gold – Page 2 – Andrew Thrasher

The Line in the Sand for Gold

Posted on August 5, 2013 by Andrew Thrasher, CMT

While the gold ($GC_F) futures are off this morning we did see some strength in the gold market on Friday – breaking back above $1300/oz. Last week I spoke with Barbara Kollmeyer at MarketWatch about where I think the line in the sand is for gold based on technicals.

Andrew Thrasher, investment analyst at Financial Enhancement Group, says gold needs to regain and hold through its 50-day moving average — continued resistance since November 2012 and break-through resistance at $1,350 — if it’s going to break out higher. He also notes the gold Relative Strength Index, a momentum indicator, is stuck in a bearish range of 20 to 60 as “buyers appear unable to fully retake the reigns to have gold continue higher.”

Gold bulls still have a lot of work to do to push prices back into an uptrend, I’ll continue to be keeping an eye on $1350/oz. as the level of resistance we need to break above to get any kind of confidence in further appreciation.

Click over to see the chart and further analysis from some other traders.

Source: Gold: Where to draw the line int he sand after jobs data (MarketWatch)

Disclaimer: Do not construe anything written in this post or this blog in its entirety as a recommendation, research, or an offer to buy or sell any securities. Everything in this post is meant for educational and entertainment purposes only. I or my affiliates may hold positions in securities mentioned in the blog. Please see my Disclosure page for full disclaimer. Connect with Andrew on Google+, Twitter, and StockTwits.

Has Gold Recovered?

Posted on July 24, 2013 by Andrew Thrasher, CMT

It’s nice to see gold catching some bids lately. One of the first half of 2013 theme’s seems to have been “kick the crap out of gold bulls” as it continued the downtrend started in 2011. Don’t get me wrong, it’s still in a downtrend, but the recent price action has created an interesting setup.

Since the SPDR Gold Trust ETF ($GLD)’s last attempt to rally in late-2012 the 50-day moving average (green line) has acted as a solid form of resistance. With yesterday’s move, bulls were able to get a close above the moving average and are likely now praying that it flips from resistance to support.

In April and May of this year $GLD appeared to have been trying to put in some support at $130, but eventually lost out as bears forced it to gap down taking the commodity ETF $15 lower. Well we are now back at that support level but testing it from its underbelly. Pre-market it seems we will still be below $130, I’ll be watching to see if traders can collectively fight back above and hold this level.

Turning the attention to two indicators for gold, the Relative Strength Index (RSI) and On Balance Volume. RSI had been stuck in a bearish range for the last nine months. However, with this recent bout of upward movement we can see momentum has broken back above 55. Ideally we would like to see buyers keep the RSI above 50 to insure confidence in the current upswing. The On Balance Volume indicator simply adds volume of up days and subtracts volume on down days, giving us an idea of buying and selling pressure within the ETF. The downtrend in volume is still present but could be tested within the next week or so if we see some more high volume advances.

Overall, gold appears to be looking like it’s healing some of the gaping wounds that have been created over the last couple of years. Don’t get too excited, there is still much that has to improve for $GLD to regain its uptrend, but these are good short-term signs that gold bulls need to hang on to in order for us to see further price appreciation.

Will Gold Find Support at $1,100?

Posted on July 1, 2013 by Andrew Thrasher, CMT

Gold ($GLD) has been in a waterfall-like decline for 2013, off nearly 23% YTD. The team at Ned Davis Research believe that the price of the shiny metal may be approaching a level of support. John LaForge and Warren Pies of NDR are looking at both a long-term trend line as well as extremely negative sentiment in their recent analysis of gold.

From Barron’s:

Here’s NDR’s chart of exchange-traded fund outflows plus the notional value of large speculators’ net positioning in gold futures.The combined selling pressure of these two sources has averaged $6.5 billion a month for six months, they write, which is the largest since the launch of those traders’ favorite vehicle, SPDR Gold Trust (GLD), and smalltime investors’ preferred ETF, iShares Gold Trust (IAU), about eight years ago.

This is the chart LaForge and Pies are referring to. You can see the huge outflow from gold futures and gold ETFs – which dwarfs all previous outflows over the last seven years.

Again, Barron’s:

From a technical perspective, bulls have “one last major line in the sand left, the long-term trendline, which sits in the low $1,100s,” writes the Ned Davis duo:

Action in gold is getting uglier by the day, thanks to speculators. Next stop is likely in the low-to-mid $1100s. Fundamental buyers, such as China, continue to buy the dips. If you do not believe that the financial repression theme is at its end, gold could be a good buy in the $1100s. The commodity secular move is not officially dead, but ugly swings in gold and Chinese equities have us worried that the end is near. Copper, surprisingly, is holding firm.

Taking a long-term view of gold we can see the $1,100 support that NDR is talking about off the 2001 low. Will we see $1,100? At the current pace of decline in gold prices, it’s not hard to imagine. I’ll be watching this trend line and see if support is able to hold as gold futures and ETFs continue to bleed.

Source: Gold’s Next Stop Is $1,100: Ned Davis Research (Barron’s)

The Levels to Watch In Gold

Posted on February 8, 2013 by Andrew Thrasher, CMT

Gold can be a fun commodity to keep an eye on, as it can have some pretty volatile moves intraday. The price action we have been seeing in gold recently is a great example of why it’s important to be patient.

I’ve looked at gold a few times over the last year, for example in July when it was breaking out of a pennant pattern to the upside, back in September when the shiny metal looked like it might be topping out, and most recently in early January when it appeared that gold was reaching an oversold level near the $1640 area. But today what I’m seeing is the commodity is stuck between tight levels of resistance and support.

Gold looks like it’s in a quagmire, traders don’t seem to have enough conviction to have any type of substantial move. On the upside we have the 50-day moving average (green line) which we saw a false breakout above back in November before continuing the down trend and again in mid-January but buyers were batted down back near the lows. The 38.2% Fibonacci retracement level sits at $1676, which acted as a nice level of support back in early November but now is giving bulls some grieve.

On the downside we have the simple 200-day moving average (blue line). In January it doesn’t seem the 200-MA held very much significance as traders batted the price of gold around the moving average, however over the last week it appears to be the critical level for buyers to step in and hold. When we turn our attention to momentum we don’t seem to find much bias. The Relative Strength Index has found a home near 50 and neither bulls nor bears are able to push it in either direction.

Going forward patience will be a virtue. Unless your day trading the intraday moves of $gold or $GLD then it may make more sense to sit on your hands and wait and see how this battle of support and resistance plays out.

An Interesting Setup In Gold

Posted on January 7, 2013 by Andrew Thrasher, CMT

Gold has created an interesting setup recently with one momentum indicator and one time/price indicator calling for a possible bottom in the shiny commodity’s price. This is the topic of my weekly article for TraderPlanet.com.

Here’s a blurb:

Gold has been rising steadily since 2001, but has been in a solid uptrend since 2009. During the last four years there has been just a hand few of dips for gold bulls to jump onto. When using technical analysis we have three resources at our disposal, time, volume and price and we are going to look at two of those in the chart below of gold.

Click over to read the rest: Anatomy of the Gold Chart: Dip Offers Buy Spot (TraderPlanet)