-- Posted Tuesday, 11 September 2007 | Digg This Article
By Roy Martens – Netherlands
The following is an excerpt from the technical analysis portion of the monthly Resource Fortunes Premium Newsletter publication, available in its entirety for subscribers at www.resourcefortunes.com. We currently offer an all inclusive 30-day trial subscription for the ridiculously low price of $2.99.
All charts current as of the close on Friday, September 7th.
GOLD
In the last update I mentioned that the settings for a breakout were there and Gold hasn’t disappointed us. After testing the red line 2 it shot up, broke above the moving averages (MA), and on through the double top formation.
This last week it really moved, and we are now clear of the resistance zone which has to act as a support now. The strong move upwards in the last part of this past week suggests that there’s still more to come, with the RSI, Buying Power, and MACD all in a good position to support a further advance.
We shouldn’t be surprised if gold touches new highs within just a couple of days or weeks.
SILVER
Silver is still having a hard time following in the footsteps of gold. We still don’t see that there’s any breakout, leading many to wonder if Gold will be the better investment opportunity after all.
Although Silver is lagging Gold, it is my opinion that it’s just a matter of time before the breakout will occur, and that when it does we could see a very violent move upwards.
Silver has reached the declining magenta trend line again and it should break above it this time around. The RSI, Buying Power, and MACD are all in perfect positions to support a big rally once Silver clears the magenta hurdle. A break will send the big first buy signal into the markets, signalling that the downtrend which began in March is about to end.
Confirmation will be found once Silver crosses the $13.50 level.
OIL
Oil’s descent towards the support zone happened as expected, and then moved higher very quickly as if it were stung by a bee. It almost reached the highs made at the end of July again and by the looks of it, it might surpass them this time around.
If Oil breaks above the resistance zone, the market will get a first warning shot that much higher oil prices can be expected later this year and well into the next year as well. As I mentioned in the last update, a price target of $100 isn’t all that crazy to expect.
The conditions are very good, as the 14 and 50 day (d.) MA are both moving higher with the 14 d. MA close to a new buy signal, this being a cross above the 50 d. MA.
US Dollar Index
This update will have 2 charts for the dollar because we are at a very important juncture.
This is the last call for the bulls to step up and save the dollar from a terrible disaster. The huge Head and Shoulder pattern is about to be completed, should the dollar index drop below the 80 mark. The calculations of this pattern are hinting towards a possible price target of 40, meaning a drop of 50 % from the current levels!
If this becomes a reality, it would spell disaster for the countries holding dollar reserves, and you can bet that they are all eyeing the dollar at this stage. Should there be any indications that this move will commence, these countries will most certainly try to beat each other to the door and sell the greenback ASAP.
Now that the overall picture is clear, let’s look at the daily chart to see what we can expect in the short term.
The monthly chart tells us that a landslide in the dollar can be expected once the 80 level is taken out. The daily chart is confirming this outlook.
We can see that the close last Friday was near the low of the day and at/near the lowest point of the last 14 years! Furthermore, the indicators are telling us that there’s more to come. There are no signs that a quick turnaround is about to happen. The RSI, Selling Power and MACD are all signalling that this break will/could happen as early as next week making it a very exiting week to watch. It will be extremely interesting to see what the big boys are willing to do once the dollar index descends below the 80 mark. Will they panic or will the try to let the dollar slide smoothly downwards to lower levels?
COPPER
The copper price was forced lower by the overall market conditions erasing one of the possible Elliot Wave (EW) counts (the most bullish one) from the picture.
The current EW count shows that a wave C could be already set or is about to be set this upcoming month with a smaller wave c down. At this stage I will give the blue count the benefit of the doubt and expect the blue support zone to hold firm, establish a higher low, a blue 2, which will be followed by a stronger move higher in a blue wave 3.
For this expectation to become reality we will need to see Copper overtake the 14 and 50 d. MA very soon.
Disclaimer: Information contained on the Resource Fortunes LLC website and published in both the Resource Fortunes Premium Newsletter and the Resource Fortunes Elite Newsletter is obtained from sources believed to be reliable but its accuracy cannot be guaranteed. The information contained within these sources is not intended to constitute investment advice and is not designed to meet your personal financial situation. The opinions expressed therein are those of the publisher and are subject to change without notice. The information therein may become outdated and there is no obligation to update any such information, David Zurbuchen, Ming Guo, Roy Martens, and entities in which they have an interest, employees, officers, family, and associates may from time to time have positions in the securities or commodities covered in these publications or web sites. Please seek the advice of professionals as appropriate.
-- Posted Tuesday, 11 September 2007 | Digg This Article
