The Overall Technicals
Comex Gold (GC)
Gold’s sharp fall Friday suggests that corrective rebound from 1672.5 possibly finished at 1755, on Bearish divergence condition in 4 hrs MACD.
Initial focus in at 1704.5, the minor support this week. A break there will turn near term outlook Bearish. If that happens, the decline from 1798.1 should be resuming for 61.8% Fibo retracement of 1526.7 to 1798.1 at 1630.4.
The Big Picture: the price actions from 1923.7 high are seen as a medium term consolidation pattern. There is no indication that the consolidation is finished, and more range trading could be seen. In any case, downside of any falling leg should be contained by the support zone at 1478.3/1577.4, and rebound. A clear break of the resistance zone at 1792.7/1804.4 augurs that the long term up trend is possibly resuming for a new high above 1923.7 and beyond.
The Long Term Picture: with support at 1478.3 intact, there is no change in the long term Bullish outlook in Gold. While some more medium term consolidation cannot be ruled out, I see an eventual break of 2000, the psych mark in the long run. Stay tuned…
Comex Silver (SI)
The current action suggests that Silver has formed a short term Top at 34.42 on Bearish divergence condition in 4 hrs MACD. The initial bias is back to the minor support at 32.90 this week. A break there augurs that rebound from 30.65 is complete and will turn outlook Bearish for a retest of this support level. A move above 34.42 will bring on another rise, and I expect further loss of momentum ahead of 35.445 resistance and then a reverse.
The Big Picture: as long as 37.58, the Key resistance holds, price actions from 26.105 are seen as a consolidation pattern, that means, the down trend from 49.82 high is not over yet and an new low below 26.105 is favored. But, a break of 37.58 will dampen this Bearish case and could bring stronger rise back to 49.82 high.
The Long Term Picture: the Big Q remains; Is 49.82 is a medium term or long term top? With 61.8% Fibo retracement of 8.4 to 49.82 at 24.22 intact, price actions from 49.82 could eventually turn out to be consolidation. And a break of resistance at 37.58, will increase the odds of a new high above 49.82. Stay tuned…
Nymex Crude Oil (CL)
Crude Oil stayed in its range of 84.05/89.90 last week. The corrective nature of the price action from 84.05 augurs that it is a consolidation pattern, and the fall from 100.42 is not finished. But, while stronger recovery could be seen as the consolidation continues, I expect the Northside to be limited by 50% Fibo retracement of 100.42 to 84.05 at 92.24.
On the downside: a break of 84.05 will target support at 77.28.
The Big Picture: the current development suggests that price actions from 114.83 are a triangle consolidation pattern. Fall from 100.42 is likely the 5th and final leg of the consolidation. That said, the Southside should be contained above 77.28 and bring on a upside breakout eventually. A break of the resistance at 110.55 augurs that rebound from 33.29 has resumed for a move above 114.83.
The Long Term Picture: Crude Oil is in a long term consolidation pattern from 147.27, with 1st wave completed at 33.2. The corrective structure of the rise from 33.2 indicates that it is the 2nd wave of the consolidation pattern. While it could make another high above 114.83, I look for strong resistance ahead of 147.24 to bring reversal for the 3rd leg of the consolidation pattern. Stay tuned…
Nymex Nat Gas (NG)
The case for near term reversal is starting to build up in Nat Gas. A break of the support at 3.47 is needed to confirm topping 1st. Barring that, another rally is in favor to the Psych mark at 4.00. A clear break of 3.47 will turn the focus to 3.355. A break there should confirm a near term reversal and bring on a pull back to the support zone at 2.575/3.277.
The Big Picture: recent developments sense that medium term decline from 6.108 finished at 1.902. It is a bit early to confirm this, but Bullish convergence condition in weekly MACD suggests that the down trend from 13.694 the Y 2008 high may be over too. Sustained break of the channel resistance, now at around 3.88 sets up for a test of the Key resistance at 4.983 next. A clear break of the resistance turned support at 3.277 augurs that the rebound from 1.902 is over and the medium larger down trend is still in progress for a new low.
The Long Term Picture: a clear break of the resistance at 3.255 was an important signal of long term bottoming reversal and should at least give Nat Gas push to 4.983/6.108, the resistance zone. Stay tuned…
Paul A. Ebeling, Jnr.
Paul A. Ebeling, Jnr. writes and publishes The Red Roadmaster’s Technical Report on the US Major Market Indices, a weekly, highly-regarded financial market letter, read by opinion makers, business leaders and organizations around the world.
Paul A. Ebeling, Jnr has studied the global financial and stock markets since 1984, following a successful business career that included investment banking, and market and business analysis. He is a specialist in equities/commodities, and an accomplished chart reader who advises technicians with regard to Major Indices Resistance/Support Levels.
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