correction might be over this week or early November, depending on when the dollar gives up after its last final rally before heading down and in the direction of the first real stop...the 72.00.

That is when gold will shine again. I'll you this, gold will in my opinion first see 1020 before it sees 1100. That goes the same for silver which could see a bigger down move percentage wise than gold as with silver it may very be more violent than with gold.

When I look at the daily chart of silver the short term picture indeed does not look very bright. However looking at a weekly chart of silver the story changes completely. I will post the charts with a couple comments but I will first let the chart do the talking on this one.

Silver Spot Weekly Chart

Chart is courtesy of marketclub.
Marketclub - Silver Spot Trend Analysis.

That crossover you see there of the 50 MA and the 200 MA is not just a crossover, in TA that has a name. It is called a golden crossover. Now, doesn't that sound nice? Now, looking at the naming, would you say that is bullish or bearish crossover then?

Now, if it were called a zinc crossover then I would know the answer...so yeah, that is definitely a bullish sign. It happens when the 50 MA line crosses above the 200 MA line.

So, that does bode well going into November. I don't know when short term we will get a bottom in silver. This could turn up tomorrow or it could go and look up 16.00 again which was the high of June.

Silver Spot Daily Chart

Chart is courtesy of marketclub.
Marketclub - Silver Spot Trend Analysis.

As long as our White Knights keep silver above 16.00 then the trend will remain upwards. I don't really think silver needs that big of a correction before heading further up. Let us wait and see what happens, there still is a downward force working which like I said earlier could take us into November. By then all the apples have been shaken from the tree and we can begin our next cycle again.

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