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Replies to post #40564 on GOLDBUGS AMEX Goldbugs Index (GOLD)
03/28/21 1:10 PM
The NY Gold Nearest Futures closing today at 173230 is immediately trading down about 8.59% for the year from last year's settlement of 189510. Presently, this market has been declining for 2 months. This price action here in March is warning that we may have at least a temporary high in place beginning perhaps a bearish reactionary move on the monthly level if we see lower prices next month or close lower. Otherwise, there remains the potential for a one-month Knee-Jerk reaction low. As we stand right now, this market has made a new low breaking under the previous month's low dropping to 167330 intraday yet it remains trading back above that previous low of 172880 implying near-term strength.
Up to now, we still have only a 1 month reaction decline from the high established during January. We must exceed the 3 month mark in order to imply a trend is developing.
ECONOMIC CONFIDENCE MODEL CORRELATION
Here in NY Gold Nearest Futures, we do find that this particular market has correlated with our Economic Confidence Model in the past. The Last turning point on the ECM cycle low to line up with this market was 2015. The Last turning point on the ECM cycle high to line up with this market was 2020 and 2011 and 1996.
MARKET OVERVIEW
NEAR-TERM OUTLOOK
The historical perspective in the NY Gold Nearest Futures included a rally from 2015 moving into a major high for 2020, the market has pulled back for the current year. The last Yearly Reversal to be elected was a Bullish at the close of 2020. However, the market has been unable to exceed that level intraday since then. This overall rally has been 5 years in the making.
This market remains in a positive position on the weekly to yearly levels of our indicating models.
The perspective using the indicating ranges on the Daily level in the NY Gold Nearest Futures, this market remains neutral with resistance standing at 174200 and support forming below at 172710. The market is trading closer to the support level at this time.
On the weekly level, the last important low was established the week of March 8th at 167330, which was down 9 weeks from the high made back during the week of January 4th. This was a key week for at least a temporary low. We have been generally trading down to sideways for the past week, which has been a very dramatic move of 2.018% in a stark panic type decline.
Looking at this from a broader perspective, this last rally into the week of March 15th reaching 175420 failed to exceed the previous high of 196250 made back during the week of January 4th. That rally amounted to only one week. Right now, the market is neutral on our weekly Momentum Models warning we have overhead resistance forming and support in the general vacinity of 168300. Resistance is to be found starting at 175900.
INTERMEDIATE-TERM OUTLOOK
YEARLY MOMENTUM MODEL INDICATOR
Our Momentum Models are rising at this time with the previous low made 2018 while the last high formed on 2020. However, this market has rallied in price with the last cyclical high formed on 2020 warning that this market remains strong at this time on a correlation perspective as it has moved higher with the Momentum Model.
Some caution is necessary since the last high 196250 was important given we did obtain two sell signals from that event established during January. That high was still lower than the previous high established at 207800 back during August 2020. Of course, that was the major high in this market, which means we have a downtrend for the past 6 months. Nevertheless, we have not elected any Monthly sell signal to date from the turning point of 08/01 on this monthly time level from that major high so there is still important underlying support which needs to be broken to change the trend on this time horizon. Critical support still underlies this market at 144610 and a break of that level on a monthly closing basis would warn of a further decline ahead becomes possible. Nevertheless, at this time, the market is still weak trading beneath last month's low.
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