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fib_1618

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Reply with quote  #1 
The 72 precious metals (stocks) Bullish Percent Index generated a solid buy signal last week, and along with the constructive behavior of the PM and XAU A/D lines of the last two weeks, it would appear that we're finally seeing the liquidity river starting to rise. This should bring better stability, and lower volatility, to the equity markets in the next couple of months.

For now, one may now want to look at this sector for constructive price pattern structures to initiate long positions on any pullback, and if this excess of current monetary policy continues to increase, commodities should then be the next area of suggestive increase in their values, with interest rates beginning to rise later on to try to offset this same stimulative effect.

I would also like to publicly thank Darris who continues to share this exclusive data with the members of Technical Watch for mutual benefit.

Fib




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"As for it being different this time, it is different every time. The question is in what way, and to what extent" - Tom McClellan

"An economist is someone who sees something happen, and then wonders if it would work in theory" - Ronald Reagan

"What we see depends mainly on what we look for" - John Lubbock

"The eye sees only what the mind is ready to comprehend" - Henri Bergson

“Answers are easy; it’s asking the right questions which is hard” - Dr. Who - 1977

"You know the very powerful and the very stupid have one thing in common - they don't alter their views to fit the facts, they alter the facts to fit their views (which can be uncomfortable if you happen to be one of the facts that needs altering)" - Dr. Who - 1977

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relax

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Reply with quote  #2 
it took several months for price to form a top after BPI peaked

would you not expect price to do same in connection with this bottom

or is the trendline break a very strong signal

i think the move off the lows for oil looks corrective

what's your take on oil
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fib_1618

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Reply with quote  #3 
Quote:
it took several months for price to form a top after BPI peaked

Yes, but we're dealing with an emotionally charged sector where the commodity can be "stimulated" based more on monetary and geopolitical considerations than basic technical conditions. It should also be duly noted that with the last highs in gold, the stocks were actually weaker in strength (the lack of an "overbought" reading) which complimented the Elliott count of a 5th wave in progress.

Quote:
would you not expect price to do same in connection with this bottom

Because of the human emotion of fear, BPI buy signals present better trading opportunities because they tend to have the back drop of traders giving up on their preferred outlooks - also known as a "wash out".

Quote:
or is the trend line break a very strong signal

It's rare when you have both a BPI signal accompanied by a trend line break...this is why I reference of it being "solid". Another way to describe this kind of action would be "reliable" as you have two different technical aspects of this data complimenting this same signal.

Quote:
what's your take on oil

The price of gold is the mechanism that drives the eventual direction for the rest of the asset classes. In the case of crude oil, there is a lag of about 3 to 4 months before the price movements of gold show up in the price of not only crude, but other commodities as well. Using this consideration as a guideline, and assuming that the price of gold continues to move higher from here, we should see this "echo effect" hit this market sometime in March or April of next year. However, the current outlook for crude would be for a quick and sharp advance from "oversold" levels which would echo gold's September advance, and then one more move lower sometime in the February/March period to complete the structure.

Fib





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"As for it being different this time, it is different every time. The question is in what way, and to what extent" - Tom McClellan

"An economist is someone who sees something happen, and then wonders if it would work in theory" - Ronald Reagan

"What we see depends mainly on what we look for" - John Lubbock

"The eye sees only what the mind is ready to comprehend" - Henri Bergson

“Answers are easy; it’s asking the right questions which is hard” - Dr. Who - 1977

"You know the very powerful and the very stupid have one thing in common - they don't alter their views to fit the facts, they alter the facts to fit their views (which can be uncomfortable if you happen to be one of the facts that needs altering)" - Dr. Who - 1977

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Whipsaw101

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Reply with quote  #4 

My Interpretation is a little different fwiw

I am looking at the current Gold Action as being Corrective an ABC with a $850-$860 target

I also look at the BPI more like an oscillator in a downtrending market where abt 52% is overbought

I track Hulberts HGNSI (Gold Newsletter Sentiment) 12/15 reading was 60.9% Bullish (bull/bear extremes 89%/-31%) we never did seem to get that washout low and looks like investors are getting excited abt prospects.
Premium on Central Fund also getting up there (15.7%)

The weekly RSI on GLD never got oversold....and the count is either 5 waves down or 5th of wave 3 to come.........

Weekly Channel on GLD top line comes in at $850 or so

An accelerated move above 850/860 would mean higher targets,  I will be surprised if that happens

Cheers

Chris W.


PS Also Thanks to Darris!




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mss

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Reply with quote  #5 
Got question.

Exclude Gold and Silver from your answer.

If the economy is so bad and going to get worse, why are some commodity stocks rising.

With plants closing, the demand for steel, coal, copper, oil, NG,  etc should be declining.

Winter use of coal and NG for heat is only a small percentage of output, compared to total manufacturing requirement.

mss


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