Gold – FX- Dow – 27 September 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 27 September: 1497 (1515)

Gold/USD LT-M MT-W ST-D
Trend ↑ (↑) ↓ (↓) ↓ (↑)
% Risk
Weight
87 (88) 73 (81) 45 (25)
Allocation 100% (100%)
Gold took a small dive again last week due to hard nosed dollar strength which did come somewhat unexpected. The LT-M is stil narrowly up whilst the shorter term time frames are in down trends now. Short term benefit may be achieved from a higher risk quick trade out and in, but there is a wider issue here. The choice of asset classes is limited due to the many balloon type conditions and the investment cushion is significant without yet having seen clear LT and MT bearish risk weight divergence. As a result we stay with our fully invested Long Gold portfolio.

Last week: LT Monthly and MT Weekly technically look like they need an extension into an overbought MT situation. This could develop with and without price movement of course and with a bullish diverging ST Daily vs Weekly and Monthly the risk of staying fully invested is small. 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 27 September: 1367 (1375)

Gold/EUR LT-M MT-W ST-D
Trend ↑ (↑) ↓ (↓) ↓ (↑)
% Risk
Weight
92 (93) 77 (87) 65 (27)
Allocation 100% (100% 24/9)
Early last week we re-entered into af fully invested Gold vs Euro position. The dollar rally that caused the retracement again came somewhat unexpected. The LT Monthly risk weight is still trending up without clear direction from MT and ST time frames , albeit down at the week's close. Price cushion and fewer investment alternatives make this risk acceptable. If the market turns lower for an extended period the ST and MT trend are more likely to diverge vis a vis LT if that happens during October. No Change.

Last week: Interim update Tuesday 24 Sept 2019 Gold Euro: With hourly risk weight getting oversold and Daily in an uptrend expecting a bearish divergence in the Medium Term Weekly timeframe is risk on. So are now fully invested again awaiting a strong rally in the Medium Term.

Close 20 Sept: The steady acceleration at the end of the past week is positive even though risk is still downward in the MT Weekly time frame. We are looking to enter to fully invested but timing requires a low risk approach. Right now the Hourly risk weight at 90% needs to get into oversold weight level to consider a purchase. This may happen already Monday or Tuesday.
If this happens we will do an interim update. No Change for now


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 27 September: 1215 (1215)

Gold/GBP LT-M MT-W ST-D
Trend ↓ (↓) ↓ (↓) ↑ (↑)
% Risk
Weight
91 (93) 67 (72) 57 (15)
Allocation 100% (100% 24/9)
The picture for Gold/GBP is similar even though the LT Monthly has turned marginally down with one more trading day in September. The current risk status has wider impact than the pure technical % risk weight levels. MACD does look a little heavy but Stochastic, MACD and Relative relative strength index still need to show bearish divergence before this longer term trend can be called to a MT or temporary finish. The one year stretch of the present price rally, the price cushion and the absence of bearish divergence in the MT time frame as well as the limited asset class choice based on pure risk, we are happy to stay with a fully invested position.

Last week: Interim update Tuesday 24 Sept 2019 Gold vs Pound Sterling: With hourly risk weight getting into oversold condition and Daily in an uptrend expecting a bearish divergence in the Medium Term Weekly timeframe is a risk on situation. So are now fully invested again awaiting a stronger rally in the Medium Term.

Close 20 Sept: Gold/GBP offers a very similar risk picture as Gold/EURO including an Hourly overbought weight level waiting to come into balance with the ST Daily. If that happens early in the week we would seek to become fully invested again and we will interim update if that materializes. No Change for now


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 27 September: 17.51 (17.96)

Silver/USD LT-M MT-W ST-D
Trend ↑ (↑) ↓ (↓) ↓ (↓)
% Risk
Weight
68 (70) 62 (67) 36 (17)
Allocation 100% (100%)
Another volatile week starting at 18.00, up to 18.74 and ending near the lows at 17.50. MT risk to stay fully invested remains low with a still comfortable Monthly risk weight uptrend in progress in well below overbought territory. No Change.

Last week: Silver USD may need to build a bit more energy to begin a fresh upmove. The St and MT risk weight are in a position to turn back Up. We are confident to stay fully invested in Silver. No Change.


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 27 September: 16.00 (16.30)

Silver/EUR LT-M MT-W ST-D
Trend ↑ (↑) ↓ (↓) ↓ (N)
% Risk
Weight
78 (77) 65 (70) 45 (20)
Allocation 100% (100%)
Same picture. Up on Monday and down rest of the week ending at 16.00. A poor week which may have a little further to go yet. The LT uptrend however is the leading indicator. We have not yet seen a risk weight level in overbought territory like the end of Silver price rallies in 2005, 2007 and 2011. Equilibrium in the Gold Silver ratio will probably require a Silver/Euro price of nearer 32.00 or about 36.00 vs US Dollar. A long, 'doubling price' way to go yet. No Change.

Last week: Risk weight development and trends in a Short Term, Medium Term and Long Term time frames are very similar for Silver/EURO. 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 27 September: 14.26 (14.38)

Silver/GBP LT-M MT-W ST-D
Trend ↑ (↑) ↑ (↓) ↑ (↓)
% Risk
Weight
79 (80) 58 (65) 44 (15)
Allocation 100% (100%)
The exact same argument applies to Silver/British Pound at 14.25 as for Silver/Euro. We are experiencing a fairly volatile MT pause in the LT trend, that started sub 11.00 over a year ago. No Change.

Last week: The Medium Term Weekly is still down but will likely develop bearish divergence upon a new current trend price high. A fresh rally couldf be quick given the 12% price drop in the previous 2 weeks. the Low risk weight position of the Short Term Daily time frame is still in play making the No Change allocation a No Brainer


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 27 September: 85.15 (84.06)

GOLD/SILVER Ratio LT-M MT-W ST-D
Trend ↓ (↓) ↑ (↑) ↑ (↑)
% Risk
Weight
53 (55) 35 (30) 64 (78)
Allocation 50/50 AU/AG (50/50 AU/AG)
the LT Downtrend that started in 3 months ago is in force. Experience tells us that we will need to see bearish divergence in the MT risk weight to possibly call a temporary pause in the Long Term Gold/Silver ratio. The price level where this may occur is likely to show nearer the 2016 bottom at 64.00. A potential large price move yet. No Change.

Last week: Just like Silver is building fresh momentum against the above individial fiat currencies, it is also building new energy against gold. Maybe a few more days and we could witness another attach of the 80.00 ratio level. No Change to maintain a fully or even slightly higher Silver ratio in the Precious metals space


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 27 September: 1.0933 (1.1013)

EUR/USD LT-M MT-W ST-D
Trend ↓ (↑) ↓ (↑) ↓ (↑)
% Risk
Weight
4 (5) 18 (20) 15 (57)
Allocation 100% (100%)
The Euro lost 1% against USDollar last week. The Short Term Daily time frame may start to show bullish divergence versus risk weight in another attempt to push through what is fairly strong support at the 1.0930 level. With all Time frames at near oversold levels it is still bad risk judgement to call for a strong dollar rally, even though the market may still push it to extremes. As we said last week, a more speculative opportunity to go short US dollars may come as the ST Daily trend turns back up from the present 15% level. No Change.

Last week: The Euro is now struggling against the USD for a whole month. At the same time the Long Term Monthly risk weight is ready to turn up from a clear oversold level. No Change to maintain 100% long dollar transaction exposures covered. If we now see the Short Term Daily becoming low risk there will be a LT opportunity to take a speculative short dollar position against the Euro and any other major currency.


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 27 September: 0.9902 (0.9900)

USD/CHF LT-M MT-W ST-D
Trend ↑ (↑) ↑ (↑) ↑ (↓)
% Risk
Weight
51 (50) 66 (60) 50 (77)
Allocation 100% (100%)
A relatively strong performance of the CHF versus all currencies last week. The SFR even performed as well as the US dollar which may be the result of a large sovereign transaction being executed during the week. All time frames show a weakish uptrend but at mid range levels. Fresh long dollar exposure could be kept until the ST Daily turns back down again or covered a little above par. No Change otherwise.

Last week: Our analysis of last week expecting a slightly weaker CHF is still the dominant technical picture. If the Weekly time frame starts turning down as a result of a more rapid slide of the US Dollar, the Long Term Monthly may also turn back down again. In our view it be a matter of time before the USD makes a first dive into a fresh Long Term downtrend which could last many years as it always has in previous decades. 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 27 September: 1.2277 (1.2472)

GBP/USD (Cable) LT-M MT-W ST-D
Trend ↓ (↑) ↑ (↑) ↓ (↑)
% Risk
Weight
11 (15) 50 (47) 35 (90)
Allocation 100% (100%)
ST Daily trend accelerated downward and will likely find a bottom relatively soon. With strong support at the 1.20 level a fully long dollar position is the best risk scenario as soon as the ST Daily turns back up again from an oversold level. No Change to maintaining a largely covered Short Sterling Long Dollar exposure.

Last week: The Short term Daily risk weight is overbought and turning down. It means Cable is likely to pause it recent uptrend and fresh cover can be delayed until the divergence between Daily and Long Term Monthly is reduced. Cable basic rally confirms the potential Long Term weakness of the Greenback. 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 27 September: 99.13 (98.46)

USD Index LT-M MT-W ST-D
Trend ↑ (↑) ↑ (↑) ↑ (↑)
% Risk
Weight
92 (90) 76 (73) 82 (37)
Allocation 100% (100%)
The Index followed the dollar trend of last week and is reaching Overbought territory in all time frames. Not quite finished Short Term and there is always a chance of reaching a relatively extreme high for the Index, but Risk analysis does not favor an attitude towards betting on a much stronger dollar. No Change therefore.

Last week: For 2 months the USD index has been trying to drive higher alternating up and down weeks. This story is definitely ending and the risk picture looks of course very similar to that of the USD vs other major currencies. No Change to stay with a fully covered long dollar risk


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 27 September: 1.1225 (1.1315)

GBP/EUR LT-M MT-W ST-D
Trend ↑ (↑) ↑ (↑) ↓ (↑)
% Risk
Weight
25 (30) 83 (75) 63 (92)
Allocation 100% (100%)
GBP lost 1.0% ground vs Euro last week which came as expected and a slightly lighter hedge cover could be applied. The LT Monthly looks to turn up in September at a level showing bullish risk weight to price divergence. The best risk position is to remain fully covered on Short Sterlong Long Euro exposures. No Change.

Last week: GBP/Euro has now advanced 7% from the recent August lows. It looks like a longer trend that appears to have been set in motion 6 weeks ago and we would look for a Short Term risk weight to price bearish divergence before allowing a lighter hedge of short Sterling exposure versus Euro. No Change for now.


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 27 September: 8180 (10168)

BITCOIN BTC/USD LT-M MT-W ST-D
Trend ↓ (↓) ↓ (↓) ↓ (↑)
% Risk
Weight
60 (65) 28 (37) 20 (40)
Allocation 0% (0%)
BTC fell out of bed to the tune of 20% on Monday last week and then remained at that level throughout the week. The ST Daily is getting oversold but will more likely show bullish divergence first at a lower price level before price turns up. This manipulated market is too volatile still to participate for serious risk aware investors. Very high volatility does not make this cryptocurrency a real asset class yet, in spite of what many seem to want to promote.

Last week: This high spec bitcoin seems to have lost some market interest of late with much lower price volatility in a much narrower price range. As always we stay out of this market until it matures into a higher liquid less manipulative commodity

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 27 September: 26820 (26935)

US30 (Dow Jones) LT-M MT-W ST-D
Trend ↑ (↑) ↑ (↑) ↓ (↓)
% Risk
Weight
84 (85) 80 (77) 38 (80)
Allocation 0% (0%)
MT Weekly and LT Monthly look to wish to picture bearish risk-weight to price divergence. Not quite there but from an overbought percentage risk weight, the Dow Jones Index is still in potentially troubled waters. Troubled only in case Longs remain whilst the market follows its logical risk weight trajectory downward. No Change to Stay out (since 12 months)

Last week: We have never before seen a market that has looked to tired for such a very long time and technically we have seen many Long Term and Medium Term bearish divergence signals and the index always recovered to generate a fresh divergence at new highs. For now we have NOT seen a new high in the Dow whilst risk weight remains high. This index remains poor risk as an investment. 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 27 September: 2962 (2992)

Standard & Poor 500 LT-M MT-W ST-D
Trend ↑ (↑) ↓ (↑) ↓ (↓)
% Risk
Weight
87 (87) 83 (83) 40 (85)
Allocation 0% (0%)
S&P turned marginally down in the MT Weekly timeframe. It is possible that the LT Monthly does similar at the close on Monday 30 September. If not both time frames show bearish risk weight to price divergence, so the risk picture is very similar to that of the DJII. Because Daily Short term is in a strong rapid downtrend it is entirely possible that this market seeks to make another high again backed by a low interest rate environment. We will see but risk to be invested is still very high. No Change.

Last week: Logically, as usual, the S&P shows a similar risk picture and this index covering many more companies is actually looking higher risk technically with LT and MT risk weight leaning towards an earlier turn down. The best outlook for fresh investment is one of huge patience and a much much lower price level. Individual promising start ups is another matter of course. No allocation to the Standard and Poor index, hence 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 27 September: 61.99 (64.77)

Brent LT-M MT-W ST-D
Trend ↓ (↓) ↑ (↑) ↓ (↑)
% Risk
Weight
33 (35) 41 (42) 28 (50)
Allocation 0% (0%)
We still await the price gap at 60.22 to be filled before deciding a fresh entry into the Brent Oil market. LT-M risk is at a level and range where another upmove could turn the LT into an uptrend again after 4 months as we analysed a few weeks back when we went long. The massive rally following the drone attack has turned this market into a more uncertain risk proposal for the near future. More action is required to favor a Medium term or even Long term asset allocation. No Change for now.

Last week: We have experience a positive influence of drones on our 50% investment allocation two weeks back. We commented interim on exiting the position with a nice opportunity profit last Monday and we are now looking to possibly re-enter upon a near gap fill in the Daily time frame. Brent would need to drop to very near 60.22 in order to make that happen. History learns that gaps tend to being filled and usually fairly quickly. With that risk in mind we follow this market with great interest

Posted in A - All Financial Blogs | 2020 Forecast.