December fut's will likely close up higher than expected, but you have to be realistic here, april's selloff looks far healthier, and more bullish than the dec fut's. Should pull it higher, regardless, would be my take, but a few weeks of chop wouldn't surprise me here. It never would, thats always my prediction with oscillator divergence on two time frames , BUT if dec takes off up, straight from a spike low, then i would have misjudged it, thats for sure.
If there is no follow through selling today and tomorrow and yesterday's low hold, then that may have been it for the correction. If gold can move back over and close 810 and silver over 15, then I would venture out and reestablish long positions for the next push higher. So far Dollar Yen is back above 110 and the BOJ did their usual push last night to prevent a sustained move to under 109. The Yen seems to be protected at the 110 area going back to 2005...
Standing aside again as gold has now broke down below Monday's 790 low. Gold could make a trip down to at least 770 now from a technical perspective but possibly even further down. If Crude has put in a major top at 98 and the DX a major bottom at 75, then it would be best for traders to stand aside for a while as it is too early to tell imo. When rappers and supermodels start coming out to deny US dollars, then from contrary perspective, this may be a cyclical low for the DX. I'll be flat for while now. There is also some speculation that the BOE and ECB will embark on a rate cutting campaign very soon as the credit market continues to degrade. If this ends up being the case, then the Fed will no longer be the only CB cutting overnight rates and should put a bid under the DX as a result..
Clarification, i meant dec fut's contract would close higher than expected, ie, at expiry, not next day or anything. Also, i misjudged it, for sure
Nothing has really changed since yesterday. Still sitting on the fence as the possibility for further declines in the metals complex looks possible. Even with Crude back above 95, gold/silver is still showing some relative weakness now. We may have seen the highs put in for gold this year. Unless gold can regain the 800 handle and silver 15, I would be very cautious with establishing new positions. Global equities markets still appear to be weak due to some moderate Yen strength and higher overnight rates via the LIBOR. US short rates have also ticked down most of the week as well so traders/funds are being real cautious right now and are raising cash...
It appears that the rally in the DX is complete and the downside has resumed once again. As of today, Crude and the Euro are breaking out to new all-time highs against the Dollar. However, gold is still $50 below its record high and silver is also well below where it should be. It goes to show just how manipulated the precious metals market is as Crude Oil approaches its inflation adjusted price of $110/bbl. Gold should be valued well north of $2400/oz. but this is obviously not the case. Gold should ideally break back over $815 on a closing basis in order to resume the uptrend in a meaningful manner. Personally, I am still 100% cash as I believe that some downside risks still remain in the metals complex since Dollar/Yen is back under the 110 zone...
rollover week in the metals ... expect some volatility as the specs etc move their positions to FEB 2008
GLD added 18 Tons yesterday and the fund is now carrying over 600 tons total. There is no let up in the amount of gold being purchased by investment funds who are obviously anticipating much higher gold prices. One of the major buyers in the GLD is BlackStone. All of the damage to gold appears to be a short-term deal and I continue to add into these pullbacks. Something big seems to be coming on the horizon and I don't want to be left standing on the side watching the train zip on by...