Gold – FX – Dow – 22 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 22 November: 1462 (1468)

Gold/USD LT-M MT-W ST-D
Trend ↓ (↓) ↓ (↓) ↓ (↑)
% Risk
Weight
82 (82) 25 (43) 33 (28)
Allocation 100% (100%)

Gold reserves and asset re-allocation for insurance purpose.

The entire scenario as indicated in all time frames points towards a bottom of gold well above the start of the trend we entered back in Q4 2018. We stay fully invested and with a slightly higher overall recent allocation to total assets.

Last week: 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


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 22 November: 1326 (1328)

Gold/EUR LT-M MT-W ST-D
Trend ↓ (↓) ↓ (↓) ↓ (↑)
% Risk
Weight
85 (84) 25 (38) 34 (32)
Allocation 100% (100%)
Just like Gold vs USD, this pair looks as strong technically. The downtrend may not yet be finished as MT trend is still down. We would expect an interim bottom to develop before Christmas well above last year's low. No Change.

Last week: Weekly is also building into bullish divergence vs LT. With cushion in place the increased LT hold is best risk position still. 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 22 November: 1139 (1137)

Gold/GBP LT-M MT-W ST-D
Trend ↓ (↓) ↓ (↓) ↓ (↑)
% Risk
Weight
75 (75) 8 (12) 31 (24)
Allocation 100% (100%)
GBP now looks the weakest of the major currencies after a massive run up during Brexshit politics in Q2 and Q3 2019. It means Gold looks even stronger and GBP tax subjects should really consider enlarging their Gold portfolio cash permitting. No Change.

Last week: 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


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 22 November: 16.90 (16.90)

Silver/USD LT-M MT-W ST-D
Trend ↓ (↓) ↓ (↓) ↓ (↑)
% Risk
Weight
65 (63) 20 (35) 29 (17)
Allocation 100% (100%)
Silver actually showed relative strength the past week even though vs USDollar this metal seems to still suffer from long term drowsiness, which is why the market does not trust what will eventually become very evident. A very strong performance is statistically guaranteed. We just don't know when it will finally materialize. The technical picture is very much the same as for Gold this week. No Change.

Last week: 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


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 22 November: 15.39 (15.29)

Silver/EUR LT-M MT-W ST-D
Trend ↓ (↓) ↓ (↓) ↓ (↑)
% Risk
Weight
68 (68) 23 (35) 29 (16)
Allocation 100% (100%)
The Silver EURO story is quite similar and even though price may still weaken a bit, the LT outlook is for a similar bottom to develop with the space of one month. No Change.

Last week: 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


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 22 November: 13.22 (13.08)

Silver/GBP LT-M MT-W ST-D
Trend ↓ (↓) ↓ (↓) ↓ (↑)
% Risk
Weight
61 (68) 8 (35) 29 (19)
Allocation 100% (100%)
Silver vs GBP is the more likely choice for investors. The MT time frame is now rapidly falling into serious oversold ground whilst price has dropped 62% of its last advance rally that started in the low 11 handle. No Change.

Last week: 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


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 22 November: 85.66 (86.33)

GOLD/SILVER Ratio LT-M MT-W ST-D
Trend ↓ (↑) ↑ (↑) ↓ (↓)
% Risk
Weight
45 (45) 65 (55) 65 (81)
Allocation 50/50 AU/AG (50/50 AU/AG)
The Gold Silver ratio closing at 85.65 last week still looks for a definitive change of heart. Lack of Silver liquidity may be a reason why the ratio suffers from offloading old positions, probably at a loss. The major opportunity is to hold on to silver and wait for at least a 60 ratio before running scared. No Change.

Last week: 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


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 22 November: 1.1017 (1.1046)

EUR/USD LT-M MT-W ST-D
Trend ↑ (↑) ↓ (↓) ↓ (↑)
% Risk
Weight
13 (14) 47 (55) 38 (15)
Allocation 100% (100%)
It has been just 7 weeks since we rallied away from a long expected Dollar peak and only 1% higher. With LT timeframe having turned up in oversold range any ST pressure will likely find quick support. Risk of sustained dollar weakness is still high. No change.

Last week: We are bullish on Euro vs USDollar. No change keeping a 100% forward cover on dollar receivables


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 22 November: 0.9966 (0.9892)

USD/CHF LT-M MT-W ST-D
Trend ↓ (↓) ↑ (↑) ↑ (↑)
% Risk
Weight
54 (51) 72 (64) 60 (75)
Allocation 100% (100%)
For lack of clear direction and a higher risk of dollar weakness we suggest no change to remain fully hedged against dollar receivables.

Last week: 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


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 22 November: 1.2820 (1.2900)

GBP/USD (Cable) LT-M MT-W ST-D
Trend ↑ (↑) ↓ (↓) ↓ (↑)
% Risk
Weight
41 (42) 83 (85) 62 (50)
Allocation 100% (100%)
Even GBP looks relatively weak in the currency space, the LT outlook for USD is in fact higher risk. Hence No change. Except maybe to temporarily delay new cover of dollar receivables. Bit of a Treasury play short term at low risk with ST timeframe looking a bit shakier right now.

Last week: Long term pressure still up. No Change


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 22 November: 98.26 (98.00)

USD Index LT-M MT-W ST-D
Trend ↓ (↓) ↑ (↑) ↑ (↓)
% Risk
Weight
81 (80) 38 (28) 65 (82)
Allocation 100% (100%)
ST and MT risk are doing catchup without much price development. We could see a bit more ST dollar strength but LT risk remains very high and negative. No Change.

Last week: Daily is bearish, Weekly more neutral pointing up and Monthly bearish. This picture is negative for USD. 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 22 November: 1.1630 (1.1663)

GBP/EUR LT-M MT-W ST-D
Trend ↑ (↑) ↓ (↑) ↓ (↓)
% Risk
Weight
61 (61) 92 (92) 61 (87)
Allocation 50% (50%)
We are happy to stay with a 50% cover. GBP for now is holding its own, but we like to see bullish divergence between ST and MT before changing in favour of GBP again. No Change.

Last week: 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%


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 22 November: 7268 (8491)

BITCOIN BTC/USD LT-M MT-W ST-D
Trend ↓ (↓) ↓ (↓) ↑ (↓)
% Risk
Weight
49 (52) 27 (34) 10 (12)
Allocation 0% (0%)
We love the crypto space and anxiously await more listings of lesser controlled assets which are properly backed. In the LT picture we can now draw a support line between the 2016 and 2019 bottoms and resistance between Dec 2017 and June peaks giving current support at just under 5.000 and resistance at 11.000. This market looks vulnerable still and without any clear direction. No Change.

Last week: ST oversold whilst still risk weight pressure in MT and LT time frames present. Speculator market only. 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 22 November: 27875 (28005)

US30 (Dow Jones) LT-M MT-W ST-D
Trend ↑ (↑) ↑ (↑) ↓ (↑)
% Risk
Weight
90 (92) 95 (94) 67 (96)
Allocation 0% (0%)
Every time we see a new high our impression is that we are reaching the peak of the first stage of a rollercoaster event. And we see increasing support for our technical risk approach from VIP hedge fund managers and general analysts. What is going on in the world of finance in general and with the way sovereign debt is managed in particular is nothing short of the label unprecedented. We stay out of this market. Smart cash into startups with amazing creative potential and Real Estate appears where the balance of excess funds still resides. No Change.

Last week: 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


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 22 November: 3110 (3120)

Standard & Poor 500 LT-M MT-W ST-D
Trend ↑ (↑) ↓ (↑) ↓ (↑)
% Risk
Weight
92 (93) 97 (98) 70 (94)
Allocation 0% (0%)
The technical risk of an extra-terrestrial or black swan event can only increase whilst LT timeframes remain extremely lofted. Risk analysis by definition cannot forecast ultimate price development. With extreme log scale price inflation, risk must prevail and remove opportunity in favour of insurance. No Change.

Last week: 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


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 22 November: 63.50 (63.45)

Brent LT-M MT-W ST-D
Trend ↑ (↑) ↑ (↑) ↑ (↑)
% Risk
Weight
29 (29) 42 (39) 75 (77)
Allocation 0% (0%)
We saw a mid week range which would have meant a poor trade if the Hourly had not indicated an oversold condition at the stop level. We await month end to possibly enter a fresh position. Oil still looks very undecided in all time frames. Speculative ST opportunity aside. No position, No change.

Last week: 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

Posted in A - All Financial Blogs | 2020 Forecast.