Stops’ Hunting – Bullion Daily 30th June

Bullion Daily

The following information is a guideline (trading plan) and should not be treated as financial advice. Not advice but banter and active in sharing trade ideas via twitter @sugardaddyFED. You can also follow us via TradingView.com for the latest charts update.

Daily Update

Safe Haven bid on Monday open but that Gap has been filled and price action is currently struggling

Gold actually moved lower in tandem with the dollar index

NFP week often see selling pressure as the momentum trader see a Fed rate hike = long dollar

Sellers could continue to drive market lower but the longer it takes then a potential short squeeze is due

A retest at 1150 – 1160 cannot be rule out here but look to swing long with tight stop

Upside remain capped and only a break above 1200 will help alleviate the selling pressure

Daily Update

We sense the selling momentum is slowing down while we look for an opportunity to swing long

As long as price managed to find support above 15.40 then it could have a corrective rally

We have a daily cross below the lower Bollinger band and more often than not, we see a small reversal

Break below and we will only have support at 14.50 levels

Short term expectation is for further weakness but if sellers fail to push lower then expect a squeeze

After a spike, price has resumed lower with the possibility to retest previous low at 1057.50. The 4 hourly RSI has a limited upside which add the bearish sentiment in the short term. A close below previous low will allow the bears to target the lower channel line.

The selling pattern look like a stairway to HELL and well we have it here and key support lies on 650 to 660 levels. We continue to monitor the price action and could wait for further confirmation of a potential corrective bounce. However, this could also play out as an inverted cup and handle pattern thus the corrective bounce and then another sell off is viable (example below).

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Inter Market Analysis – Game Changer

Inter Market Analysis 30th June 2015

Equity

World markets

Shanghai 4,277.22 +224.19 (5.53%)
S&P 500 2,057.64 -43.85 (-2.09%)
Nikkei 225 20,235.73 +125.78 (0.63%)
Hang Seng Index 26,250.03 +283.05 (1.09%)
TSEC 9,323.02 +86.92 (0.94%)
EURO STOXX 50 3,488.77 +19.87 (0.57%)
CAC 40 4,882.64 +12.82 (0.26%)
S&P TSX 14,490.15 -317.94 (-2.15%)
S&P/ASX 200 5,459.00 +36.50 (0.67%)
BSE Sensex 27,780.83 +135.68 (0.49%)
TA25 1,647.46 +6.03 (0.37%)
SMI 8,881.07 +12.68 (0.14%)
ATX 2,413.97 -13.23 (-0.55%)
IBOVESPA 53,014.21 -1,002.76 (-1.86%)
SET 1,504.55 -6.64 (-0.44%)
BIST100 82,087.30 +331.11 (0.40%)
IBEX 10,947.40 +93.50 (0.86%)
WIG 53,107.85 +202.36 (0.38%)
TASI 9,004.09 -55.85 (-0.62%)
MERVAL 9,851.39 -288.93 (-2.85%)

Risk On

  • Additional stimulus from China after the rate cut
  • Asian equities recovered
  • German Retail sales came in better than forecasted
  • UK Final GDP came in line and a rise in business investment

Risk Off

  • EU says the door is open for a deal with Greece
  • Greece referendum uncertainty – not paying the IMF
  • Safe haven play with trade on long yen and bonds
  • Global Equities tumbled with end of month selling
  • Car bomb in Yemeni capital

Outlook: Previous GAP filled and now there is another big gap unfilled right at the top. Unless a deal is clinched, expect more downside as many longs are trapped and giving in. It is a short trading week in the US with 4th July as holiday.

Biased: Corrective rally is expected as risk ON biased outweighs risk OFF simply because Greece Referendum should be priced in while the new Chinese Stimulus has yet to work its magic. However, we may see new low on EZ equities before a decent bounce.

Currencies

  • Long Yen trade is on while the dollar failed to impress as traders jumped to the Euro
  • Short NFP week – dollar and Euro at stake while commodities currency is at knife edge

Outlook: Dollar strength and resilience brought to question here-still trading within a big symmetrical triangle. Price action is trading within an inside day and it hinged on the mid Bollinger band (possible continuation or reversal)

Biased: Yen could further strengthen with no deal in sight. Dollar may aim higher number on the back of US economic data. Weaker dollar is supportive to the weak Equity market  

Bonds

  • A bullish engulfing candle and today price action is trading within it (need to see close for an inside day confirmation)
  • Potentially, this could be a reversal play or another Bear Flag but the optimum trade is currently within the channel
  • PA still trade below the 20 MA and daily RSI maintain bullish divergence
  • Bollinger Band converging for a potential breakout

Outlook: Completed the inside day continuation pattern with a sell off but support found at 149.85. Previous gapped up and out of the downtrend channel, possibly a retest on that breakout level at 151.10 which confluence as the 61.8% and also above the 20 DMA.

Biased: Biased for a retest lower but look to long Bunds at 151 levels to 150.80

Commodities

  • No Iran deal as of yet and might miss deadline
  • Copper broke below the bear flag formation and resistance and the 20 DMA kept upside limited

Outlook: Stimulus happened from China but commodities remain lower

Biased: Weekend safe haven bid happened but the corrective rally fizzles off. We are biased for more downside on commodities front in the short term.

Watch list

USD index

IHS is put into question but it is still possible this week as we have host of US economic data. Price action could continue within this symmetrical triangle. Current PA is trading as an inside day while Bollinger band is converging.

German Bund

Playing the channel line and watching how this will transpire. Possible game changer should a deal be secured.

Copper

Chinese Stimulus happened but price failed to break higher which has put this trade on hold. Rather, we could wait for a retest of 2550 levels. Shorting Copper is possible but RR will not be as great.

German Dax

We will not rule out a retest lower but in the meantime, price may reconnect to 20 dma

Spill Over Crash – Bullion Weekly

Fundamentally, the global economy is on the path of QE-induced recovery. However, commodity market remains subdued and reflects lower prices – over supply and lack of real demand is being reflected in the market place. We are seeing this throughout the industrial metals such as Copper, Aluminium, Platinum, Palladium and Rhodium.

Over the last few weeks and months, the financial world were celebrating all time high on almost a daily basis and the herd mentality drove the market further. There was a short term sustained euphoria or what we like to call the distribution effect of wealth. Those concerns about the economy suddenly disappear or shelved under the carpet for that while. That skeleton in the cupboard looks to come knocking round as Eurozone continue to do battle with Grexit and last Friday we have the Chinese stock market plummeting close to bear territory. We beg to question from our previous argument if this QE-induced recovery is sustainable in the long run and can it be sustained after all? Many argued it will be too difficult as newly elected politicians preached “time for a change” yet tough reforms are yet to be made.

What is in store for us next week? The good news is it will be a short week with the US close on 4th of July. The bad news is we will start the week with a tsunami of Greece news having no deal but a referendum over the weekend. Deadline after deadline has passed yet we still have no solution. Last week commentary, we highlighted how the US dollar index will benefit from such turmoil as it stands for a safe haven currency. Grexit scenario added an extra element of uncertainty but should deal arrive, the dollar rally could well subside as traders look elsewhere for better yield.

With a short week ahead in the US market, the dollar positioning is set to create volatile price action. Next week we have a host of employment data and technically, dollar could rally further to test 20 WMA. A solid break and close above could meet resistance at 97.00 levels but we are not ruling out a higher dollar given the uncertainty in the Eurozone.

In the medium to long term, we envisage a weaker dollar index as the last Federal press conference rings a clear dovish remark and additional (not necessarily) helpful comments from other FOMC members may have solidify that Yellen wants a weaker dollar for now.

Gold Technical Outlook

We maintain the argument that a dip in gold is a swing long opportunity. Last week price action has an impulsive selling and all the daily support zone were taken out. Weekend euphoria that a Greece deal is imminent has had the safe haven metals to sell hard. However, there was no deal and the safe haven demand did not pick up at all. The reallocation of dollar long has indeed took a hard beating on the metals. Given that the Greece turmoil could go on to the wire, a possible gap up on Gold on Monday could be at play.

Trade: Pullback is a swing long opportunity.
Position Valid Date Price Action Stop Loss Target Results
LONG 15th – 19th June 1193 Closed 1185 1203 +10
SHORT 15th – 19th June 1173 Closed 1181 1164 -8
LONG 21st – 26th June 1175 Live 1150 1232
LONG 21st – 26th June 1185 Live 1150 1260
20 WMA 50 WMA 100 WMA
1193 1219 1259

Silver Technical Outlook

Weekly Chart

Silver failed to close above the 20 WMA at 16.43 and that will act as resistance. Only a clean break and close above will give the white metal a bullish momentum to possibly test the 50 WMA which currently sits at 17.25. There are 2 possible scenarios:

1) With the RSI at support, we may see a support to test higher prices first. Current price action could be a great buying opportunity with a limited upside of 17.20

2) History tend to repeat itself and we are not ruling out that prices could take a taken like Palladium, taking out all meaningful support zones. Current price action is range trading within a bear flag formation and the general trend remains bearish in the downward channel.

The weekly RSI may have found support and could bounce higher here before taking a dive lower.

Trade: Pullback is still a buy. Valid for this week only.
Position Valid Date Price Action Stop Loss Target Results
LONG 25th – 29th May 16.60-16.80 Closed 16.00 17.50 (17.80) -0.70
LONG 08th – 12th June 15.70-15.90 Live 15.30 (15.50) 17.20
20 WMA 50 WMA 100 WMA
16.38 17.14 18.92

Platinum Technical Outlook

Weekly Chart

Price action in platinum decided to spin lower and took out our long stop at 1060 by 2.5 points. Technically, price breached the Bollinger band and a bullish hammer could mean a reversal indication. Shorter time frames also indicate a possible breakout for a corrective rally which may start as early as next week. We will continue to run the platinum short with stop loss at break even as insurance but looking to long on a breakout.

Here are some of the reasons to go long:

– Platinum is oversold after the FOMC statement that had a revision lower on US GDP

– Dollar weakness has not transpired into any buying but that is about to change

– A 20 WMA reconnect could be the play for a corrective rally

– 4 hour RSI bullish divergence thus a corrective rally is overdue

Trade: Looking for a potential short squeeze.
Position Valid Date Price Action Stop Loss Target Results
SHORT 15th – 19th June 1085 Live 1085

(1100)

1030
LONG 22nd – 26th June 1075 Closed 1060 1140 -15
20 WMA 50 WMA 100 WMA
1137 1234 1335

Palladium Technical Outlook

Weekly Chart

There remains no corrective rally as the selling took out key support zones. Price action is suggesting a run to 655 remains possible on this weekly chart. For the 7th consecutive weekly close with red candles – Palladium could in effect target a 2 months of selling bonanza. Next key support lies at the channel line of 650 – 660 levels for a possible swing long.

Trade: Long got stopped out.
Position Valid Date Price Action Stop Loss Target Results
LONG 22nd – 26th June 690 – 700 Order Placed 680 750 -15
20 WMA 50 WMA 100 WMA
768 794 776

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Weekend Turmoil – Bullion Daily 26th June

Bullion Daily

The following information is a guideline (trading plan) and should not be treated as financial advice. Not advice but banter and active in sharing trade ideas via twitter @sugardaddyFED. You can also follow us via TradingView.com for the latest charts update.

Daily Update

  • With the Aussie dollar heading sharply lower, we are not discounting that gold could see follow through selling
  • In addition, the US dollar index is anticipated to test higher so no joy for the yellow metal
  • A break below 1169 will open the flood gate for 1162 and then 1156 levels
  • Downside pressure persist with several target of previous low at 1169 and 1162 levels
  • Only a break and close above 1205 will alleviate the selling pressure
  • A break and close below 1150 then expect lower prices to advance to 1100 and 1050 levels
  • The bearish gartley remains a possibility but will be invalidated on a break below 1150
  • Unless drastic happen, there is lack of buyers in gold but a risky long at 1162 with a very tight stop could be in play

Daily Update

  • A large sell order at 7 am London time open the flood gate and broke below the megaphone pattern (tested close to 15.50 levels which was highlighted in our article)
  • Price continue to trade below the 20 DMA and we cannot rule out a break lower to retest the lower Bollinger band at 15.50
  • The daily chart is a hammer candlestick but is this end of the selling?
  • Noteworthy, the price broke below the Bollinger band and could well be the start of a reversal (need confirmation)
  • RSI remains steady and not at oversold readings yet
  • Short term expectation is for further weakness but if sellers fail to push lower then expect a squeeze

The short term bottom at 1057.7 is in danger of being tested and we are showing it here on a lower time frames.  A break and close above 1082.8 will get us to enter a long position. Let us take this opportunity to also show how price action may repeat itself here. We drew the circles at the RSI indicator a week before it happen and given that it is playing out like this does not bode well for platinum.

Without a clear signal that the selling has abated and no divergence on the RSI, then sellers will continue to drive this market lower. Sell off continues and there is no respite after worries automobile sales could go south in China. Commodities currencies are free falling and with a stronger dollar on the background, this is a sellers’ market.

Inter Market Analysis – 26th June

Inter Market Analysis 25th June 2015

Equity

World markets

Shanghai 4,192.87 -334.91 (-7.40%)
S&P 500 2,102.31 -6.27 (-0.30%)
Nikkei 225 20,706.15 -65.25 (-0.31%)
Hang Seng Index 26,663.87 -481.88 (-1.78%)
TSEC 9,462.57 -13.77 (-0.15%)
EURO STOXX 50 3,584.24 -26.67 (-0.74%)
CAC 40 5,006.34 -35.37 (-0.70%)
S&P TSX 14,897.50 -50.01 (-0.33%)
S&P/ASX 200 5,545.90 -86.80 (-1.54%)
BSE Sensex 27,806.23 -89.74 (-0.32%)
TA25 1,671.33 -10.99 (-0.65%)
SMI 8,944.35 -100.97 (-1.12%)
ATX 2,481.08 -18.39 (-0.74%)
IBOVESPA 53,175.67 -666.87 (-1.24%)
SET 1,519.59 +0.12 (0.01%)
BIST100 83,276.08 -1.02 (-0.00%)
IBEX 11,270.70 -37.70 (-0.33%)
WIG 53,992.87 -148.33 (-0.27%)
TASI 9,367.29
MERVAL 10,069.91 +59.92 (0.60%)

Risk On

  • Tesco beat forecast
  • US hospitals win Obamacare (hospitality stocks rose)
  • Italy consumer confidence rose 109.5 vs 105.7

Risk Off

  • China Equities turmoil all eyes on Xinhua and Government to do something about it (impending stimulus?)
  • Asian equities lower and Nikkei closes -0.31% (need weaker yen but yen bought as safe haven)
  • Greece deadline Saturday
  • Lower German Import price index in May -0.2% against +0.2%

Outlook: No deal as of yet, deadline moved to Saturday. Expect Monday blood bath on global equities. China big Risk Off but stimulus imminent over the weekend is a possibility. What happened post Greece? Mind you GAPs need to be filled.

Biased: Friday cautious play but looking to buy once GAP filled. Risk Off to begin with but will play by ears.  

Currencies

  • OPEX at 10 am NY
  • SNB Jordan say Franc still too strong
  • Banks are expecting Euro parity against the dollar no matter what happened to Greece
  • No resolution yet so Dollar well bid with IHS formation still possible

Outlook: Dollar on the back foot but the IHS could still be in play

Biased: Neutral but watching the dollar index closely.

Bonds

  • Note inside day on 19th June and yesterday we have another inside day that is close to the mid Bollinger band – might see a continuous sell off
  • PA still trade below the 20 MA and daily RSI maintain bullish divergence
  • Bollinger Band converging for a potential breakout

Outlook: Lower Bunds will send yield higher – favour Euro – deal imminent?

Biased: Biased for one more leg lower-possibly a double bottom at 148.50 level

Commodities

  • Silver Crashed at 7 am London open to 15.52 (spiked higher and back to unchanged – thus created a hammer)
  • Palladium sell off to 2013 September low (still heading lower at the moment)
  • Copper attempting a IHS formation but still in downtrend channel

Outlook: China imminent stimulus package to save the economy at 7% growth?

Biased: Neutral with a bias for a corrective rally with a safe haven biased as traders look to get some weekend insurance in case Greece fall out.  

Watch lists

Dollar Index

IHS is still in play unless it trade out of the symmetrical triangle. PA still trading below the 100 ma.

German Bund

Hit resistance and could resume lower despite bullish RSI divergence

Copper

IHS formation but hit resistance and China stock turmoil might mean imminent stimulus – Buy on breakout.

Palladium

Trending Lower – Bullion Daily 25th June

Bullion Daily

The following information is a guideline (trading plan) and should not be treated as financial advice. Not advice but banter and active in sharing trade ideas via twitter @sugardaddyFED. You can also follow us via TradingView.com for the latest charts update.

Daily Update

  • Imminent Greece deal – Gold sell off with a stronger dollar
  • Talk of Greece exiting the Eurozone increase potential of a gold sale to pay its debt
  • Downside pressure persist with several target of previous low at 1169 and 1162 levels
  • We are not ruling out the possibility to test lower Bollinger band at 1167 today and the lower trend line support at 1156 levels
  • Sellers dominate in this market and the price action seems to suggest old sellers trying to find new sellers here
  • Only a break and close above 1205 will alleviate the selling pressure
  • A break and close below 1150 then expect lower prices to advance to 1050 and 1100 levels
  • The bearish gartley remains a possibility but will be invalidated on a break below 1150
  • Lower timeframes suggest a potential Head and Shoulder pattern

Daily Update

  • Still trading within a megaphone pattern – expect further range trading here but a break lower is not being discounted
  • Price continue to trade below the 20 DMA and we cannot rule out a break lower to retest the lower Bollinger band at 15.50
  • Short term expectation is for further weakness but if sellers fail to push lower then expect a squeeze

No change in our current view on platinum price action as it indicate a short term bottom is in at 1057.7 (this took out our weekly stop) and latest price action is trading inside the big red candlestick. A break and close above 1082.8 will get us to enter a long position. Our bias has changed to semi bullish and will wait for a confirmation in the next few days or weeks.

Below are key levels that we will continue to monitor and this will change depending on price action.

Daily Resistance levels:

  • 100 dma at 1141 / 50 at 1122 and 20 at 1091

Daily Support levels:

  • Lower BB line at 1057.7

The selling continues here and we are aware that price may soon need to retrace for a MA reconnect. Without a clear signal that the selling has abated and no divergence on the RSI, then sellers will continue to drive this market lower. However, we are monitoring the daily price action which is trading with an inside day and could long Palladium at 708.20 to play the corrective rally. Bearing in mind that it has been a sellers’ market and its RSI has reached extreme oversold territory – so a retracement is overdue.  However, a break below 690.2 will see more selling pressure and target the 660 levels.

Below are key levels that we will continue to monitor and this will change depending on price action.

Daily Resistance levels:

  • 200 dma at 779 / 100 at 771 / 20 at 738 / 50 at 762

Daily Support levels:

  • 690.2

Inter Market Analysis – 25th June

Equity

World markets (as of the time of publishing)

Shanghai 4,527.78 -162.37 (-3.46%)
S&P 500 2,108.58 -15.62 (-0.74%)
Nikkei 225 20,771.40 -96.63 (-0.46%)
Hang Seng Index 27,145.75 -259.22 (-0.95%)
TSEC 9,476.34 +79.03 (0.84%)
EURO STOXX 50 3,607.72 -3.23 (-0.09%)
CAC 40 5,032.64 -12.71 (-0.25%)
S&P TSX 14,947.51 +42.60 (0.29%)
S&P/ASX 200 5,632.70 -54.10 (-0.95%)
BSE Sensex 27,866.65 +136.98 (0.49%)
TA25 1,673.62 -8.70 (-0.52%)
SMI 9,068.26 -13.55 (-0.15%)
ATX 2,513.61 +0.78 (0.03%)
IBOVESPA 53,842.54 +70.11 (0.13%)
SET 1,519.46 +1.20 (0.08%)
BIST100 83,894.27 -246.38 (-0.29%)
IBEX 11,323.20 +1.30 (0.01%)
WIG 54,320.87 +206.50 (0.38%)
TASI 9,312.48 -0.57 (-0.01%)
MERVAL 10,009.99 -72.41 (-0.72%)

Risk On

  • China increase stimulus roughly o 6.6 trillion yuan – PBOC inject liquidity

Risk Off

  • Greece remain defiant – deadline given for today – has until 30th June
  • Mixed Asian equties – HK shares fall on Greece Fear – China Slide – Nikkei of breaking yesterday ATH
  • GFK German consumer lower than previous but come in as expected
  • BUBA concerned continued ELA for Greece
  • Ongoing escalation in Middle East (ISIS and Syria)
  • H & M profit hit by stronger Dollar
  • Cameron to renegotiate EU treaty – Brexit?

Outlook: All European stocks are trading an inside day (breakout today?). Note that Asian equities are lower and mixed, probably profit taking ahead of Greece imminent deal? All priced in for a deal? What happened post Greece? Mind you GAPs need to be filled.

Biased: If a deal is clinched than we see a victory lap on EZ equities – overall stance is to sell in euphoric rallies

Currencies

  • MOF Watanabe said sees the US unlikely to strengthen further if Fed raises rates one or twice (Asia market see dollar sell off)
  • SNB Jordan say Franc still too strong
  • Dollar on the back foot – will Europe open follow through?
  • Dollar may remain supported with the Greece debacle
  • A higher low in commodities currencies AUS/USD
  • FOMC Tarullo and Powell to speak

Outlook: Dollar on the back foot but the IHS could still be in play

Biased: Higher dollar as long as there is no Deal. Deal done then depends on Dollar sell-off which may make or break the index technically. Neutral

Bonds

  • Sell off on the open (should be Euro supportive)

Outlook: Bunds to move lower given EUR/USD set to break higher (have to wait till Dollar strength pass)

Biased: Bunds sell off post Greece due to market Euphoria (Risk On)

Commodities

  • Crude Oil Inventories lower than expected
  • Copper trying to find support?
  • Ongoing escalation in Middle East (ISIS and Syria)
  • Precious metals on the back foot if equities rose (lack of market interest)

Outlook: Dollar makes or breaks here-but in general commodities are weak.

Biased: Downside pressure continues

Watchlists 

USD index

IHS is still in play unless it trade out of the symmetrical triangle

German Bund

Hit resistance and could resume lower despite bullish RSI divergence

Copper

Inside a downtrend channel but may find support at 2548