Market Analysis Monday 1st of July

Signs of rising demand

ANALYSIS 01-08-2013

Conditions Rally Still Happening in South Korean stocks

Positive trend occurred again in South Korea stock market. In trading Friday, the South Korean market was back in bullish trend due to the impact of a rise in U.S. stocks overnight is driven by the effect of lowering the jobless claims data for last week amounted to 7 thousand.

Technically, the index in the trading session today, Monday (01/07) is likely to strengthen, test positive trend. At the H4 chart informa bullish hammer gives an opportunity for the index to move upside. However, the volume is likely to increase, as well as an early indication of a bullish index. In addition, RSI, on the H4 chart, is in the oversold area, cue upside.

Expected, the index tested the first resistance level of 260.67 and 273.73. If it fails at 232.03, then the next index is expected to tend to retest the 232.03 support level and continue up the possibility of being in the 221.07 area.

Pound Down Under Analyst Predictions

Sterling in trade week is generally observed plainly shows weakening trend against the U.S. dollar. Trading the currency pair GBP / USD is in the range of 1.5386 after opening at the beginning of the trading week was down about -177 pips or about -1.15% and closed at around 1.5209.

Technically, the trading session today, Monday (01/07), Strerling couple of dollars likely to move in a negative trend.

Weakening Strerling primarily expected soon retest the support at 1.5025 minimum and maximum 1.4919. Meanwhile, if Strerling able to break and hold above 1.5204, then another alternative scenario Strerling the chance to test the existing Resistance 1.5313 and 1.5425 area.

Gold Rebound from Low 34 Months

Spot gold prices rebounded from 34-month lows, the biggest jump in a month, as signs of rising demand for jewelry, coins and bullion after the precious metal is headed to its biggest quarterly fall in at least 93 years old.

Technically, gold at today’s trading session, Monday (01/07) potential reversal, tested positive trend, but prone to profit taking. Indicator RSI resistance likely to re-test the bullish channel and into the area, but the Bollinger Bands are starting to shrink, thus giving impetus to gold to the downside.

Estimated gold price immediately prior to test resistance at least in the area of ​​1267.33 and re-test the maximum level of 1295.91. However, if the gold price could not break and stays below 1229.35 then estimated the price of gold has the potential to test Support the 1196.35 and 1167.78.

XULF Report – 26/06

Gold has not reacted well

XULF Report

Equity markets had been recently reacting negatively to strong US data as it implies the Fed will kick-start their stimulus exit plan into gear although yesterday saw a different and more refreshing response to such data. US Durable Goods Orders, New Home Sales and Consumer Confidence were all better than expected and showed a strengthening US economy and investors gave a moderately positive reply which could be early signs that investors can cope with the concept of stimulus withdrawal. Gold however has not reacted well. It was mentioned in yesterday’s report that this week’s data will be closely scrutinized to see whether the Fed’s intention will materialise and the latest data from the US means it is getting closer and closer.

As I write gold is still tumbling smashing through Friday’s $1269.51 low and now traders should look to trade with the trend and execute shorts on pullbacks to Fibonacci levels and/or execute as price makes new lows. Well done if you are currently in this downtrend but if you are considering the best time to exit and cash in profits either wait for a strong bullish hammer with the shadow twice as long as the body and loner than the prior candlestick. This will signal a reversal and offer a good opportunity to exit and also give traders looking to enter long. If a bullish hammer doesn’t print watch out for a higher lows on a shorter timeframe which can indicate the current trend has exhausted itself and ready to recover somewhat. Trying to buy before candlestick confirmation is like trying to a catch a falling knife so wait for a bullish hammer or higher lows showing short term trend change.

If you have missed this decline wait for price to pullback and intersect with the yellow bearish trend line shown on this 5 minute chart. If it bounces sell and if price breaks the yellow line we could see a small retracement. The horizontal red lines show today’s potential resistance levels so again look to short if price approaches them levels. On summary definitely look for shorts rather than long trades because the absence of support until we move below $1200 means the market could easily keep dropping.

Gold priced dropped to the lowest since September 2010 – 24/06 – 28/06 XULF Weekly Report

Gold tumbled badly last week after Federal Reserve Chairman Ben Bernanke said the exiting of the bond buying will begin if the current trend of economic development continues and a break below two support levels of $1338 and April’s low of $1321 exacerbated the drop. Priced dropped to $1269.51 which is the lowest since September 2010 before having a small bounce on Friday to as high as $1302.46. Bernanke’s language was similar to previous statements reiterating any slowdown will be data dependant and he refrained from giving specific timelines which makes gold’s decline feel a little overdone. However the culmination of a stimulus withdrawal getting nearer and low inflation are hitting gold hard and leaving investors little reason for holding the metal but if uncertainty is around the corner, maybe triggered by China’s slowdown or the Fed’s exit plan or both, then this may help gold fight back and limit the slide.

Due to gold’s multi-year bull market there aren’t many clear standout support levels to help a strong bounce. $1156 is the next potential support level established after a bull market pullback in May 2010 however this is not comforting for the bulls given we are about $140 away from that level. Therefore more declines are expected but this week looks like we may see a rebound before more another downward leg after Friday printed a bullish harami and the RSI has recovered to the 30 level. If the stochastic can cross back above 20 with a cross of the fast and slow lines this will add to the probability of a bounce and take into account that price is also trading on the outside of the lower Bollinger Band signalling a forthcoming correction. Target level will be the 38.2% Fibonacci Retracement level at $1315 which should deliver some resistance and if price can push pass it will find more resistance at previous support level $1321. Gold was range bound between $1338 and $1423 for over 4 weeks across May and June and any break to the upside or downside is likely to dictate sentiment for the rest of the year therefore longer term position traders should consider shorts after corrections. Of course things can change if the US economic recovery has setbacks and stimulus prevails however right now things are very bearish for gold over the long term.

This week holds a relatively busy economic agenda mainly centred on the US. On Tuesday we have New Home Sales, US House Prices and the UK’s inflation report that could indirectly affect gold by moving the GBP/USD pair. On Wednesday there is a final measure of US growth for the 1st quarter which is expected to be 2.4% so be ready to trade following any surprises there. On Thursday we have the US Weekly Jobless Claims and Pending Home Sales and Friday brings a bunch of data releases from Japan covering inflation, house prices, retail and industrial output.

Bullish trendline on the 4 hour chart resulted in a strong sell-off – XULF Report 19/06

XULF Report

As we approach the Fed’s policy statement and Bernanke’s question and answer session at the FOMC’s press conference equities have climbed higher on mounting speculation the Fed will keep the current level of bond-buying unchanged and interest rates near zero. However gold didn’t benefit and the break of the bullish trendline on the 4 hour chart resulted in a strong sell-off.

As you can see the bullish trendline break produced a sharp decline and since reaching the low of $1360.89 price has interacted with the 38.2% retracement level at $1370.20 and began another leg of the decline. The bullish hammer indicates there may be support again at $1360.89 so traders shorting need to be mindful there could be a flurry of buy orders at this level. Place a short stop at $1371 which is just above the 38.2% Fib level and last 4 hour candlestick. According to risk and reward rules profit target should be double the risk undertaken therefore target $1354 but be wary there could be a bounce at $1360. The FOMC statement followed by press conference begins at 19:00 GMT so reduce exposure before this as gold will be very volatile.

Jalatama Loco London (XULF) Report 05/06/2013

XULF Report

It feels like the bulls and bears are on a see-saw with the $1400 mark as the centre point at present making it really difficult to execute position trades. Therefore shorter term intra-day trades are more suitable until the market at large becomes more comfortable with the fact the Fed is ready to taper bond purchases and that it may be soon. It could be a volatile day for gold and equities as Prime Minister Shinzo Abe is scheduled to speak before a press conference outlining more of his growth plans including encouragement to pension funds to invest in more overseas assets which could lift equities and put pressure on gold. We also have Spanish and Italian Services PMI in the afternoon and this evening at 20:15 there is the ADP Non-Farms which is the private sector’s job report for May and is an important precursor to the all-encompassing Non-Farms this Friday.

Always use stop losses especially during potentially volatile days like today. Any trends at present seemed to be short lived so there are scalping opportunities when price either spikes or drops at a fast rate and becomes overbought or oversold. Here the RSI and the Bollinger Bands on the 15 minute chart shows the market is overbought therefore consider a short with a tight stop if a bearish candlestick prints. A stop loss above this morning’s high is an appropriate level. A break higher from this level will indicate further price gains in the short term.

The medium term bullish trendline on the 4 hour chart was pierced last night but as price closed back above the trendline it is arguable that the trend is still intact. Although it is worth reiterating that due to the volatility any trendlines may not be reliable. Medium term, due to price forming a triangle shown by the blue descending line and the medium term bullish trendline, could be determined by a breakout probably caused by one or more of today’s headline news.