By: Adam Hamilton, Zeal Intelligence - 26 May, 2006
Propelled by the recent massive spikes in the metals as well as the persistently strong energy prices, the 2006 markets have been very much dominated by commodities. Contrarian investors and speculators have naturally gravitated towards these hot commodities markets to ride the early second stage of this global raw-materials boom. Full Story
By: Peter Zihlmann, Zihlmann Investment Management AG - 26 May, 2006
While the past is not always a reliable guide as to what the future may bring, it can give us a hunch of what may lie ahead. The chart below reveals one thing for sure: the USD-dollar has lost more than 30% against a basket of foreign currencies over twenty years, but not in an uninterrupted line of course. We also note that after a sharp fall that touched bottom first at the end of 1988, sharp rallies followed, up and down. Full Story
When opportunity knocks as loudly as it did yesterday, we should always check the peephole before opening the door. The opportunity I am alluding to is a stock market once again seemingly energetically on the rise. The Dow Industrials gained nearly a hundred points, and other broad indices rose along with it, making just about any stock that we might have been eager to short a day earlier an even juicier play now. Full Story
The cross over and close above the 40-day moving average is an indication the longer-term trend has turned positive. Daily stochastics declining into oversold territory suggest the selling may be drying up soon. The market's short-term trend is negative as the close remains below the 9-day moving average. It is a mildly bullish indicator that the market closed over the pivot swing number. The next downside target is 634.5. The next area of resistance is around 654.5 and 658.5, while 1st support hits today at 642.5 and below there at 634.5. Full Story
Gold quickly jumped above $640 in access trade late yesterday and traded near $645 in Asia before it traded in a range of about $639 to $647 in London and dropped back near $640 by the open in New York, but it then steadily climbed higher throughout trade in New York and ended near its highs with a 1.71% gain. Silver remained near unchanged in Asia and traded in a range of about $12.30 to $12.65 in London before it came into New York near the bottom of that range. It then climbed up over $12.75 in late morning New York trade before it fell off into the close and ended just 0.48% higher. Full Story
My gut is telling me that we should short the bejeezus out of every rally that comes our way these days. Stocks feel like they are being held aloft, but only barely, as the smart guys prepare to bolt for the exits. Take the Dow Industrials. They’ve traced out a teepee in the last month and are now struggling to avoid breaking beneath its floor. Ordinarily, the consolidation pattern this has created in the last few days would be prelude to a short squeeze, or at least to the construction of a right shoulder within a larger H&S pattern. However, to achieve proper symmetry in time, that would imply that the impending collapse is still at least a few weeks away. Full Story
The close under the 40-day moving average indicates the longer-term trend could be turning down. A negative indicator was given with the downside crossover of the 9 & 18 bar moving average. Momentum studies are still bearish but are now at oversold levels and will tend to support reversal action if it occurs. The market's short-term trend is negative as the close remains below the 9-day moving average. There could be some early pressure today given the market's negative setup with the close below the 2nd swing support. The next downside objective is 620.0. The next area of resistance is around 649.0 and 666.0, while 1st support hits today at 626.0 and below there at 620.0. Full Story
Gold initially fell to trade near $665 in Asia, but it then rose back near $670 in early London trade before falling to the low $660s by the open in New York. It then immediately fell to $650, consolidated, dropped to $640, consolidated, and then dropped even further at the close to end near its lows of the session with a 5.35% loss. Silver remained around $13 in Asian and early London trade, but it then fell near $12.50 by the New York open before it traded in a range of about $12.50 to 12.75 for most of trade in New York and closed near the bottom of that range with a loss of 5.08%. Full Story
Motivations for today's writings are two events, one large and one small. The first of those was the report on consumer prices for the month of April 2006 in the United States that was released on Wednesday, 17 May. Subsequent to that release, paper equities took a horrible slide. Gold and Silver followed those markets lower. These market reactions seemed to surprise almost all. Second, a letter to the editor in a popular business publication caught my attention. Full Story
The institutions will continue to invest in the silver ETF, causing silver to be bought and taken off the market. The sponsors of the ETF are either going to run out of silver at current prices, or they are going to sell out the entire 130 million ounces relatively quickly. If they run out of silver at current prices, the price must go up to bring out the required silver. If they sell out the entire 130 million ounces, that will prove there is great demand for silver and the next step must include plans for another silver ETF. We have multiple gold ETFs, so there may more silver ETFs. Full Story
This new ETF fills the void for precious metal stocks investors and traders. Well diversified and more accessible than a fund, it is excellent for short term trading as well as investing. It has a higher beta than the $XAU but lower than $HUI. The timing of the debut is unfortunate, and volume clearly is lacking at this point. There are tradable options but volume is non existent so far. GDX is now on our roster of funds and ETFs, watch and wait for the next signal. Full Story
About a week ago gold was in the $715 range and then last week ka-boom! It feels like several months ago doesn’t it? Well, after that mark of $715 was hit, we received our long awaited correction closing at a low of around $654 last Friday. That was about a 9% drop and was the largest single day drop since March of 1983. I’ve been sitting back waiting for the dust to settle. This morning, Monday May 22, 2006, we hit a low of $636 US and have now bounced off that figure and are up $20 to about $656. Full Story
By: Roland Watson, New Era Investor - 24 May, 2006
Back in January, we had a go at estimating where the leading index of gold stocks, the HUI, may eventually end up in this first major gold bull of the 21st century. The article can be found here, where the estimate was made for an ultimate high around 1175 in 2012. Based on a typical HUI leverage of 4, this implied that gold might well top out at $2100, though we would not hold to a gold price purely based on one conjecture. The HUI was at 310 when that article was penned, whereupon it charged with nostrils bellowing to just over 400 before correcting back to the price when we penned the aforementioned article. Full Story
We are fast entering the other side to statistical distortion, as an unusual combination has revealed itself. If it were not so destructive, it would be hilarious. The pendulum has begun to swing on the housing sector component to the Corrupted Price Index (CPI). For a few years housing rents had been tame (if not dropping), as the housing boom inflated in full force. Buy the property, bid its price up, while the rental properties go begging with minimal attention. Now rising rents are the new phenomenon, as the housing boom deflates. Full Story
Declining momentum studies in the neutral zone will tend to reinforce lower price action. The market's close below the 9-day moving average is an indication the short-term trend remains negative. The gap up on the day session chart gave a bullish indicator and more follow through could be seen this session. There could be more upside follow through since the market closed above the 2nd swing resistance. The next downside objective is now at 654.5. The next area of resistance is around 681.4 and 685.4, while 1st support hits today at 666.0 and below there at 654.5. Full Story
Gold initially rose over $660 in Asia before it fell back under $655 in later Asian trade, but it then rose back up to trade at around $660 in London. Gold then rose to $670 in morning New York trade and extended its gain in afternoon trade to end near its highs with a 2.48% gain. Silver seesawed in Asia and rose near $12.75 in London before it rose above $13 in New York and ended near its highs with a 5.78% gain. Full Story
By: Steven Saville, Speculative Investor - 23 May, 2006
We think the gold bull market that began during 1999-2001 is widely misunderstood, even by some of the most avid gold analysts. For example, the annual deficit between mine supply and fabrication demand is regularly cited as a major driver of the gold bull market even though the total aboveground supply of gold is more than 200-times greater than this so-called deficit. Full Story
What are the best combination of trend indicators for juncture recognition in the gold/silver stock sector? Are there any actively traded representatives of the precious metals stocks that can be used as leading indicators for the identification of shifts in trends? If so, what are they? In this article we’ll try to answer these questions using examples from the recent past. Full Story
Every year, around the beginning of May, we take a trip over to a local coffee shop to see what the average Joe thinks about the markets. The most efficient way to do this is to administer a poll to this crowd of mostly working class professionals in their 20s, 30s and 40s. While not the most scientific of polls, the data below is quite informative. Full Story
The 636.00 correction target for June Gold touted here over the weekend came within less than a dollar of catching the exact low of Monday’s $40 swing. Even so, I have my doubts that the selling is over. Notice in the chart below that the entire day’s more or less steady recovery did not create an impulse leg even on the 5-minute chart. That would have required at an absolute minimum a rally above the two labeled peaks; in the event, only one of them was breached. Full Story
Declining momentum studies in the neutral zone will tend to reinforce lower price action. The market's short-term trend is negative as the close remains below the 9-day moving average. The daily closing price reversal up on the daily chart is somewhat positive. The market tilt is slightly negative with the close under the pivot. The next downside target is now at 639.8. The next area of resistance is around 664.9 and 668.7, while 1st support hits today at 650.5 and below there at 639.8. Full Story
Gold fell to under $640 in Asia, but it then rebounded throughout trade in London and New York and ended near its highs with a slight gain. It recovered over $20 from its lows in Asia. Silver fell to under $12 in Asia, but it also rebounded throughout trade in London and New York and ended near its highs with a slight gain. It ended over 50 cents higher from its lows. Full Story
Do you believe in conspiracy theories? Sometimes they are difficult to refute. Such was the case last week, just after the Euro had soared towards a 12-month high of $1.30, and the British pound, itself ridden with large trade and budget deficits, stood mighty tall at $1.90, with traders setting their sights for $2 for the pound. The US dollar lost 7% in just six weeks against America's main trading partners, and was 28% lower since January 2002, to stand just 1% above its 1995 low. Full Story
The action on Friday was characteristic of a reversal and it was sector wide with Reversal Days showing up in the charts of the gold stock indices and many gold and silver stocks. The action in the metals themselves was less convincing, with silver looking like it had bottomed, at least for now, but gold itself looks rather ambiguous. Full Story
By: Joe Ferrazzano, Trade The Cycles - 22 May, 2006
Elliot Wave (see 15 month charts) and the 5% follow through major intermediate term cycle sell signal suggest that the major upcycle since 5-16-05 for HUI/NEM/XAU has ended, and, Elliot Wave suggests that the long term upcycle since 5-10-04 and the Cyclical Bull Market since late 2000 for HUI/NEM/XAU have ended (see second chart). Full Story
There’s a lot of anxiety out there. I’ve received many E-mails from subscribers who are quoting cyber-net guru’s as predicting silver might come down to 8.50, others who are suggesting that gold will find support at 525.00. Still others are predicting that a countertrend bounce in the US dollar will hurt gold. I even saw one article recently, written by a widely followed chartist who suggested that it is ‘time to go fishing’. I HAVE SOME GOOD NEWS! Good news for ‘gold bugs’ that is! The current shakeout in gold and silver prices is just about over! The next rally is just around the corner! Full Story
Stochastics trending lower at midrange will tend to reinforce a move lower especially if support levels are taken out. The close below the 18-day moving average is an indication the intermediate-term trend has turned down. More selling pressure is likely given yesterday's gap lower price action on the day session chart. The market is in a bearish position with the close below the 2nd swing support number. The next downside target is now at 634.0. The next area of resistance is around 671.0 and 688.0, while 1st support hits today at 644.0 and below there at 634.0. Full Story
Gold rose up near $690 in Asia before it fell off in London to come into New York near unchanged. It then quickly dropped $20 to $660, briefly bounced to $665, and then fell near $650 before it rebounded into the close, but it still ended with a 3.47% loss on the day. Silver rose to around $12.75 in Asia before it also fell off in London and came into New York near unchanged. It then dropped to about $12.10 and traded in a range of about $12.10 to $12.45 before it closed near the top of that range to end with a loss of just 1.04%. Full Story
By: Julian D. W. Phillips, Gold Forecaster - 21 May, 2006
We described how if the U.S.$ declined substantially, it could lead to Capital Controls to protect against foreign governments’ withdrawal of their investments in the U.S.A. Of course this would be in a global climate of severe trade disruption with many nations instituting trade protection measures as well as being prepared for Capital Controls to protect their nation’s capital base. The U.S. would be particularly likely to impose Capital Controls because of the huge volumes of externally owned U.S. currency. Full Story
In case you’ve missed it, gold and its shares dropped like stone this week. What’s going on you might wonder, when will this bleeding stop? Should we bail out en masse? Or should we just sit tight and wait for the storm to calm down a bit.. Full Story
Gold took a savage pounding on Friday, and although prices finished off their lows, more selling appeared likely next week. By my runes, the June Comex contract “should have” found support at 663.50, a well defined hidden pivot. Instead, the first time the futures encountered that number, on Friday morning, they smashed through it immediately. All subsequent rally attempts failed to push more than a point or so above the pivot, suggesting it had become resistance from the moment it was violated. Full Story
The good news is: there’s a light at the end of the tunnel. While we can still see another 10% or so down from here (especially in copper- if not more), I do think by stepping aside last Thursday, the majority of the correction I foresaw is now behind us – especially in the mining and exploration shares. We can still move sideways to down through June, but I now think real further weakness is strictly a buying opportunity (except in copper- where I see another 20% down). Full Story
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