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-- Posted Thursday, 19 August 2010 | | Source: GoldSeek.com
Job growth in America remains, well, is “elusive” a good word. The most popular stock indices, the Dow, NASDAQ and S&P 500 are now basically unchanged to lower on the year. Inflation hasn’t taken hold and interest rates continue to plunge. The US is pulling out of Iraq. Questions about our ability to do anything meaningful in Afghanistan are front page news and elections in the US aren’t far off with Democrats ability to hold onto key seats in jeopardy. This week Ireland sold a reasonably sized debt issue proving there remains a market for their debt. It’s also interesting to note that the emergency fund the EU and IMF setup remains largely untouched, which reminds me that our TARP plan did not tap all the funds made available to it either. What seems to work is having plans like this in place as a backstop long as they go hand in hand with reliquefying bank balance sheets. So than what’s behind gold’s move right now? My guess is that the so called “smart money investors” have come to the conclusion that the US and other world governments have little choice but to add in one form or another, more financial stimulus. How they disguise the stimulus seems immaterial to me as what I see is the printing presses running and US debt being monetized. News headlines aren’t yet alarming. You don’t see headlines stroking unemployment, a double dip recession, a falling Dollar or other major issues. There’s talk about it from time to time, but it’s simply not headline news. Because of this we haven’t seen large jumps in gold prices. Rather, the move to the upside has been slow but fairly consistent over the past two weeks. I look for more of this in the near term and expect to see new all time highs before year end. Below is a Seasonal Gold Chart produced by Moore Research Center, Inc. In my last report I wrote about gold’s tendency to see prices turn up in mid to late August. It looks to me like gold is following this pattern, at least for the time being. Obviously seasonal studies like this take into account many factors, but what I look for is correlation between shorter period of time and longer term ones. 
Seasonally speaking, gold often sees upside momentum pick up into year end. I don’t see anything on the horizon to change this pattern at this point in time.
Below is a Daily Chart of December Gold. Each individual bar on the chart represents one day of trading. In “red” I have plotted the 18-Day Moving Average of Closing Prices, in “dark blue” the Swingline Study and the “black dashed line” is the Bollinger Band Study. The dark blue line on the chart below is the Swingline Study, which is a technical tool I developed to help define what the current trend is. At this time the Swingline Study is bullish. Rally highs are higher than previous rally highs and current break lows are higher than previous break lows. That is the definition of an uptrend. I use the 18-Day Moving Average of Closes to filter the trend displayed by the Swingline. Prices are over this moving average, which confirms the Swingline’s bullishness. Stochastics since my last report have embedded. This is very bullish. Until the last Swingline low of 1218.9 is broken, I look for prices to move higher. My upside target at this time is a challenge of the Bollinger Top, currently 12441.
As you can see, prices have taken out their last Swingline High of 1218.8 and are trading over the 18-Week Moving Average of Closing Prices. This was important as it put both the Daily and Weekly charts in synch. Both have a pattern of making higher highs and higher lows. In addition, both are trading over the key respective 18-period moving averages. The seasonal chart also has its Slow Stochastic Study pointing up, which leads me to believe that a test of the Bollinger Band Top, currently near 1260, is a potential upside target. I am bullish and looking for a test of contract highs. Unless prices get back under 1185.6, the last low on the Weekly Chart using the current chart formation, I see the uptrend staying intact. Pullbacks in my opinion present a buying opportunity. On the Daily Chart one of the key is to not see prices get back under 1218.9. However, even if this were to occur, because prices are so far away from the 18-Day Moving Average of Closes, I would think that support would be seen all the way down to that number. In addition a bullish seasonal trend often kicks in at the end of August. Therefore, my intent is to issue buy signals in my Twice Daily Updates, as I did last night. The key to keeping up with my trade recommendations is through my Twice Daily Written and Oral Updates. That is where I put out specific trade recommendations covering all the markets I cover with twice daily updates to them. I rarely put out specific recommendation in this Gold Report since it’s easier to use my Twice Daily Updates than this report which is limited to but once a week. If you currently do not or have not had access to my Twice Daily Oral or Written Updates, you can easily be added to our phone and e-mail list for a trial period by calling my staff at 1 866-973-2077. If you have had access and want to subscribe to the Daily Updates, simply copy and paste the following into your browser or go to: http://iraepstein.linngroup.com/delayed-trade-recommendation2/oral-update-service.html We provide both client and non client subscriptions. Prices differ as clients who have a funded trading account with us pay $25 a month for a subscription while non-clients pay $50 a month. You can read more about what the subscription by clicking here. Futures Trading Kit and Twice Daily Updates If you haven’t received our Futures Trading Kit, you should. The Kit contains access to: Live Chart Data, Charts, Quotes, Technical Chart Studies, Videos that talk about trading techniques, money management tools, access to our Daily Market Research along with our proprietary electronic trading booklets and much more. Best of all, it’s FREE to experience. Simply call to receive your of our Futures Trading Kit. It’s your FREE Trial to our market information and other trading tools. Just call 1-866-973-2077. Disclaimer: This publication is strictly the opinion of its writer and is intended solely for informative purposes and is not to be construed, under any circumstances, by implication or otherwise, as an offer to sell or a solicitation to buy or trade in any commodities or securities herein named. Information is taken from sources believed to be reliable, but is in no way guaranteed. Chart data is courtesy of LGP-IraCharts. No guarantee of any kind is implied or possible where projections of future conditions are attempted. Futures and Options on Futures trading involve risk. In no event should the content of this market letter be construed as an express or implied promise, guarantee or implication by or from The Ira Epstein Division of The Linn Group, Inc or The Linn Group, Inc. that you will profit or that losses can or will be limited in any manner whatsoever. No such promises, guarantees or implications are given. Past results are not indicative of future performance.
-- Posted Thursday, 19 August 2010 | Digg This Article | Source: GoldSeek.com
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