Tuesday, February 14, 2012

A few things

Gold- Daily Chart
Those that don't believe gold will ever come down are improperly evaluating the metal's downside risk. Gold is not exempt from a larger corrective decline, especially after an eleven year run. I do foresee Gold to head higher when I review the metal's long-term outlook, but the chart suggests for continued weakness in the short and intermediate term. Gold cannot be on the verge of a bubble phase with the U.S. Dollar in a strong bull market, nor does it seem logical to think the two would move in lockstep of one another. Furthermore, once the stock market is ready to enter its own multi-month decline, it will almost certainly spill over to all other asset classes in the marketplace.

Silver- Daily Chart
Silver appears to have been coiling for several trading sessions.  This coiling pattern is revealing in the form of  a narrow trading rage that often lead to large directional moves. The physcology behind this trading range is a result of indecision and growing frustration among investors who are anticipating news that is specific to a particular outcome. Given the overall bearish price structure, the odds are favorable to a downward move.

The U.S. Dollar- 4 Hour Chart
The Dollar appears to be forming a rounding bottom on the 4 hour chart. The period in time by which this pattern carves out will provide more validity in defining the area of support. In other words, the longer this pattern bases, the stronger that support area will hold. 

The S&P Mini- 4 Hour Chart
This is under the assumption that the pattern is half way under construction. The slow grinding type of sell-off that precede this particular pattern can take several trading sessions.

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