After I post charts and opinions, I like to go back a few months later and see how things have progressed. Today I’ll be updating charts originally posted in July, August and September of 2014. I’ll be covering Gold Futures, Silver Futures,Â the Standard & Poor’s 500 E-MiniÂ and the US Dollar Index.
On July 27th, I did an article on Gold Futures here. In that post, the highlights were:
- A longer term target of 1033.4.
- TheÂ consolidation phase of gold since mid-2013 with the trading range increasingly becoming smaller. The trading range narrowed from $252 to $59 on a weekly basis.
- Â At that time, gold was trading at 1308.5.
Lets take a look at an updated chart and see what has transpired in the past 3 months.
In the chart below, you can see gold has broken several support levels on the daily chart as well as the weekly. It’s currently trading at 1173.5 or a decrease of -10.31% since July 27th. The current daily target is 1150.6 and the weekly target is 1138.1.
More importantly, gold closed Friday, October 31st, below a crucial support level of 1179.4. I’ll explain the significance of that level in a separate chart.
Gold Futures 6 month, daily chart
Now, why is 1179.4 a crucial support level ? In the chart below you’ll see 1179.4 was the low on June 28th, 2013. On December 31st, 2013, gold made a low of 1181.4 and on October 6th, 2014 a low of 1183.3; in essence you have a triple bottom, (if you believe in such things), that has now failed.
It is worth noting that on July 26th, 2010, gold made a low of 1155.6 which could be perceived as a sliver of support for desperate bulls.
Gold Futures 3 year, daily chart
The above chart of Gold Futures is a textbook example of the point I hope I was able to make inÂ an article I wrote here just recently.
And let’s not forget theÂ Goldman Sachs Precious Metals Index (GPX). In this article from September 10th, I showed 3 levels of support at 1652.66, 1589 and 1584.59. In the below chart you can see all three levels have been broken.
This week saw the GPX give up another -5.04%.
Goldman Sachs Precious Metals Index (GPX)
Now onto the S&P 500 E-Mini. On August 8th, 2014, I did a piece on the Standard & Poor’s 500 E-Mini here.
The highlights of that post were:
- A correction was occurring
- 2 targets of 2011.5 and 2030.
- An open gap at 1896.5
- Central Banks and interest rates
Just a week shy of 3 months since that post, lets see where we are.
- A correction did occur from September 19th to October 15th. The correction was from 2014.5 to 1813 or 10.0%; a perfect “technical correction.”
- The target of 2011.5 was hit on September 19th.
- The target of 2030 is still valid and definitely within striking distance now.
- The gap at 1896.5 was closed.
- The US Federal Reserve has ended QE3 and in their October 29th announcement said.. “likely.. toÂ maintain the 0 to 1/4 percent target range for the federal funds rate for a considerable time..Â especially if projected inflation continues to run below the Committee’s 2 percent longer-run goal”*
- The Bank of Japan (BOJ) announced on October 31st they would increase their bond purchases (QQE) and will now include purchases of exchange-traded funds (ETFs) and real estate investment trusts (J-REITs).*
S&P 500 E-Mini Â 1 year, daily chart
In the annotated chart below, I’ve outlined how the target of 2030 was derived.
S&P 500 E-Mini 4 year, daily chart
On August 24th, 2014 , I talked about Silver Futures here. In that post, the focus was on two key support levels that gave way and technically weakened silver appreciably.
- 26.87 as 1st support
- 21.455 as 2nd support level.
- These levels were derived from a 20 year, monthly chart and had held for 18 months and 2 months, respectively.
- A longer term target of 14.095
So let’s see where silver is trading now and how much, if any, damage was done by the two support levels not being able to hold.
In the chart below you can clearly see Silver continues to weaken, notwithstanding the noticeable buying late Friday.
- A bear flag formed andÂ did play out.
- The current target is 16.08 and has been hit but isn’t closed.
- The longer term target of 14.095 is still valid.
- Price would have to close above 16.995 in short order to give any validity to Friday’s (10/31/2014) buying.
Silver Futures 1 year, daily chart
On September 12th, 2014, I talked about the strength of the US Dollar here. Â In that post I highlighted:
- 2 areas of consolidation preceding upward moves.
- The consolidation periods were relatively short; 14 sessions and 6 sessions.
So how’s the dollar been doing in the last 6 weeks ? Still strong and as you can see in the chart below it’s currently at a new multi-year high. After the Bank of Japan’s announcement last Friday, I think the dollar has more room to the upside.
- Current target = 87.485
- It is worth noting that there is an open gap at 87.74 on a weekly chart.
- On the same day that gap was created, a 5 year high was put in at 88.905.
US Dollar Index 1 year, daily chart
Charts were originally posted on @seeitmarket.
Thanks for reading, always use a stop and follow the chart !