Metals – FX- Indices – update – 14 Oct 2018

Precious Metals: Gold & Silver vs US Dollar, Euro, GBP, Ratio

Gold / USD

All time frames support a confirmation of trend change at last weeks close. The allocation based on risk weight is increased from 60 to 80%.

Gold/USD Month Week Day Hour
Oct 12 close 1221
(1202)
Trend Direction Up (N) Up (Up) Up (Up) Down
Risk Weight 20 (15-20) 30-40 (25-35) 55-70 (60-65) 20-30
Allocation 80% (60%)

Silver / USD

Last week’s Daily closed into an uptrend following the weekly. Although this market is not yet confirmed in monthly time frame with silver losing some weight vs Gold again we increase allocation to 30%.

Silver/USD Month Week Day Hour
Oct 12 close 14.54
(14.60)
Trend Direction Down (Down) Up (Up) Up (Down) Down
Risk Weight 10-20 (10-20) 20-30 (10-20) 35-40 (65-70) 20-35
Allocation 30% (20%)

Gold / EUR

Solid upward risk with last week's acceleration/pause and renewed uptrend in Daily. No change in allocation.

Gold/EUR Month Week Day Hour
Oct 12 close 1044
(1038)
Trend Direction Up (Up) Up (Up) Up (Up) Down
Risk Weight 5-10 (5-10) 15-30 (5-15) 70-75 (85-90) 25-40
Allocation 75% (75%)

Silver / EUR

Silver vs Euro appears to be finishing a downtrend soon. Risk picture positive but not fully confirmed No change in allocation.

Silver/EUR Month Week Day Hour
Oct 12 close 12.58
(12.66)
Trend Direction Down (Down) Up (Up) Up (Down) Down
Risk Weight 10-20 (10-20) 20-30 (10-20) 50-55  (70-80) 35-45
Allocation 25% (20%)

Gold / GBP

Monthly frame at last week's close shows trend change and may now confirm the higher allocation since two weeks. No change in allocation due to low risk Weekly and Daily trend.

Gold/GBP Month Week Day Hour
Oct 12 close 925
(916)
Trend Direction Up (N) Up (Up) Up (Down) Down
Risk Weight 10-15 (5-10) 20-30 (10-20) 35-60 (65-75) 70-80
Allocation 70% (70%)

Silver / GBP

Daily upturn supports a lower risk scenario. Continuation is likely and will turn the monthly up as well. We increase allocation to 50% (Sideways price expected due to short term turning towards LT low risk. No change in allocation)

Silver/GBP Month Week Day Hour
Oct 12 close 11.04
(11.12)
Trend Direction  (Down)  (Up) Up (Down) Down
Risk Weight 10-15 (10-15) 20-25 (20-25) 25-30 (60-70) 50-60
Allocation 50% (40%)

Gold / Silver Ratio

Ratio turned up quite aggressively last week with low risk daily diverging from weekly and monthly time frames. Risk weight not clear yet and we remain flat. One should not yet be tempted to short this ratio. Two weeks ago the ratio at this level did look higher risk than at last week's close. (Ratio shows undecided. Returning to Flat allocation looking for firm direction)
All time high: 1941 = 97, 1991 = 90

AU/AG Ratio Month Week Day Hour
Oct 12 close 83.08
(81.95)
Trend Direction Up (Up) Down (Down) Up (Up) Down
Risk Weight 65-75 (60-70) 60-65 (60-75) 65-75 (20-30) 15-30
Allocation Flat

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

Euro / USD

Direction and risk weight indicates the USD is slowly losing momentum, but may still try to push a bit higher. No change in hedge allocation. (A more rapid USD advance last week calls for caution. We reduce our hedge to 40% from 70%)

EUR/USD Month Week Day Hour
Oct 12 close 1.1548
(1.1525)
Trend Direction Down (Down) Down (Down) Up (N) Down
Risk Weight 20-30 (25-30) 50-60 (60-65) 30-35 (10-15) 30-35
Allocation 40% hedge
(40% hedge)

British Pound / USD

Short term risk and volatility should see the pound strengthen a little on Monday but Daily stark risk increase weighs towards more of a sideways picture into next week. Short Pound positions should remained hedged but 70%. (The long term risk increasingly pictures a stronger pound vs USD. Early weakness coming calls for entry to a 70% hedge for Sterling shorts. GBP longs risk is lower)

Cable Month Week Day Hour
Oct 12 close 1.3100
(1.3120)
Trend Direction Down (Down) Up (Up) Up (Up) N
Risk Weight 20-25 (20-25) 55-60 (50-55) 70-80 (15-25) 0-5
Allocation 70% (70%)

USD / Swiss franc

Strong weekly trend with much price change and daily in higher risk territory indicates a neutral outlook short term, hence no change in hedge allocation. Long dollar/CHF hedged at 70%. (No change allocation. Could see bit of initial strength beginning of week then weakness as daily divergence kicks in. Dollar uptick last week bit too quick)

USD/CHF Month Week Day Hour
Oct 12 close 0.9913
(0.9900)
Trend Direction N (N) Up (Up) Down (Down) Up
Risk Weight 70 (70) 40-65 (25-40) 85-90 (90-95) 60-65
Allocation 70% hedge
(70% hedge)

British Pound / Euro

GBP was dumped towards the end of last week. Very short term an advance is the most likely risk . No change in hedge allocation (GBP risk looks it could advance a bit further vs EUR. Hedge allocation for GBP longs reduced from 80% to 50%)

GBP/EUR Month Week Day Hour
Oct 12 close 1.1334
(1.1380)
Trend Direction Up (Down) Up (Up) Down (Up) Down
Risk Weight 50-60 (50) 60-75 (50-65) 70-85 (80-90) 0-10
Allocation 50%
(50%)

Bitcoin / USD

Market turned down last week and appears a bit stronger over the weekend. As long as weekly and monthly remain in down trend direction any shorter term upticks will diverge and resume that LT down trend. (No change from high risk and volatility)
Potential gaps to fill at 5838, 4330 and 2828.
If this market is poised to turn from extremely overbought (Dec 2017) to oversold, it doesn't appear to be finished.

BTC/USD Month Week Day Hour
Oct 12 close 6238
(6615)
Trend Direction Down (Down) Down (N) Up (Up) Up
Risk Weight 20-25 (20-25) 30-35 (30-35) 35-45 (50-60) 60-65
Allocation 0% (0%)

INDEX: US30, S&P500, Dollar Index, Brent crude oil

Dow Jones

Daily appears to diverging from both weekly and monthly time frames. However this picture is different from previous divergences causing an extremely lengthy advance. The narrowing monthly risk weight at 85 looking to follow a down path fairly soon and a stronger weekly downtrend make this market still high risk although we may see a little pause again during the week. (Very high risk market. No change as weekly has turned down)

US30 Month Week Day Hour
Oct 12 close 25339
(26447)
Trend Direction Up (Up) Down (Down) Down (Down) Up
Risk Weight 80-85 (80-90) 70-85 (80-90) 10-20 (70-80) 40-50
Allocation 0% (0%)

Standard & Poor 500

Intra month time frame turned down. Weekly in strong downtrend. Daily divergence may cause the downtrend to pause or reverse temporarily. Risk weight must be on weekly and monthly, hence no allocation change. (0% allocation. Market looks higher risk this week than last with a 2% price slide)

S&P500 Month Week Day Hour
Oct 12 close 2767
(2885)
Trend Direction Down (Up) Down (N) Down (Up) Up
Risk Weight 85-90 (90-95) 65-80 (90-95) 10-15 (45-60) 45-60
Allocation 0% (0%)

Dollar Index

It feels like the dollar uptrend is losing momentum. Risk weight still unsettled with LT trend pointing up. No hedge allocation change. (Although the USD looks toppish vs majors, the index may continue to show relative strength. No change in allocation)

USDIndex Month Week Day Hour
Oct 12 close 95.25
(95.60)
Trend Direction Up (Up) Up (Up) Down (Up) N
Risk Weight 70-80 (70-80) 40-50 (35-40) 60-70 (60-80) 20-30
Allocation 50% (50%)

Crude Oil

Prior to the strong reversal last we signalled a very high risk. Even though ST weight is rapidly decreasing the weekly trend appears high risk although monthly time frame went Neutral at overbought level. No change in 0% alocation to Oil (Further push up this week has only increased the same risk. 0% allocation).

Brent Month Week Day Hour
Oct 12 close 80.43
(84.11)
Trend Direction N (Down) Down (Up) Down (Down) Up
Risk Weight 90 (90-95) 80-85 (85-90) 25-50 (80-85) 55-60
Allocation 0% (0%)

Posted in A - All Financial Blogs | 2020 Forecast.

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