Saturday, November 12, 2011
Trader Dan on King World News Weekly Metals Wrap
Please click on the following link to listen to my regular weekly interview with Eric King on the KWN Weekly Metals Wrap.
Friday, November 11, 2011
12 Hour Gold Chart
Risk trades were back on in several markets today with equities rallying, the US Dollar selling off and both gold and silver moving higher. Once again, copper was up and thus so was silver. The link between those two metals lately has been quite tight.
Gold bounced from support near $1750 and is moving back to towards $1800 once again. You might recall from the other day that I mentioned a large number of fresh short positions were shoved on at $1800 and above. We will see how those new bears defend those fresh positions. Bulls can give them plenty of headaches if they can muster the strength to push price through that recent high. Failing that, the market will see some liquidation from both floor traders and shorter term oriented longs who will note the inability to better that level and take that as a signal to book some profits.
Aiding the cause of the gold bulls is the very strong showing in the HUI today as it is currently up better than 3% and is above the 600 level on that index's chart. A strong close above this level to end the week would be very constructive on the weekly chart and would set the sector to mount a charge to the 610 level early next week. Failing to hold above 600 would discourage some of the bulls.
Initial downside chart support lies just below 580.
Gold bounced from support near $1750 and is moving back to towards $1800 once again. You might recall from the other day that I mentioned a large number of fresh short positions were shoved on at $1800 and above. We will see how those new bears defend those fresh positions. Bulls can give them plenty of headaches if they can muster the strength to push price through that recent high. Failing that, the market will see some liquidation from both floor traders and shorter term oriented longs who will note the inability to better that level and take that as a signal to book some profits.
Aiding the cause of the gold bulls is the very strong showing in the HUI today as it is currently up better than 3% and is above the 600 level on that index's chart. A strong close above this level to end the week would be very constructive on the weekly chart and would set the sector to mount a charge to the 610 level early next week. Failing to hold above 600 would discourage some of the bulls.
Initial downside chart support lies just below 580.
Sincere Gratitude and Respect to our Veterans
Thank you for your Service, Dedication, Sacrifice, Honor and Commitment to our Nation and its Freedom
Thursday, November 10, 2011
Tommy Turkey and Sides are getting more expensive
The Wall Street Journal is reporting that the cost of an annual Thanksgiving turkey dinner for 10 has risen this year to $49.20; a $5.73 increase over the cost of the same dinner last year ($43.47). That is an increase of a bit over 13%.
No worries however - keep moving; nothing to see here. Our illustrious lords that "cook" the official inflation numbers will no doubt be able to deal with this by substituting quail or cornish hens for Tommy and Timmy turkey.
No worries however - keep moving; nothing to see here. Our illustrious lords that "cook" the official inflation numbers will no doubt be able to deal with this by substituting quail or cornish hens for Tommy and Timmy turkey.
12 Hour Gold Chart
Gold ran into selling pressure today as both safe havens, the bond market and the gold market, were taken lower after the equity markets reacted to a supposed improvement in the US unemployment claims. Personally this number is a very poor indicator to base trading decisions upon but the equity markets are almost desperate to find some good news somewhere.
They even seized on Berlusconi appointing an interim government rather than holding elections further down the road. That was viewed to be friendly for stocks. Heck, it had people buying the Euro today?! Go figure.
Strangely enough, the hedgies were selling the commodity markets in general today with the energy sector seemingly bucking that trend but the metals and grains did not. The result was that the CCI moved lower with the CRB slightly higher, as it is more heavily weighted in energies and skewed in that direction.
Gold did find good buying below the $1750 level and is currently trading near $1760 as I write this. We'll have to see how Asia responds overnight but we certainly have some solid support and resistance levels to work off of thus far. If we stay above $1725- $1720 we should range trade with some chart resistance initially seen just shy of $1780.
The HUI was lower today but it recovered a rather goodly portion of its losses heading into the closing bell. There is chart support near 570 initially with another round of potential buying emerging closer to 565. Keep in mind that this is an index comprised of various mining companies so when I mention support and resistance levels, this is simply picking up on what is occuring in the shares of those companies which comprise this particular index.
The HUI will now have to convincingly CLOSE above 610 to see a solid trending move higher in the mining sector commence. A closing downside push through 540 would signal some additional weakness otherwise the shares look to be forging out another consolidation pattern.
They even seized on Berlusconi appointing an interim government rather than holding elections further down the road. That was viewed to be friendly for stocks. Heck, it had people buying the Euro today?! Go figure.
Strangely enough, the hedgies were selling the commodity markets in general today with the energy sector seemingly bucking that trend but the metals and grains did not. The result was that the CCI moved lower with the CRB slightly higher, as it is more heavily weighted in energies and skewed in that direction.
Gold did find good buying below the $1750 level and is currently trading near $1760 as I write this. We'll have to see how Asia responds overnight but we certainly have some solid support and resistance levels to work off of thus far. If we stay above $1725- $1720 we should range trade with some chart resistance initially seen just shy of $1780.
The HUI was lower today but it recovered a rather goodly portion of its losses heading into the closing bell. There is chart support near 570 initially with another round of potential buying emerging closer to 565. Keep in mind that this is an index comprised of various mining companies so when I mention support and resistance levels, this is simply picking up on what is occuring in the shares of those companies which comprise this particular index.
The HUI will now have to convincingly CLOSE above 610 to see a solid trending move higher in the mining sector commence. A closing downside push through 540 would signal some additional weakness otherwise the shares look to be forging out another consolidation pattern.
Wednesday, November 9, 2011
12 Hour Gold Chart
Gold failed to extend past the psychological level of $1,800 and is now moving lower towards the first level of chart support just above $1750 and extending down towards $1725 - $1720.
It was to be expected such a large rally in the US Dollar during today's session (Wednesday) would provide some strong headwinds to any move higher in gold. That and the fact that the CCI was hammered lower today as anything remotely resembling a risk trade was yanked off.
This evening, gold is moving lower as there is follow through selling across both the base metals and the precious metals with only slight weakness being seen in the Dollar. Clearly traders are concerned about the woes in Europe.
As long as any setback in gold holds ABOVE $1680, the pattern that will develop is more consistent with a market taking a breather. A drop below this level, that cannot recover it within the same session, will forebode a drop back towards $1640 - $1625.
It was to be expected such a large rally in the US Dollar during today's session (Wednesday) would provide some strong headwinds to any move higher in gold. That and the fact that the CCI was hammered lower today as anything remotely resembling a risk trade was yanked off.
This evening, gold is moving lower as there is follow through selling across both the base metals and the precious metals with only slight weakness being seen in the Dollar. Clearly traders are concerned about the woes in Europe.
As long as any setback in gold holds ABOVE $1680, the pattern that will develop is more consistent with a market taking a breather. A drop below this level, that cannot recover it within the same session, will forebode a drop back towards $1640 - $1625.
HUI holding in relation to the S&P 500
Traders/investors looking to take a defensive posture in the equity markets continue to see the mining sector as a place in which to find some temporary shelter. While the HUI is getting pulled lower today alongside the entirety of the US equity markets, the sector is holding in relation to the broader market.
A good trade has been to spread the miners against the S&P, a trade which I mentioned here some time ago would be a winner for the hedge funds instead of the shortsighted spread trade involving the bullion markets and the mining shares. The hedgies were able to play that trade and profit from it for a while but they overstayed their time with it as investors began warming to the solid profits being generated by many of the mining companies. It also did not hurt the bullish cause to see some of the gold miners increasing their dividend payout.
For a look at the HUI in isolation, you can see that the index has filled the former gap region but failed to rally through the top of that gap and hold above that level. It should find some additional buying support back down at the bottom of this same gap near the 570 level if the dip buyers are going to still feel comfortable committing capital to the sector in the midst of this instability in Europe.
A good trade has been to spread the miners against the S&P, a trade which I mentioned here some time ago would be a winner for the hedge funds instead of the shortsighted spread trade involving the bullion markets and the mining shares. The hedgies were able to play that trade and profit from it for a while but they overstayed their time with it as investors began warming to the solid profits being generated by many of the mining companies. It also did not hurt the bullish cause to see some of the gold miners increasing their dividend payout.
For a look at the HUI in isolation, you can see that the index has filled the former gap region but failed to rally through the top of that gap and hold above that level. It should find some additional buying support back down at the bottom of this same gap near the 570 level if the dip buyers are going to still feel comfortable committing capital to the sector in the midst of this instability in Europe.
Silver whacked along with Copper as Risk trades are taken back off (AGAIN)
Rollercoaster is too tame of a word to describe the kind of insanity being created in our financial markets by the computer algorithms. Yesterday it was "everyone in; the water's fine". Today is, "Get the hell out; a great white is coming at you".
Tomorrow, it will probably be time for a nice yacht cruise again. Who knows and at this point, why even bother attempting to figure it out.
First the focus was all on Greece. Now it has shifted to Italy. Next it will probably be Spain and if we get to that, it will be the survival of the entire European Monetary Union that will be called into doubt. At some point, if things keep heading in the same direction, with one fire after another popping up, nationalistic tendencies will doom the Euro as nations begin opting out. Either way, history is being made.
The impact of this mess (at least for today) is that Copper and Silver were both spanked as traders are looking for a contagion effect that would slow overall global economic growth. Copper is currently down 3.5% with silver being 2.9% lower.
Gold is getting caught in a tug of war between the commodity index related selling due to risk trade reversals and its role as a safe haven. It is currently trading down but not by all that much considering the carnage occuring in the US equity markets. It is hovering between $1780 and $1790 as I write this.
Interestingly enough, gold IN EURO TERMS, is actually higher today which underscores the fact that the yellow metal is indeed serving as a safe haven. It is currently trading near 1320, a mere 50 euros or so off of its recent all time high.
Tomorrow, it will probably be time for a nice yacht cruise again. Who knows and at this point, why even bother attempting to figure it out.
First the focus was all on Greece. Now it has shifted to Italy. Next it will probably be Spain and if we get to that, it will be the survival of the entire European Monetary Union that will be called into doubt. At some point, if things keep heading in the same direction, with one fire after another popping up, nationalistic tendencies will doom the Euro as nations begin opting out. Either way, history is being made.
The impact of this mess (at least for today) is that Copper and Silver were both spanked as traders are looking for a contagion effect that would slow overall global economic growth. Copper is currently down 3.5% with silver being 2.9% lower.
Gold is getting caught in a tug of war between the commodity index related selling due to risk trade reversals and its role as a safe haven. It is currently trading down but not by all that much considering the carnage occuring in the US equity markets. It is hovering between $1780 and $1790 as I write this.
Interestingly enough, gold IN EURO TERMS, is actually higher today which underscores the fact that the yellow metal is indeed serving as a safe haven. It is currently trading near 1320, a mere 50 euros or so off of its recent all time high.
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