Metals – FX- Indices – update – close 22 March 2019

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

Gold/USD Month Week Day Hour
Close 22 March: 1313 (1302)
Trend Direction Up (Up) Down (Down) Up (Up) Up
Risk Weight 65-75 (65-75) 60-65 (60-70) 70-85 (35-45) 65
Allocation 100% (100%)

Friday 29 March is month end and sets the LT (monthly) trend currently still Up. A further push up, which is very possible, is more likely to drive the MT (weekly) trend back up. Daily is Up and not finished in the 75% risk range. We stay with this trend until a clear signal to change gets noticed. No change in full allocation.

(If a long term (Monthly) trend turns bullish, which was the case in October 2018, any high risk weight typically generates a serious secondary reaction after risk weight to price divergence in the MT (weekly) timeframe. Without such divergence, the opportunity risk of a large price move in the direction of the LT trend remains highly possible. Similar to the period 2005-2011. This not only applies to Gold/USD but to most, not all, Precious metals vs major currency pairs.In all of these cases we prefer to stay fully invested and not miss the potential opportunity)

Silver/USD Month Week Day Hour
Close 22 March: 15.40 (15.29)
Trend Direction Up (Up) Down (Down) Up (Down) Up
Risk Weight 40-50 (40-50) 50-55 (50-65) 60-75 (30-35) 25-30
Allocation 100% (100%)

Daily trend turned back up with weekly risk leveling out. Stay with full allocation for now. Next weekly and monthly close may give additional risk signals.

(The same applies to Silver which shows stronger potential yet because the LT trend has ways to go. We remain fully allocated)

Gold/EUR Month Week Day Hour
Close 22 March: 1161 (1146)
Trend Direction Up (Up) Up (Down) Up (Up) Down
Risk Weight 85-90 (85-90) 65-70 (65-75) 65-80 (65-80) 80-85
Allocation 100% (100%)

Price currently travels in a relatively sharp uptrend channel with support around 1145.
The weekly turned up which is supported by a daily uptrend. This means a more agressive advance is possible. We stay with this higher risk Long term uptrend and no allocation change.

(The same applies to Gold/EUR. Similar technical properties emerged in the period 2005-2011 and still being some 10% above the lows from September last year supports staying fully invested.
LT trend Monthly turned back up last week. This is intra-month and only a month-end trend change determines the final call which can often be pre-empted via the Weekly and Daily risk weight levels. Price recovered 50% of the recent decline and present divergence between Daily and Weekly/Monthly favours a no change full allocation)

Silver/EUR Month Week Day Hour
Close 22 March: 13.62 (13.50)
Trend Direction Up (Up) Down (Down) Up (Down) Down
Risk Weight 55-65 (55-60) 55-60 (55-65) 55-70 (30-35) 25-35
Allocation 100% (100%)

No change. A widening Daily risk turning Up, a narrowing Weekly risk and widening Monthly implies the trend Up is not finished and can still advance rapidly. Price still hovers around 13% above lastb year's lows and well above the technical entry level.

(Same opportunity in play as Gold/USD. No change)

Gold/GBP Month Week Day Hour
Close 22 March: 994 (980)
Trend Direction Down (Down) Down (Down) Up (Down) Up
Risk Weight 70-80 (65-75) 30-40 (30-50) 65-75 (20-25) 10-15
Allocation 100% (100%)

The 1.5% price rise last week developed more weight onto remaining with the trend which is entirely driven by the short term trend as well as a narrowing Weekly risk weight. Even though the monthly turned down this month we have another week to get confirmation of that trend change. Until then we stay with the position but on higher alert.

(This week, price weakness without clear divergence indicating a possible change of LT trend rather supports staying with a fully allocated position. Risk only arises nearer the entry level around 925)

Silver/GBP Month Week Day Hour
Close 22 March: 11.68 (11.50)
Trend Direction Up (Down) Down (Down) Up (Down) Up
Risk Weight 50-55 (45-55) 25-35 (30-50) 55-70 (10-25) 10-15
Allocation 100% (100%)

The 4 time frames went from 4 Down to 3 Up. Narrowing Weekly risk at lower weight and undecided mid risk Long term calls for keeping options open. Staying with the 100% allocation at this moment is the call this week. This technical call really stands aside from the political turmoil in GB.

(All time frames are in down trend, but rather in lower risk weight territory meaning trends can easily change. LT trend only validates end of month. A bit more silver price weakness is possible but we will again hold the position given relative risk weight support)

GOLD/SILVER Ratio Month Week Day Hour
Close 22 March: 84.85 (85.15)
Trend Direction Up (Up) Up (Up) Down (Up) Down
Risk Weight 70-75 (70-80) 70-85 (65-80) 45-55 (85-90) 60-70
Allocation 50% AG (50% AG)

One week before this Q1-end price still hovers near the highs showing indecisiveness. Yet the LT weight at higher risk indicate this near maximum divergence from equilibrium. The latter is a technical fact that cannot be ignored. It may take much more time or we could experience a surprise market action as a result of some major event. No change.

(Risk weight supports staying with a 50/50 Gold/Silver allocation. THE SILVER price navigates so far outside of equilibrium that a fair allocation to silver in the precious metals space is justified)


EUR/USD Month Week Day Hour
Close 22 March: 1.1295 (1.1325)
Trend Direction Down (Down) Down (Up) Down (Up) Up
Risk Weight 10-15 (10-15) 25-30 (25-30) 65-75 (50-60) 15-25
Allocation 100% (100% hedge)

Dollar gained a bit last week but the LT risk weight, plus the fact that Daily and Hourly Risk weight turn into rapid Dollar resistance on each short term Dollar rally. We've seen a narrow mildly downsloping trading range whilst LT Risk weight remains low without making new lows. No change.

(No change. Dollar long exposures to remain fully hedged

USD/CHF Month Week Day Hour
Close 22 March: 0.9925 (1.0025)
Trend Direction Up (Up) Down (Up) Down (Up) Down
Risk Weight 75-80 (80-85) 70-75 (75-80) 10-20 (50-65) 30-40
Allocation 100% unch

Divergence between Daily and Weekly(Monthly) will likely trigger a short term rally next week. Once that is out of the way the LT trend and risk weight determine. At this moment the technical call is to keep long dollar exposures fully hedged.

(No change, Dollar longs to remain fully hedged)

GBP/USD (Cable) Month Week Day Hour
Close 22 March: 1.3195 (1.3275)
Trend Direction Up (Up) Up (Up) Down (Down) Down
Risk Weight 30-40 (30-45) 75-80 (75-80) 50-60 (65-75) 80-85
Allocation 100% (100%)

A relatively hectic trading week within a 2% range mainly due to political pressures in GB. GBP is surprisingly resilient which technically indicates support in the this market. We stay with the LT trend which is up and short cable exposures to be fully hedged.

(Sterling advanced a little more strongly vs USD last week. Being fully covered was the correct call. ST divergence may cause a slight price pause again during the coming week, but we recommend staying fully covered on long dollar exposures)

GBP/EUR Month Week Day Hour
Close 22 March: 1.1680 (1.1735)
Trend Direction Up (Up) Up (Up) Down (Up) Down
Risk Weight 65-85 (65-85) 80-85 (80-85) 35-40 (65-75) 75-85
Allocation 75% (75%)

A slightly weaker GBP last week may drive divergence between ST and MT(LT) giving later support for GBP. This pair is still not conclusive. No change therefore.

(Both trend and risk weight are putting us on alert. We stay with 75% short sterling exposures hedged, but this percentage may need to be lowered if LT and MT trends turn negative)

BITCOIN BTC/USD Month Week Day Hour
Close 22 March: 3987 (3923)
Trend Direction Up (Up) Up (Up) Down (Up) Up
Risk Weight 0-10 (0-10) 65-75 (45-70) 75-80 (70-80) 60-75
Allocation 0% (0%)

The major concern with BTC price development, besides clear manipulation, is that we've only seen a 800 dollar price range since December whilst MT risk is steadily moving up. Technically this indicates very high risk given the massive price ranges we've experienced last year as a whole. It tells us there is a very high risk for this market to fall out of bed and bounce somewhere well below 1000 some time in the future. Time will tell. Stay out!

(This market remains very high risk. A price level under USD 5000 developing very potential bearish divergence between Shorter Term and Longer Term time frames could easily develop that expected next major down leg)

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, Dollar Index, Brent crude oil
US30 Month Week Day Hour
Close 22 March: 25502 (25848)
Trend Direction Up (Up) Down (Down) Down (Up) Down
Risk Weight 60-75 (60-75) 85-90 (90-95) 50-60 (45-55) 15-20
Allocation 0% (0%)

From a pure technical risk point of view there is no change. Technicals also seem to better support some of the analysts views calling for a weaker economy. Traders anticipate Q4 with helicopter money driving the market higher again. A truly high risk strategy.

(We recognize the recent opportunity loss as Indices have shown strength almost everywhere, but the picture is different today than it was in September of last year. Thge higher risk is that this rally is indeed a countertrend rally and must therefore be treated with caution. We will not recommend participation in this Index)

Standard & Poor 500 Month Week Day Hour
Close 22 March: 2800 (2822)
Trend Direction Up (Up) Down (Up) Down (Up) Down
Risk Weight 55-75 (60-70) 90-95 (90-95) 75-85 (80-95) 10-20
Allocation 0% (0%)

This market has NOT bottomed. It has generally been above risk weight equilibrium since 2011. Monetary financing driving company repo's has been the name of the game for the past 5 years. A little different technical numbers on Trend and Risk weight vs INDU, but this market should be avoided.

(Time frames trend are up, but risk weight should put investors on high alert again. Same comment as for DJII)

USD Index Month Week Day Hour
Close 22 March: 96.50 (96.50)
Trend Direction Down (Down) Up (Up) Down (Down) Down
Risk Weight 80-85 (80-85) 60-65 (60-65) 40-50 (40-50) 5-20
Allocation 100% (100%)

The USD is holding its own. It has been trading in a relatively tight 2% range since the middle of 2018. The fact that LT risk weight is currently as high as the higher Index peak of 103 in Jan 2017, but a price of 96.50, is reason to expect Dollar weakness ahead.

Whilst all times frames show a positive price-trend for the USD. Problem is that this trend is not supported by a significant price move. We have seen these 1% moves back and forth for quite a while with Risk weight remaining relatively high in ST, MT and LT. Long dollar exposures to remain fully hedged.

(Mixed picture with LT down trend and high risk weight prevailing. We stay with fully covered long dollar positions)

Brent Month Week Day Hour
Close 22 March: 67.08 (67.00)
Trend Direction Up (Up) Up (Up) Down (Up) Up
Risk Weight 25-40 (25-40) 90-95 (85-90) 80-90 (75-85) 45-55
Allocation 0% (0%)

No change from last week and the technical picture would call for a short position as Daily Risk tom,price shows divergence turning down with rather extreme high risk Weekly MT risk weight. Since we do not short asset classes to avoid higher speculative risk we stay out. We do not normally like to give price objectives as they hardly ever meet expectations, even from the best chartists on earth, however,right now the risk of price halving seems much much higher than doubling.

(Crude appears to to be running into heavy resistance at current levels. We still see this price action as countertrend and expect renewed weakness before a more sustained rally develops. How far that will be into the future is yet to be determined. No entry into this market for the time being)

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