Friday, April 25, 2014

Is Nikkei ready for a last upleg?...A possible (bearish) pathway

We believe that Nikkei as other major indices is forming a long-term topping pattern(black circle).In terms of the topping pattern of 2006-2007 we are at the pink arrow(55 week Exponential Moving Average support)

Using past price action as a guide...a possible pathway for Nikkei is the following:

Wednesday, April 23, 2014

GOLD-MINERS-SILVER- Who is leading?

Gold and Silver are sitting on their resistance at 1280-5$ and 19-19,5$ respectively.

But the miners (GDX) seem to bounce after hitting resistance at 23,5$ and stopped at 21 day EMA(Exponential moving average)

Is GDX going to pull Gold (and Silver) up?
Is GDX currently forming the right shoulder of an inverted head and shoulder formation?

Probably we will know next week...

Tuesday, April 15, 2014

Gold Miners-Gold-Silver Update- All eyes on RSI

Recently (11/04/14)( we suggested that both GDX and gold probably have to go another leg down that apparently started for GDX last Friday and for gold today.As we can see from weekly charts RSI is approaching its trendline support.

If RSI(weekly) holds above 42 and 43 respectively then this down leg may bounce at 22,3$(GDX) and 1250$(Gold)(green arrows).On the other hand if RSI breaks down the IHS(inverted head and shoulder) scenario is dead and the targets are 20,65$(GDX) and 1200$(Gold) (Red arrows).

We believe that if miners and gold cannot hold 22,3$ and 1250$ respectively then reversing at 20,65$ and 1200$ will be difficult and they may move towards 14,5-15,5$ and 1065$ respectively.

We think that if gold and GDX bounce at the green arrow target then Silver will stay above 19$(green pathway).If gold and GDX go towards red arrow target then a breakdown of silver price under the long term support of 19$ and a move initially towards 17,5$ and then 14,5-15,5$ is very possible

So if something is going to lead the way downwards, it will be Silver  

Friday, April 11, 2014

Gold,Silver,Gold miners Update-Silver ready to run but which way?

GDX: After March highs miners had a steep fall and then a bounce at around 23,5$.We believe that miners probably will have a new leg down towards 22,2$ where they should reverse(at that time RSI will probably hit support at around 42).If GDX falls more than that,then next stop is ~20,3$.In that case the scenario of an IHS is not on the cards anymore.

GOLD: Similar to GDX. We think that it will probably move towards 1240-1250$ where it should bounce

SILVER:Silver is getting ready to move fast, as its price action is confined within  narrowing Bollinger Bands.
We believe that before that, silver might move towards 19$ where there is strong support.If this support breaks then silver will move towards 16-17$.If support at 19 holds then we may see a fast upleg in silver towards 24$

Sunday, April 6, 2014

Gold and Gold Miners-Last bying opportunity?

Gold:We think that gold may have another leg down towards 1240$. RSI14( weekly) should fall a little bit further (red circle) towards 42 where it will touch the rising trendline(green) and probably bounce.Further fall of gold price(below 1240$) or rsi(below 42) will put the immediate bullish scenario under stress.

Same scenario for Gold Miners(GDX)

Another leg down towards 22(+)$ where it should probably bounce towards 31$
 RSI14(weekly) should move towards 40 and bounce

Friday, April 4, 2014

Is Russia a great bargain now or it will be later on ?

Russia (RSX) has broken down from a long term support(around 24-24,5) and know is touching again this line from below(know acts as a resistance).For the time being we lean bearish towards RSX. We will revert to bullish if it penetrates the resistance at 24-24,5 and manages to stay above 26$

If it cannot manage to penetrate  this line then it should go towards 13-14$

Wednesday, April 2, 2014

An imminent oil production shock-A strike on Iran in 2015?

As we can clearly understand from oil price chart, oil is in a upward triangle formation

If oil price manages to breakout from this formation then we will probably see a price around 140$/b (ouch!) as in 2008.
But triangle formations can be very tricky to trade as many times are not continuation patterns but rather reversal patterns.
Something that could help us to clarify our view is the price of oil in gold ounces.

Oil price in gold ounces

There is a striking similarity of the oil price(in gold ounces) behavior  between 1985-1990 and 2009-2014.
In both circumstances oil had a huge drop then formed a bottom and then had a run towards 233 weeks exponential moving average where it formed a bull flag(red circle).In 1991 as you can recall it was the strike on Iraq that caused a spike in oil price.
We believe that we are now at a similar bull flag and that oil price is about to move significantly higher sometime probably in early next year.
In conclusion we are leaning towards a bullish resolution of the triangle which oil is forming from 2011 on wards, based in Oil price per ounce gold.
What would be the trigger for that kind of oil price movement?
Take your pick:A strike on Iran, Russia-West tensions...?

Tuesday, April 1, 2014

Emergening Markets Latin America

Colombia (GXG) It is moving sideways.Until it breaks the red line we are leaning bearish.

Brazil (EWZ) is in a downtrend.Probably in a falling wedge

Chile (ECH) hit the target of the triangle (2011-2013) at 40$ where it probably made a short term bottom. If it manages to stay above EMA 21(weekly) next targets are 49$ and then 53$.

Peru (EPU) is in a triangle formation or in a diamond(both patterns can be continuation or reversal patterns). Around 31$ there is a long term support from 2010.

Mexico (EWW) is in a triangle formation.

Overall nothing is clear yet about Latin America.