Gold and Silver- 19 Jul

Gold was knocked down with news that Obama says everything is fixed and the crisis is over. Sure. Well that’s how it works now, risk on risk off cycles are compressing from hours to minutes. Silly. The gold chart is over-bought with an RSI of 71 and appears to be headed for correction mode. Stochastic is embedded and until it crosses the 80 level it suggests pullbacks are buying opportunities. We would not want to see 1577 to be taken out, initial support, because it would nullify the current uptrend in place with a lower low. Very strong support exists lower at 1555. Resistance overhead is the Bollinger band.

For investors, PHYS is a good choice because it holds 100% fully allocated gold bullion. It closed down after bouncing at support of 13.73. RSI has come off with the correction and the premium to Net Asset Value has backed off to 3.05%. It appears that the current uptrend will be nullified today, the gold pre-market is down slightly, and a the low of 13.73 is likely to be taken out, forming a lower low. Stochastic has lost embedded status with a 76.85 reading and indicates an initial price target of the nearest moving average, in this case the 20 day MA at 13.47.

For the traders of gold, GLD is still a valid instrument to use. Buy and holders should avoid this ETF. A big red candle was painted and the gap around 155.50 was filled. Support comes in at 153.60 and resistance is the all time high of 156.58. RSI indicates gold is correcting an over-bought condition and has fallen below 70. Stochastic remains embedded and so far indicates that pullbacks should be viewed as buying opportunities. The uptrend is in little danger of being taken out with the previous swing low all the way down near 148.

Stockcharts has fixed the silver chart now to show intra-day price data, so the candle chart can be shown again. Thank You Stockcharts! Silver has established resistance at 41 while painting a hammer candle on the chart. Support is near the end of the “handle” of the hammer candle at 38.50. The swing low is at 38 and this needs to hold  in order to maintain the current uptrend. The 18 and 45 day mAs are climbing and need to both get above the 100 day MA to achieve the most bullish stance, with all moving averages below price in order of shortest to longest duration. RSI is correcting lower after just missing the over-bought level of 70. Stochastic remains embedded above 80 and indicates pullbacks should be considered buying opportunities.

PSLV, the 100% allocated bullion fund, should be held by investors in physical rather than SLV. The gap around 18.50 was filled on a big red candle down and in the the process the premium to Net Asset Value dropped to 18.59%. Price closed right at support 0f 18.03. Another gap on the chart is present at the 17.20 area and lies just above the the next layer of support being provided by a swing high and the 100 day MA. the swing low just below the current daily low looks vulnerable and if it is taken out the chart goes to neutral and loses the uptrend. Stochastic is embedded above 80.

For the traders, SLV closed down hard and filled the gap at between 38 and 39. I bought some Jan 12 40 Calls and filled at 3.60. Kind of a ballsy move with the gap at 36 remaining open and begging to be filled. My thinking is that RSI came off real well with stochastic still in an embedded state above 80. This could be a brief pullback back into the Bollinger band and nothing more. Conversely, if the current swing low is taken out the chart loses the uptrend and and stochastic will likely threaten to cross the 80 level and lose embedded status. If it does, the initial price target will be the nearest moving average , in this case the 100 day MA. It lies just above the gap where their is additional support from a swing high. The plan is to buy another round of calls in gap with the belief that the blue trend line holds. Spectacular news the the world’s financial crisis is over for a day or two could really push us back into the congestion zone between 32 and 38.


This entry was posted in GLD, Gold, Matrix Sentry TA, PHYS, PSLV, Silver, SLV, Technical Analysis. Bookmark the permalink.

One Response to Gold and Silver- 19 Jul

  1. Chad says:

    Gold Confiscation will be sold to the general public as a necessary step to stabilizing the dollar and a return to the gold standard

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