|
-- Posted Thursday, 6 February 2003 | Digg This Article
METALS:2/6 OVERNIGHT CHANGE to 4:15 AM:GLD-4.60 ,SLV+1.7 ,PLAT-4.40 London Gold Fix $372.50 -$12.50 LME Copper Warehouse sts 851,550 ton -2,750 tns Comex Gold stocks 2.147 ml Unchanged COMEX Silver stks 107.4 ml oz -609,513 oz OVERNIGHT ACTION: Another volatile session in Asia with sellers dominating the action. GOLD: Already the gold market has seen a $21 correction from the high Wednesday and we are not exactly sure why the war longs are stepping back from the market. Certainly the market sees the US intentions but with the Press ripping apart the US case, it is clear that France and Germany will not alter their positions. Unless the market sees the continued opposition to the US attack, as a force that will delay action, it would seem that war is still a high probability. Maybe longs see the story that Iraq has wired its oil fields with explosives, as a major deterrent to war. We have to think that political opposition and the threat of destruction of the oil fields will prompt the Bush Administration to posture for exile and could cause a delay in the attack date. With the gold small spec and fund long probably topping out around 145,000 contracts Wednesday morning, its not surprising that the market forged a $21 correction in less than 24 hours. We could see the April gold correct to $366.5 but we wouldn't begin to question the near term bull track unless the $363 level is violated. We have been warning about the type of volatility seen overnight and that could be commonplace in the days ahead. Don't get long at current levels without put coverage and those with put coverage, should hold that coverage for the duration. SILVER: The silver market has corrected 20 cents from the high Wednesday and that has to have damaged some bull sentiment. Considering the extensive overbought status in silver and the continued concerns toward the macro economic condition, we fear that silver could see more weakness. Like gold we would not carry uncovered long futures positions. In other words seek at the money long puts as a defensive move. We suspect that weak European numbers this morning will limit the bounce in silver, especially after the debacle of the last 24 hours. Silver is already up 7 cents off its overnight low, so that might be the extent of the corrective bounce. Just to get back into the old up trend channel the May silver needs to climb back to 4.85. METALS TECHNICAL OUTLOOK 2/6/03 #P-METALS 02/06/03: SILVER (MAR): The close under the 40-day moving average indicates the longer-term trend could be turning down. The close below the 2nd swing support number puts the market on the defensive. Initial support for silver is at 466.3 and below there at 459.4 with resistance likely at 482.5 and 487.3. The market's close below the 9-day moving average is an indication the short-term trend remains negative. The daily stochastics have crossed over down which is a bearish indication. The next downside target is 459.4. The outside day down and close below the previous day's low is a negative signal. The downside closing price reversal on the daily chart is somewhat negative. GOLD (APR): Support for gold today comes in near 366.48, while resistance is pegged at 389.48. The daily stochastic's gave a bearish indicator with a crossover down. Momentum studies are trending lower from high levels which should accelerate a move lower on a break below the 1st swing support. The next downside objective is now at 366.48. The market's close below the 1st swing support number suggests a moderately negative setup for today. The market's short-term trend is positive on a close above the 9-day moving average. With a reading over 70, the 9-day RSI is approaching overbought levels. The rally brought the market to a new contract high. The daily closing price reversal down puts the market on the defensive.
-- Posted Thursday, 6 February 2003 | Digg This Article
***This report includes information from sources believed to be reliable and accurate as of the date of this publication, but no independent verification has been made and we do not guarantee its accuracy or completeness. Opinions expressed are subject to change without notice. This report should not be construed as a request to engage in any transaction involving the purchase or sale of a futures contract and/or commodity option thereon. The risk of loss in trading futures contracts or commodity options can be substantial, and investors should carefully consider the inherent risks of such an investment in light of their financial condition. Any reproduction or retransmission of this report without the express written consent of Hartfield Management, Inc. is strictly prohibited.
Previous Articles by Nell Sloane
|
