Monthly World Gold Index

Both the yearly and quarterly charts of the world gold index are bullish with possible TD Sell Signals at least a year away. The quarterly chart also points to the 1318-1347 area as a target to watch on the way up. What’s the monthly chart have to say?

As with the higher time frames on gold, this chart, as it stands, is bullish. The last TD Sequential signal was a sell in 2008. After a pullback that bottomed in the autumn of that year price has moved steadily higher. We are now working on a new TD Setup but need at least until March 2010 to get to bar #9. Of some interest is the price cluster just above the market from 1238-1255. The Fib ratio shown is based on the 2008 pullback.

Bottom Line: No reason here not to be bullish on the gold. Over the weekend I will take a look at this market’s weekly chart.

Technical Analysis of Chart positions for longer-term positions:

Dollar Index: Out. (0.65 point loss after 1 trade). If able to punch through 76.8-77.05 this will signal continued bullishness.
World Gold Index: Out since 1161.80 on the close of 12/4. Watching 1101.20 to see if support develops.
Cash SP500: Out on a close below 1083.74.

Waiting for initial signals on the following charts: 10 yr Bond Yield and the CRB Index

Gold Quarterly

The yearly chart of the world gold index is bullish with a possible TD Sell Setup scheduled for the end of 2010. How does the quarterly chart fit into this scenario?

The rally is to the point where we are well along in TD Sequential countdown. This quarter’s price bar will be bar #9. Since it takes 13 bars to complete, the earliest we can see a sequential sell is in four quarters from now - and this matches what the yearly chart is telling us. In the third quarter of 2009 the market broke out above the TD Supply line and confirmed that break this quarter. The calculated price projection is 1318.21. This is higher than the targets mentioned yesterday and is closer to a TD Trend Factor target of 1346.98. 1321 is square the low of 1999 and so 1318-1347 is a target area to watch on the way up.

Bottom line: Both the yearly and quarterly charts are bullish. Tomorrow I will take a look at this market’s monthly chart.

Technical Analysis of Chart positions for longer-term positions:

Dollar Index: Out. (0.65 point loss after 1 trade). If able to punch through 76.8-77.05 this will signal continued bullishness.
World Gold Index: Out since 1161.80 on the close of 12/4. Watching 1101.20 to see if support develops.
Cash SP500: Out on a close below 1083.74.

Waiting for initial signals on the following charts: 10 yr Bond Yield and the CRB Index.

Gold Yearly

Today starts a new approach here at Fox Market View. We will move away from focusing on the cash S&P500 and begin to view other markets and other time frames. The plan is to rotate through each in sequence (including the S&P) but I will be flexible. I‘ve decided to start with the world gold index.

Today‘s chart is on a yearly time scale. As everyone knows we have been in a powerful rally for years and this chart remains bullish. However, be aware that 2010 will most likely see TD Setup bar #9 printed. If this is the case, and since setup has already been perfected, the yearly chart will signal that at least a correction may be due on this time frame. But that is in the future. This chart, as it stands, is bullish. The targets shown are derived from TD Trend Factor (purple) and Gann (grey). Tomorrow I will take a look at this market’s quarterly chart.

Technical Analysis of Chart positions for longer-term positions:

Dollar Index: Out. (0.65 point loss after 1 trade). Darn! Looks like I closed this long too early! If able to punch through 76.8-77.05 this will signal continued bullishness.
World Gold Index: Out since the 1161.80 close on 12/4. Watching 1101.20 to see if support develops.
Cash SP500. Out on a close below 1083.74.

Waiting for initial signals on the following charts: 10 yr Bond Yield and the CRB Index

A Late Posting

Just when intraday volatility seemed to be rising along comes a quiet “inside” day on the cash S&P500. Once again this price action has done little to change the price pulse picture presented Friday. The bulls need to hold 1083.74 since a break of that level could start a cascade down.

Note the horizontal dashed cyan line at 1113.86. This is where the sequential stop-loss would be if the setup had not been recycled. I find it interesting that we are struggling to close above it and have not been able to do so for a full month since sequential bar 13 of November 9. I will continue to watch to see whether this line gets broken before 1083.74.

Note: This blog will slowly be changing its format over the coming months. Since I am focused on longer-term positions it seems to make more sense to look at the different markets and time frames than solely the cash S&P500. Watch for more of this same kind of technical work on the dollar index, world gold index, CRB and 10 year bond yield.

Technical Analysis of Chart positions for longer-term positions:
Dollar Index: Out. (0.65 point loss after 1 trade). Darn! Looks like I closed this long too early!
World Gold Index: Out since the 1161.80 close on 12/4.

Waiting for initial signals on the following charts: 10 yr Bond Yield,
Cash SP500 and the CRB Index

1083.74

Intraday volatility has certainly increased as evidenced by rare back-to-back “outside” days in the cash S&P500. This price action has done little to change the price pulse picture presented Friday. The bulls need 1083.74 to hold since my read of the pulses is that a break of that level could start a cascade down. Note that the medium moving average (dark blue) resides near this level.

Bottom Line: For those Longer-term traders/investors who are not already long I think risk is too high here to be long and so would sit tight. Anyone who is long should protect at 1083.74.

Technical Analysis of Chart positions for longer-term positions:
Dollar Index: Out. (0.65 point loss after 1 trade). Darn! Looks like I closed this long too early!
World Gold Index: Out since the 1161.80 close on 12/4.

Waiting for initial signals on the following charts: 10 yr Bond Yield,
Cash SP500 and the CRB Index

Weekly Chart Review, December 6, 2009

Earlier this week a review of the monthly chart indicated that any move above the November high would signal a continued advance to at least the next TD Trend Factor target of 1145.47 if not the higher long and medium moving averages (1168 and 1195). Even though the price action has been sideways and volatile this past week we did move above the November high; which also confirmed the break of the old weekly TD Trend Factor target of 1079.39. The new weekly chart target is 1139.40.

With a closing price of 1106 on Friday, these targets are 39-90 points away. If reached they would represent a 3.5% to 8% gain from current levels. However; the longer term risk is high and so my position has been that if now long the “get out” point would be on a move below 1083.74. For those Longer-term traders/investors who are currently out of the equities I think longer-term risk is too high here to chase what could be the last part of the rally. This includes me personally and I continue to sit tight, having gotten out in early October.

Why do I think risk is high? Although we made an up trending (higher high and higher low) price bar on the weekly chart it doesn‘t inspire bullish confidence. Yes, It was an Engulfing Bullish Pattern candlestick; but, when this occurs in an uptrend (like we have now), it may be a ’last engulfing top’. This would be the indicated case if we were to close lower next week. This makes sense since a down close next week would lead to more bearish divergence between price and the RSI. 1083.74 continues to be a very important level for the bulls to hold.

That being said I must admit that against this bearishness we keep making higher highs and that the DeMark indicators have not signaled exhaustion of the up trend. The end result of this tension has been a sideways movement over the past few weeks.