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-- Posted Tuesday, 14 February 2006 | Digg This Article
METALS: OVERNIGHT CHANGE to 4:00 AM: London Gold Fix $540.50 -$6.10 LME COPPER STKS 105,450 ml tns +3,225 tons COMEX GOLD stks 7.747 ml oz -2,411 COMEX SILVER stks 125.5 ml oz Unchanged OVERNIGHT ACTION: While the US early action is positive, the international gold market remained on the rocks overnight. GOLD: With the gold market seeing a second large compacted correction within 5 trading sessions, we suspect that a growing portion of the spec long camp is becoming very uncomfortable. In fact, the absence of detectable physical buying interest yesterday was the most undermining development from the action Monday, as that hints at a slight change in the complexion of the gold market. In other words, the recent action in gold hasn't resembled the January 17th through 19th correction in gold, as buyers have yet to step up and countervailed the selling pressure and the gold market is now in the 8th day down off the highs. While some Press outlets point to a head and shoulders top and a $515 downside target from the January and February formation, our measurement off that formation is $522, but we are not inclined to call for a major top in gold off current conditions. In fact, once the Fed window is cleared, the equity market perks up off the slide in oil prices and the profit taking wave in "commodities" runs its course, we suspect that April gold will manage to hold above the $529 level. In the mean time, the bear camp does appear to have a slight edge and therefore we can't rule out lower lows for the move. In order to see a bottom, the gold market has to see evidence of renewed physical buying interest in the day-to-day action. SILVER: While the silver market appears to have violated several critical chart support points in the recent washout wave, it has managed to regain a critical trend line at $9.178 this morning. However, we can't rule out more downside action in silver in the event that gold comes under fresh selling pressure. With the outlook for the economy still somewhat disjointed, energy prices under pressure and a number of headlines touting a liquidation or profit-taking wave in commodity companies and in many basic commodities, we can't rule out an extension of the current break. We still think a solid bottom is likely at $8.85 in the March contract and would give the bears a minor edge in the action today.
METALS TECHNICAL OUTLOOK 2/14/2006 COMEX SILVER (MAR) 02/14/2006: The close below the 40-day moving average is an indication the longer-term trend has turned down. Negative momentum studies in the neutral zone will tend to reinforce lower price action. The major trend has turned down with the cross over back below the 18-day moving average. The swing indicator gave a moderately negative reading with the close below the 1st support number. The next downside target is 881.3. The next area of resistance is around 931.1 and 958.3, while 1st support hits today at 892.6 and below that at 881.3. COMEX GOLD (APR) 02/14/2006: The close below the 40-day moving average is an indication the longer-term trend has turned down. The moving average crossover down (9 below 18) indicates a possible developing short-term downtrend. Momentum studies are still bearish but are now at oversold levels and will tend to support reversal action if it occurs. The close under the 18-day moving average indicates the longer-term trend could be turning down. The market setup is somewhat negative with the close under the 1st swing support. The next downside target is now at 532.1. The next area of resistance is around 548.6 and 558.4, while 1st support hits today at 535.5 and below that at 532.1.
-- Posted Tuesday, 14 February 2006 | 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.
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