Is This A Long Or Short Term Gold & Silver Bottom? August 13th 2015
Both gold and silver created, at the very least, a short term bottom. One thing I think people fail to realize is what has really taken place on gold as well as silver. The bottom line is both gold and silver have a lot more work to do before anyone should think about calling this a long term bottom. Why? First, take a look at the charts. Through the month of July both of these precious metals got very comfortable below the previous closing price low. There is a big difference between a quick intra-day spike down to the mid 14’s on silver and the fact that we spent most of the month in the mid 14’s. A quick spike down intra-day really means nothing. During July we not only spiked down to new lows but we closed there. If you guys know me you know I value the candle close as the most important part when it comes to determine future reaction point possibilities. Therefore I new closing price low is far more important than a quick spike lower. Take a look at the charts.
I had to zoom way in to get the entire trendline in the picture and as a result you cannot see the closing price of the candles. If you look at your own daily chart of gold and silver you will notice that I marked the trendline of off the candle body. Also you can see how the price closed and stayed well below the previous daily closing price and therefore the retest to what I call the backside of this level is quite important. As long as that general area holds I still believe downside is very likely. I also believe we will continue to see strength in the dollar for the time being and thus lower prices in commodities. The trouble with trying to catch the bottom is that when it turns trying to buy physical will be very difficult and you will pay a major premium. Still holding for lower prices to load up personally.
One more thing before we move on to the Fx market. I read an interesting article today that I thought I would share. Its titled, 12 Signs That An Imminent Global Financial Crash Has Become Even More Likely. Take 5 minutes and check it out. On to the markets!
Strong Rally In The EUR/USD Continues
The Euro gave a very aggressive push to the upside today. Additionally the EUR/USD produced a confirmation short off of the previous day’s high. Obviously this trade was stopped out in short order for a full 2% loss. Later in the day we came into a major manipulation point that happen to be just about even with the 1.1200 psychological barrier. It was quite the large level and the Euro was well extended for the day. Overall it was setting up to be a great New York reversal day trade. The Only trouble with this setup is that it did not provide a valid confirmation entry short and therefore the trade was not taken. Today I do not have a valid lower manipulation point and as a result will only be looking for a short from one of the upper listed levels. This could change if we have a new lower level form sometime during the day but we will have to wait and see if that does occur.
GBP/USD Breaks Above Major Short Term Trendline
The Pound is still showing some strength that I have been looking for since last week in terms of overall direction. As I still need to see this weeks COT data to confirm that last Thursday’s data didn’t scare the market to begin positioning short, at this point it looks the same. Honestly, at this point not hiking rates should be the strongest thing for the currency as hiking would send the already very weak and getting weaker economy of the UK into a tailspin. That being said I still favor the long today but I have listed one major upper manipulation point that I would still take a short from as you can see on the chart.
Today the GBP/USD produced a nice short near the end of the NY Session. Once again the trade got to within only a few pips of the take profit before stalling out and only giving us +3% on the trade. Still a nice trade overall so I won’t complain too much. If your a member make sure to check out today’s Daily Market Review for a full break down of both recent trade setups.
Forex News For August 13th 2015
US Retail Sales Ex Autos 8:30 AM Eastern: Sometime this is called Core Retail Sales. Essentially it takes out auto sales which makes up roughly 20% of all retail sales. It does this as auto sales can be very unreliable and thus it is more accurate with them out. Without a doubt a big market mover lately. One of the nice things about day trading the New York session for the last few years is we didn’t really have to worry about news other than NFP. Now the market responds in a big way to most US data and that includes tomorrow’s release. The month Retail Sales is expected at .4 and anything over a .4 deviation +/- from the expected number will create quite a large spike. Its important to note that the last 2 months the market has created the spike and then completely retraced the news. If your trading this number make sure to look out for the headline number as well. If you see a conflict expect to see a whipsaw.
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