Risk awareness limits short term opportunity

Technicals show increasing risk in most asset classes. Where risk is unacceptably high we remain underinvested or Out. We do not apply an agressive trading position in this weekly update unless the long term technical position demands it.
Gold recorded new all time highs against Scandies Aussie and CAD. The strength built in the PM markets since our virtual 100% allocation, and still led by Palladium, partly sets the parameters for largely holding the current positions.

Gold/USD

LT trend still prevails. Developing divergence between ST Daily and MT Weekly. Prognoses for a week of sideways price range action. No Change in full gold allocation.

(On Wednesday Gold temporarily peaked and diverged on daily risk. This creates a pause in this market and opportunity for a quick short term punt. LT monthly still in comfortable uptrend hence we remain with our original 100% allocation)

Silver/USD

The relatively sharp drop is a deja vu event. We do not change our long position due to developing divergence between Daily and Weekly risk weight.

(So far 2 attempts this year to break this multi year resistance have failed. With Monthly risk still in comfortable low risk uptrend suggests it is a matter of time. When it happens this break could generate a quick turn in favor of silver. No change in allocation)

Gold/EUR

LT Monthly trend turned down on the first trading day. Divergence between Daily and Weekly risk weight is reason to expect decent upward pressure and stay with allocation.

(We have decided to stay fully allocated until Daily Short term price to risk weight shows clear divergence. Price territory still offers much support to stay with the LT uptrend that started on Oct 2018)

Silver/EUR

We expect upward pressure after rapid ST decline with divergence between ST Daily and Weekly. No change in allocation.

(The narrative here is similar to Gold vs Euro. The LT trend up that started in Nov last year prevails and still holds)

Gold/GBP

All time frames are down. Risk weight divergence between MT and ST is no reason not to stay fully allocated.

(The ST picture looks a little weak, but there is no sharp divergence calling an intermediate top. We stay fully allocated (for now))

Silver/GBP

The present reversal technically looks to build another return to price strength.
We stay fully allocated.

(Daily price to risk shows a weak divergence fron a medium risk level. We stay fully allocated)

Gold/Silver Ratio

Silver again lead the weakness of the primary Precious metals this week causing the ratio to advance. Palladium and Platinum showed strong relative performance. Risk weight with exception of MT Weekly remains high and supports staying with a 50/50 ratio allocation.

(Hourly ST could drive the ratio a little higher again, but the MT weekly looks quite tired after 2 months of upward zigzag favoring silver. We stay 50/50 in the ratio.

Comment on Palladium/USD. On a log chart this pair looks rather extended and is in very high risk, speculative, territory. OThe LT Monthly is showing an unusual but also clear price to risk weight divergence. A quick break from this steep slope could drive the price down very rapidly toward the LT median of around 800. A price well above gold has no fundamental justification either as a hard asset or industrial use)

Euro/USD

No Change. Long dollar transaction risk to remain fully covered.

(The technical picture validates a weaker dollar, but the Euro finds it difficult to follow that natural price development due to low interest rate expectations. Further Euro weakness is likely to develop a divergence in the medium term weekly time frame driving fairly strong technical support. Long dollar positions to remain fully hedged)

Dow Jones

Mixed picture with ST and MT vulnerability, i.e downside risk. We stay uninvested until the market shows clear oversold conditions. The opposite is technicaly more evident at this moment.

(We are currently at the level where it became extremely high risk to participate in this index. The present technical picture shows high risk in Medium and Short term time frames.
If we could short we would, but against risk principle of ever being short a major asset class. So we stay out)