Gold – FX – Dow – 15 November 2019

GOLD: Gold vs US Dollar, Euro and GBP

Gold/USD live price, Weekly update risk analysis relative to Long Term Monthly(LT-M), Medium Term Weekly(MT-W), Short Term Daily(ST-D) and Hourly(not shown) data
(Previous week in brackets)

Close 15 November: 1468 (1458)

Gold/USD LT-M MT-W ST-D
Trend ↓ (↓) ↓ (↓) ↑ (↓)
% Risk
Weight
82 (81) 43 (55) 28 (20)
Allocation 100% (100%)

Gold reserves and asset re-allocation for insurance purpose.

Gold bounced from the intra week 1445 low on Tuesday. Clearly seeking direction. We cannot exclude the chance of a further drop although the Medium Term is building towards bullish divergence. The cushion is very comfortable yet strength of equities is turning attention away from holding insurance in favor of short term trading opportunity. NO change.

Last week: The near 4% price drop, which was the every day trend during the past week, is entirely within expectation bounderies and accompanied by a sharp drop in ST risk weight. Technically the price could drop closer to 1400 without losing touch with the primary uptrend that started over a year ago. Because Hourly appears to keep pressure in the very short term, both ST Daily and Weekly are already at a point of divergence vis a vis the LT risk weight, which points towards this market finding strong support. It is the combination of a large LT price cushion and divergence that calls for staying fully invested and as we said last week, this is a good time to allocate a larger percentage of the assets at risk to Gold (and Silver). No change


Gold/EUR live price, Weekly update risk analysis relative to Long Term Monthly(LT-M), Medium Term Weekly(MT-W), Short Term Daily(ST-D) and Hourly(not shown) data
(Previous week in brackets)

Close 15 November: 1328 (1324)

Gold/EUR LT-M MT-W ST-D
Trend ↓ (↓) ↓ (↓) ↑ (↓)
% Risk
Weight
84 (85) 38 (48) 32 (32)
Allocation 100% (100%)
Weekly is also building into bullish divergence vs LT. With cushion in place the increased LT hold is best risk position still. No Change.

Last week: Gold/Euro as one expects shows a very similar technical picture, and also has a USD/Euro element affecting ST Gold Euro price variations. No Change due price cushion and rapidly developing bullish risk weight to price divergence.
Gold vs Euro is still showing longer term downtrend pressure and little price change, but the overall pattern is very much in favor of Gold. Chart behavior indicates Gold may have ended the correction that started early September. Euro denominated asset portfolio's should consider a higher allocation to Gold to increase protection and insurance against price erosion in other asset classes that show high risk-weight. No Change


Gold/GBP live price, Weekly update risk analysis relative to Long Term Monthly(LT-M), Medium Term Weekly(MT-W), Short Term Daily(ST-D) and Hourly(not shown) data
(Previous week in brackets)

Close 15 November: 1137 (1140)

Gold/GBP LT-M MT-W ST-D
Trend ↓ (↓) ↓ (↓) ↑ (↓)
% Risk
Weight
75 (75) 12 (18) 24 (25)
Allocation 100% (100%)
Gold versus GBP may also pause a little while further. No clear risk evidence Although weekly enters low risk bullish turn around area. We hold the position also given strong cushion.

Last week: Sterling looks quite weak versus Gold at this level with bullish price divergence entering in the Daily time frame. Gold/Sterling still sits 25% above the late 2018 market low at 900 and poised to turn back up strongly again and relatively soon given the more deeply oversold risk weight in ST and MT time frames. No Change


SILVER: Silver vs US Dollar, Euro, GBP and Gold/Silver ratio

Silver/USD live price, Weekly update risk analysis relative to Long Term Monthly(LT-M), Medium Term Weekly(MT-W), Short Term Daily(ST-D) and Hourly(not shown) data
(Previous week in brackets)

Close 15 November: 16.90 (16.76)

Silver/USD LT-M MT-W ST-D
Trend ↓ (↓) ↓ (↓) ↑ (↓)
% Risk
Weight
63 (63) 35 (47) 17 (18)
Allocation 100% (100%)
Narrow range last week and holding. Weekly still under pressure but daily providing regular support. Market may show pressure for a while longer and we fell still very comfortable with an enlarged and fully invested allocation.

Last week: Silver as always takes a bigger hit when the market turns down. All that is happening is building massive energy to scream into the sky with rocket speed. We have seen as big drop since August which typically takes out weaker hands. With ST and MT getting into oversold risk weight levels and LT Monthly at a more neutral balanced level we feel comfortable staying fully invested


Silver/EUR live price, Weekly update risk analysis relative to Long Term Monthly(LT-M), Medium Term Weekly(MT-W), Short Term Daily(ST-D) and Hourly(not shown) data
(Previous week in brackets)

Close 15 November: 15.29 (15.23)

Silver/EUR LT-M MT-W ST-D
Trend ↓ (↓) ↓ (↓) ↑ (↓)
% Risk
Weight
68 (68) 35 (45) 16 (22)
Allocation 100% (100%)
This pair shows a fairly neutral risk seeking fresh direction. Although the risk picture favours a flat position or hedge This market can turn either way short term for a longer term move up or a shorter term move down. Hence No Change.

Last week: Silver against Euro shows an identical technical status as ag USD, so again No change


Silver/GBP live price, Weekly update risk analysis relative to Long Term Monthly(LT-M), Medium Term Weekly(MT-W), Short Term Daily(ST-D) and Hourly(not shown) data
(Previous week in brackets)

Close 15 November: 13.08 (13.11)

Silver/GBP LT-M MT-W ST-D
Trend ↓ (↓) ↓ (↓) ↑ (↓)
% Risk
Weight
68 (60) 35 (45) 19 (22)
Allocation 100% (100%)
Silver GBP shows the exact same risk as Silver Euro. Short term pressure still may give rise to uncertainty, yet No Change to staying fully invested.

Last week: Sterling has shown more strength against silver and as a result Silver is more oversold in terms of risk weight. We expect Silver to move up quicker against GBP in coming weeks, i.e GBP weakening relatively more or strengthening less in general against most other financial instruments


Gold/Silver Ratio live price, Weekly update risk analysis relative to Long Term Monthly(LT-M), Medium Term Weekly(MT-W), Short Term Daily(ST-D) and Hourly(not shown) data
(Previous week in brackets)

Close 15 November: 86.33 (86.67)

GOLD/SILVER Ratio LT-M MT-W ST-D
Trend ↑ (↑) ↑ (↑) ↓ (↑)
% Risk
Weight
45 (46) 55 (46) 81 (75)
Allocation 50/50 AU/AG (50/50 AU/AG)
Quite possible that another attempt to discredit Silver is underway, but looks technically difficult to sustain. We are in a corrective phase since the 80 low at the end of August. This is a long term hold until equilibrium resurfaces closer to the 50-60 level.

Last week: The ratio is not causing any kind of concern at this elevated level. It will seek equilibrium again, as it always has in history, which is more likely to materialize well below the 60 Silver to one Gold level. No Change


FX: EUR/USD, USD/CHF, GBP/USD, USD Index, GBP/EUR, Bitcoin

EUR/USD FX live price, Weekly update risk analysis relative to Long Term Monthly(LT-M), Medium Term Weekly(MT-W), Short Term Daily(ST-D) and Hourly(not shown) data
(Previous week in brackets)

Close 15 November: 1.1046 (1.1015)

EUR/USD LT-M MT-W ST-D
Trend ↑ (↑) ↓ (↓) ↑ (↓)
% Risk
Weight
14 (12) 55 (55) 15 (10)
Allocation 100% (100%)
We are bullish on Euro vs USDollar. No change keeping a 100% forward cover on dollar receivables.

Last week: The dollar strengthened across the board all of last week in line with a buoyant US stock market. It appears to take a few more mon ths to tango away from the October low and finally confirm the USD low established in Jan 2017. No change to remain fully risk averse and keeping long dollar exposure covered


USD/CHF FX live price, Weekly update risk analysis relative to Long Term Monthly(LT-M), Medium Term Weekly(MT-W), Short Term Daily(ST-D) and Hourly(not shown) data
(Previous week in brackets)

Close 15 November: 0.9892 (0.9965)

USD/CHF LT-M MT-W ST-D
Trend ↓ (↓) ↑ (↑) ↑ (↑)
% Risk
Weight
51 (54) 64 (66) 75 (75)
Allocation 100% (100%)
More range trading is currently evident, but Long term picture looks bearish for dollars with short term temporary surprises still possible. We prefer stay fully hedged on dollar receivables.

Last week: Dollar strength rather adds to risk awareness and this market eventually turning south again after holding a historically narrow range for 4 years. No Change


Cable GBP/USD FX live price, Weekly update risk analysis relative to Long Term Monthly(LT-M), Medium Term Weekly(MT-W), Short Term Daily(ST-D) and Hourly(not shown) data
(Previous week in brackets)

Close 15 November: 1.2900 (1.2760)

GBP/USD (Cable) LT-M MT-W ST-D
Trend ↑ (↑) ↓ (↓) ↑ (↓)
% Risk
Weight
42 (40) 85 (84) 50 (25)
Allocation 100% (100%)
Long term pressure still up. No Change.

Last week: Bullish risk weight divergence emerging between Short Term Daily and Medium Term Weekly is a call for a weaker USD again versus Sterling, hence no Change in keeping Dollar receivables covered forward


USdollar Index Weekly update risk analysis relative to Long Term Monthly(LT-M), Medium Term Weekly(MT-W), Short Term Daily(ST-D) and Hourly(not shown) data
(Previous week in brackets)

Close 15 November: 98.00 (98.40)

USD Index LT-M MT-W ST-D
Trend ↓ (↓) ↑ (↑) ↓ (↑)
% Risk
Weight
80 (82) 28 (28) 82 (90)
Allocation 100% (100%)
Daily is bearish, Weekly more neutral pointing up and Monthly bearish. This picture is negative for USD. No Change.

Last week: The one percent rally of the Dollar Index last week is NOT a change of trend. Quitre bthe opposite with ST risk weight rather overbought and showing bearish divergence versus MT. We can easily find many reasons for a temporary strong dollar, but the Greenback simply does not look strong at all technically. No Change.


GBP/EUR FX live price, Weekly update risk analysis relative to Long Term Monthly(LT-M), Medium Term Weekly(MT-W), Short Term Daily(ST-D) and Hourly(not shown) data
(Previous week in brackets)

Close 15 November: 1.1663 (1.1588)

GBP/EUR LT-M MT-W ST-D
Trend ↑ (↑) ↑ (↑) ↓ (↓)
% Risk
Weight
61 (60) 92 (90) 87 (60)
Allocation 50% (60%)
No Change from last week. Rather the technical picture shows a bit more vulnerability for GBP even as ST and MT show higher nominal overbought risk weight levels. As a result we reduce our hedge to a neutral 50%.

Last week: Sterling is holding its own but looks potentially vulnerable in MT and LT time frames. So, we happily stay with a smaller forward cover of Sterling payables


BTC Bitcoin Price, Weekly update risk analysis relative to Long Term Monthly(LT-M), Medium Term Weekly(MT-W), Short Term Daily(ST-D) and Hourly(not shown) data
(Previous week in brackets)

Close 15 November: 8491 (8773)

BITCOIN BTC/USD LT-M MT-W ST-D
Trend ↓ (↓) ↓ (↑) ↓ (↓)
% Risk
Weight
52 (52) 34 (33) 12 (18)
Allocation 0% (0%)
ST oversold whilst still risk weight pressure in MT and LT time frames present. Speculator market only. No Change.

Last week: The Bitcoin price picture is developing for a more volatile MT term price range. Long term support is at 4350 with a mild LT up-slope. If that breaks, the 2018 low is support and likely to give way. If 4350 does not break we may find ourselves in a new era of financial reality and position ourselves accordingly with minimum risk. No change

Remaining 'opening up' gap still to fill at 2828. We exclude weekend action to determine opening gaps as major players are not participating in size.
If this market is poised to turn from extremely overbought (Dec 2017) to completely oversold, it doesn't appear to be finished.


INDEX: US30, S&P500, Brent crude oil

Dow Jones Weekly update risk analysis relative to Long Term Monthly(LT-M), Medium Term Weekly(MT-W), Short Term Daily(ST-D) and Hourly(not shown) data
(Previous week in brackets)

Close 15 November: 28005 (27681)

US30 (Dow Jones) LT-M MT-W ST-D
Trend ↑ (↑) ↑ (↑) ↑ (↓)
% Risk
Weight
92 (91) 94 (87) 96 (93)
Allocation 0% (0%)
We've been cornered, yet risk weight across time frames is simply too high to ignore, Until this changes, we cannot propose participating in this market. High risk weight is known to be potentially very bad risk and markets, on balance, do not defy gravity for a long time. Now that US equities do we fear a bad outcome. No Change.

Last week: Dow is very high risk and is obviously again defying gravity. The economy is great, money is dirt cheap, so nothing can happen to us. From a risk weight perspective we cannot re-position anywhere close to even a minor long position. It is bad risk and equity investment only works for individual powerhouse stocks and great startups. Index wise it is a no go unless you wish to speculate very short term and accept the chance of being whipsawed, which is a more typical outcome for most traders at certain points, like now, in a sequence of trend seasons


S&P 500 Weekly update risk analysis relative to Long Term Monthly(LT-M), Medium Term Weekly(MT-W), Short Term Daily(ST-D) and Hourly(not shown) data
(Previous week in brackets)

Close 15 November: 3120 (3093)

Standard & Poor 500 LT-M MT-W ST-D
Trend ↑ (↑) ↑ (↑) ↑ (↑)
% Risk
Weight
93 (92) 98 (95) 94 (92)
Allocation 0% (0%)
Same as INDU. We've been cornered against normal risk weight odds and fear a market that will loose its bids once a more serious and expected correction develops. No Change.

Last week: All time frames are overbought and diverging in their own time frame. This simply is a very high risk market technically and from past experience this unprecedented development can only be a matter of sovereign manipulation which we know is a fact. It just appears to go on and on for so much longer than many of us would have expected. Yet is does not change the inherent risk image. Else just the same as Dow Jones. Stay away


Brent Crude oil Weekly update risk analysis relative to Long Term Monthly(LT-M), Medium Term Weekly(MT-W), Short Term Daily(ST-D) and Hourly(not shown) data
(Previous week in brackets)

Close 15 November: 63.45 (61.55)

Brent LT-M MT-W ST-D
Trend ↑ (↑) ↑ (↑) ↑ (↓)
% Risk
Weight
29 (28) 39 (35) 77 (78)
Allocation 0% (0%)
Brent is OK for ST trading. Traders clearly and understandably see a positive risk weight and so do we. The problem is that we have seen quick reversals making the Long term risk weight change in mid month a higher risk. It means we would not take a position unless Nov 30 confirms a new LT trend. We'd be seeking take a small 30% position if the price reacts back to 62.50 with a stop at a close below 61.50.
Subject to mid week change. No change for now.

Last week: Price range was fairly narrow last week ending unchanged. The inverse flag formation since Late September can fall both ways. The long term can resume down if market turns weaker or a few dollar price increase can create bearish divergence of ST versus LT. The picture isn't clear and thus a low risk trade cannot be made at this stage

Posted in A - All Financial Blogs | 2020 Forecast.