Gold – FX- Dow – 23 August 2019

GOLD: Gold vs US Dollar, Euro and GBP

Gold/USD Price Live, Weekly risk position analysis relative to Hourly, Daily, Weekly and Monthly data
(Previous week in brackets)

Gold/USD Month Week Day
Close 23 August: 1526 (1511)
Trend Direction Up (Up) Up (Up) Up (Up)
Risk Weight 80-90 (80-90) 90-95 (85-95) 70-75 (80-90)
Allocation 100% (100%)

The gold market shows incredible resilience and finds strong market support in ST time frames nearly every day. Last week's analysis still applies and we stay invested with full allocation.

(Three risk weight time frames are getting to overbought levels and all three are in uptrends. Experience tells us that an uptrend is not finished until it actually is and the overall risk profile still favours a full investment because price may still move substantially further to our advantage whilst the LT trend is still up and whilst we have a cushion to the downside including a 100$ drop. Of course a weekly update may come a few days late or early for position changes, although on balance it won't make much difference in the long term. No change for now)


Gold/EUR Price Live, Weekly risk position analysis based on Hourly, Daily, Weekly and Monthly data

Gold/EUR Month Week Day
Close 23 August: 1360 (1364)
Trend Direction Up (Up) Up (Up) Down (Up)
Risk Weight 85-95 (85-95) 85-95 (85-95) 70-75 (75-80)
Allocation 100% (100%)

Gold came within €10 of the 2012 all time high and now appears toppish due to a US$ peaking. The overall strength however of this strongest major asset class during the past 12 months favours holding the full risk position even through the event of a $70 market reaction. The cushion from entry and returning short term support on every dip is a signal to hold the full allocation.

(Being only 2% away from the all time high this market starts to look a little heavy and may be drawn down earlier in the event of more serious USDollar currency weakness. The price cushion is still attractive enough the stay with the position and a quick downswing may also establish bullish divergence between daily and weekly (weekly shows high potential bearish divergence between higher price tops and lower risk weight tops. This pair looks a little more toppish and we need to be on alert the coming week. No change for now)


Gold/GBP Price Live, Weekly risk position analysis based on Hourly, Daily, Weekly and Monthly data

Gold/GBP Month Week Day
Close 23 August: 1241 (1244)
Trend Direction Up (Up) Down (Up) Down (Down)
Risk Weight 85-95 (85-95) 90-95 (90-95) 55-60 (85-90)
Allocation 60% (60%)

Gold has risen 77% since the 2015 low. The ST Daily risk weight is rapidly moving into Bullish divergence vs Weekly and Monthly. We will likely allocate to 100% if that happens and Daily turns up. For now just on action alert and No change.

(This pair looks even more toppish and may still not be finished. In overall portfolio we have only been at 60% invested (profitably) and will remain so until a new opportunity arises. No change)


SILVER: Silver vs US Dollar, Euro, GBP and Gold/Silver ratio

Silver/USD Price Live, Weekly risk position analysis based on Hourly, Daily, Weekly and Monthly data

Silver/USD Month Week Day
Close 23 August: 17.37 (17.11)
Trend Direction Up (Up) Up (Up) Up (Up)
Risk Weight 45-70 (45-65) 85-90 (80-90) 70-80 (75-85)
Allocation 100% (100%)

A market that appears have found a bottom is most likely to develop bearish divergence in the MT and LT time frames before turning down for a MT reaction if at all. The risk profile therefore is in favor on holding the full allocation.

(Silver went sideways this week after a 3,5% drop from the previous week and subsequent recovery into the low 17's. Still bullish risk outlook LT so No Change)


Silver/EUR Price Live, Weekly risk position analysis based on Hourly, Daily, Weekly and Monthly data

Silver/EUR Month Week Day
Close 23 August: 15.57 (15.42)
Trend Direction Up (Up) Up (Up) Up (Up)
Risk Weight 60-80 (60-75) 85-95 (80-90) 80-85 (80-90)
Allocation 100% (100%)

Risk weight trends across time frames still favours No Change in spite of higher risk in ST and MT weight. The initial objective is the July 2016 high at 18.96.

(Silver/EUR is still in a LT and MT uptrend which are key investment indicators in markets with clear direction. No change for now)


Silver/GBP Price Live, Weekly risk position analysis based on Hourly, Daily, Weekly and Monthly data

Silver/GBP Month Week Day
Close 23 August: 14.12 (14.08)
Trend Direction Up (Up) Down (Down) Down (Down)
Risk Weight 60-80 (60-80) 85-90 (85-90) 60-65 (75-85)
Allocation 100% (100%)

Having broken the 3 year downtrend in June there is clean sky till the July 2016 high at 15.97. The ST down trend is more likely to develop bullish divergence with a strong LT uptrend in play. No change to full allocation.

(Silver/GBP looks to show more sideways and corrective motion with hourly moving down and into bullish divergence within a day or so. The LT uptrend favours No Change)


Gold/Silver Ratio Price Live, Weekly risk position analysis based on Hourly, Daily, Weekly and Monthly data

GOLD/SILVER Ratio Month Week Day
Close 23 August: 87.42 (88.30)
Trend Direction Down (Down) Down (Up) Down (Down)
Risk Weight 70-85 (70-85) 25-35 (30-40) 15-30 (50-60)
Allocation 50/50 AU/AG (50/50 AU/AG)

The LT downtrend is leading. Given the manipulative technical character we cannot exclude another attempt towards the recent highs. Experience then would raise the expectation of a massive drop in this ratio in a very short period of time. We are most likely to stay with a balanced Gold and silver allocation until the ratio trends towards the 50-55 level. No change.

(The Risk picture resembles that of Oil in a shorter term time frame. The big drop 5 weeks ago followed by a sideways correction. The LT Risk weight has much room to drive this ration towards equilibrium. The speed at which this happens is completely unknown yet as we would need to sede a very strong down move first. How this will unfold could be surprising. No chang)


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

EUR/USD FX Price Live, Weekly risk position analysis based on Hourly, Daily, Weekly and Monthly data

EUR/USD Month Week Day
Close 23 August: 1.1128 (1.1089)
Trend Direction Up (Up) Up (Up) Up (Down)
Risk Weight 10-15 (10-15) 25-30 (20-30) 15-25 (40-55)
Allocation 100% (100%)

Another bounce of off the recent lows shows typical peaking action of the US$ technically. Friday's close was an outside day trading range and above the previous day's high possibly calling a bullish reversal. No change.

(A $ top 3 weeks ago followed by a near 2% rally and another near 2% drop last week. A dollar high is clearly developing in a technical sense and being long dollars is the wrong risk approach at this time. No change)


USD/CHF FX Price Live, Weekly risk position analysis based on Hourly, Daily, Weekly and Monthly data

USD/CHF Month Week Day
Close 23 August: 0.9734 (0.9773)
Trend Direction Down (Down) Down (Down) Up (Up)
Risk Weight 35-50 (40-50) 15-20 (15-25) 60-65 (25-30)
Allocation 100% (100%)

Friday's turnaround is bearish for the buck whilst the ST Daily is moving into bearish divergence. Risk favours a fully hedged long dollar transaction exposure. No change.

($/Swiss is looking undecided ST again. As the LT risk weight trend is down we stay with a full long dollar hedge)


Cable GBP/USD FX Price Live, Weekly risk position analysis based on Hourly, Daily, Weekly and Monthly data

GBP/USD (Cable) Month Week Day
Close 23 August: 1.2215 (1.2143)
Trend Direction Down (Down) Up (Up) Up (Up)
Risk Weight 10-15 (5-15) 5-15 (0-10) 70-75 (15-30)
Allocation 100% (100%)

Thursday's and Friday's Up and Down moves are typical for emotional sales near a market bottom (Cable bottoming). The developing bearish divergence between ST and MT is quite normal under these circumstances. Risk weight favours a fully hedged long dollar exposure. No change.

(A very oversold Cable condition in all timeframes caused this market to rally a little last week. All the bad political news is out so its game on. We remain technically positive and expect a much higher risk of a Cable rally. No change to stay long dollar fully hedged fwd)


USdollar Index Weekly risk position analysis based on Hourly, Daily, Weekly and Monthly price data

USD Index Month Week Day
Close 23 August: 97.26 (98.20)
Trend Direction Down (Down) Down (Down) Down (Up)
Risk Weight 75-85 (80-90) 55-65 (65-75) 60-70 (45-60)
Allocation 100% (100%)

Friday's bearish reversal action put the Index back where it technically belongs. All timeframes are trending down and have plenty room to develop in that direction. Risk favours a fully hedged long dollar exposure. No change.

(The index risk weight still does not look favourable although it rallied 1% after the 2% drop 2 weeks ago. Technical risk demands a fully hedged long dollat transaction risk exposure. No change)


GBP/EUR FX Price Live, Weekly risk position analysis based on Hourly, Daily, Weekly and Monthly data

GBP/EUR Month Week Day
Close 23 August: 1.0990 (1.0948)
Trend Direction Down (Down) Up (Up) Down (Up)
Risk Weight 20-30 (15-30) 10-20 (5-15) 80-85 (25-50)
Allocation 100% (100%)

Divergence between ST and MT/LT may pause this early advance of GBP having bounced off the 3 year bottom line. Given the low risk weight in MT and LT, this market favours a fully hedged short GBP exposure. No change.

(The fairly sharp reversal we expected did materialize last week with a near 2,5% rally. GBP is tricky given the political scene and Brexit jitters. Looking beyond fundamentals to technical risk only the LT down trend has not quite finished but ST and MT have turned up. Managing currency risk is not a high spec game and one must be act risk averse when these technical tools giver potential warning. Yes we can be wrong but cost of goods sold will deal with a 5% adverse move)


BTC Bitcoin Price, Weekly risk position analysis based on Daily, Weekly and Monthly data

BITCOIN BTC/USD Month Week Day
Close 23 August: 10389 (10330)
Trend Direction Up (Up) Down (Up) Up (Up)
Risk Weight 60-70 (60-70) 50-60 (55-65) 25-35 (25-30)
Allocation 0% (0%)

After a relatively slow sideways week, BTC (or its participants) is showing signs of getting tired of the huge weekly swings we've seen since April. Market looks technically heavy MT and LT. We are still a long way from participating but keeping a close eye on its progress. No Change.

(Having seen a lovely 40% diminishing to 25% trading range for about 10 weeks now this market remains very high risk. Pure speculation and cannot yet be part of a serious investment portfolio without sense of proper regulation. 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 risk position analysis based on Hourly, Daily, Weekly and Monthly price data

US30 (Dow Jones) Month Week Day
Close 23 August: 25628 (25886)
Trend Direction Up (Up) Down (Down) Up (Down)
Risk Weight 80-85 (80-85) 45-60 (55-70) 60-65 (25-30)
Allocation 0% (0%)

The 1000 point swing action these past three weeks and ending on a weak note is adding pressure to further reallocation of equity assets. It is a tough call even though this index looks more risk now even than last year when we departed. No Change.

(There is some bullish divergence developing ST but this major Index still looks extremely high risk. So, No change)


S&P 500 Weekly risk position analysis based on Hourly, Daily, Weekly and Monthly price data

Standard & Poor 500 Month Week Day
Close 23 August: 2847 (2888)
Trend Direction Up (Up) Down (Down) Up (Down)
Risk Weight 80-90 (85-90) 50-65 (60-75) 65-75 (30-40)
Allocation 0% (0%)

A similar to Dow and 150 point swing action these past three weeks whilst ending on a weak note is adding pressure to further reallocation of equity assets. The S&P index looks equily more high risk than last year when we departed. No Change.

(The forces that keeping carrying this index higher every month are completely counter intuitive technically. We believe that the risk as calculated from a price chart is simply too high to participate. A ST and MT downtrend with LT being up is a function of the seemingly unnatural 'it makes sense' to borrow cheap and buy stocks' attitude. No change)


Brent Crude oil Weekly risk position analysis based on Hourly, Daily, Weekly and Monthly price data

Brent Month Week Day
Close 23 August: 58.94 (58.64)
Trend Direction Down (Down) Down (Down) Up (Down)
Risk Weight 30-40 (30-40) 10-20 (15-20) 55-65 (30-35)
Allocation 0% (0%)

Daily ST timeframe moved upo fairly rapidly following the rally towards 61.50 this week.
This rally looks to be ending and our technical picture favours LT risk weight and trend to be leading still. Of course this market is highly sensitive to ST news, which it just is: Short Term News. No Change.

(With all time frames now in Downtrend, No change)

Posted in A - All Financial Blogs | 2020 Forecast.

Leave a Reply