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Status: Gold And Silver Metals-Gold And Silver Shares-US Dollar
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We have roughly three weeks of precious metals rallies until the next cycle correction is expected on the technicals between April 5 and 9. That theoretically, could be the metals’ market top for the first half of 2010, but we do not think so. Following the early April selling, look for another complete rally for gold and silver and their related shares taking us into May. Then, in May we should see a spring selling cycle we have been forecasting for months. That later cycle is expected to take down almost all markets and perhaps some rather severely. Metals cycle number two is unconfirmed but we are seeing signals that this event is a distinct possibility. Market cycles have been tardy so far in 2010.
Weekly gold completes standard ABC correction; bases in waves 1-2 for rally.
Note that gold has broken through old and hard resistance at $1,000 going back to 2008. This is the new main floor protecting price at $1,007 on the technicals. Next, we see price riding the lower channel but, importantly staying above the line. Also, we see the weekly price at 1127.70 on this Wednesday, far above the 41 day moving average of 1053.45. Momentum is down mildly but previous yearly April highs are evident.
Silver Has Normally Corrected. A New Rally Is Underway.
Silver signals are good for trend as this market is volatile and prone to quick moves. We see hard support and resistance at $17.50 and a higher top at $20 from January last year. Momentum was falling but has supported. And like gold, silver’s price is above the 17-day and 43 day moving averages. This is bullish.
Precious Metals Shares Weaker Than Metals. US Dollar Is Stuck On 80.00.
Shares are still tied to the bigger stock markets. We expect a divergence but it could take several more months. This change-over could be gradual but we did see one instance when gold, silver and the dollar were all rising together in unison. That was a small divergence and it did not hold nor continue. The XAU momentum is down but basing. There is heavy duty XAU support and resistance at 170.92 with our price at 169.92.
A good support signal shows the 41 day moving average at 160.58.
US Dollar Index Is Stalled At 80.00 Support And Resistance.
The dollar chart has some classic technical patterns including the latest bear wedge breakout followed by the consolidation top near 80.00. (1) The dollar price of 80.00 is THE major number on this chart for several years. (2) Price is supported by the up-sloping channel line. (3) Consequently, the dollar is crowded into a corner at 80.00 with the support line squeezing it from the bottom. Today we see hard support but expect a sell next month falling under 79.50 to perhaps 77.50 hard dollar support.
One of two top annual gold and silver trading cycles is now open for business.
While the first and second quarters’ precious metals cycles were tardy, get busy and get investing and trading. We forecast a stronger upside for the next 4-8 weeks followed by some short selling on the obvious forthcoming mainstream failures in credit and banks. Short selling could commence anywhere from an April 5-9 peak to as much as 4-6 weeks later in May. Keep in mind, seasonal cycles in several markets have been thrown off normal annual schedules since the Lehman messes.
Traders and investors should be buying physical and shares right now. In our newsletter we have a great list of trading and investing ideas for you. Meanwhile, you can never go wrong buying physical precious metals and holding them for security. We’ve had a constant run of nearly ten years in gold rising 12-15% per year. It’s not going to stop any time soon. In fact, we predict those annual percentages will rise even more and this a chance arriving usually once in 25 years on the cycles. Good trading! - Traderrog
Roger Wiegand
Editor Trader Tracks Newsletter
The Jay & Rog Blog at webeatthestreet.com
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Roger Wiegand is Editor of Trader Tracks Newsletter for gold, silver and energy traders. Roger provides recommendations for short and longer term traditional stock shares, futures and commodities trading with specifics for individual trades. See webeatthestreet.com for more information.
Contact Claudio Bassi, at Trader Tracks New York City publishing offices for an introductory 30-day trial subscription for only US$49.00. This is half the monthly rate our subscribers pay. Call us at 718-457-1426 Monday through Friday, 9:00am to 4:30pm (EST). You can also e-mail Claudio at cbassi@miningstocks.com for more information.
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