Metals – FX- Indices – update – close Q1 29 March 2019

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

Gold/USD Month Week Day Hour
Close 29 March: 1291 (1313)
Trend Direction Up (Up) Down (Down) Down (Up) Down
Risk Weight 65-75 (65-75) 55-60 (60-65) 25-55 (70-85) 35-45
Allocation 100% (100%)

Gold finished Q1 on a weakish note, but the LT uptrend that theoretically started at 1160 in August last year still prevails. MT and ST is a mixed picture. We stay with the position.

(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)

Silver/USD Month Week Day Hour
Close 29 March: 15.40 (15.40)
Trend Direction Up (Up) Down (Down) Down (Up) Down
Risk Weight 40-50 (40-50) 40-50 (50-55) 25-45 (60-75) 60-70
Allocation 100% (100%)

All time frames show mixed Risk weight. With Q1 monthly LT trend still up and the Nov 2018 support at around 14.00 we stay with the position.

(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)

Gold/EUR Month Week Day Hour
Close 29 March: 1151 (1161)
Trend Direction Up (Up) Down (Up) Down (Up) Down
Risk Weight 85-90 (85-90) 60-65 (65-70) 40-65 (65-80) 50-60
Allocation 100% (100%)

Gold/EUR show a mixed picture. the LT trend at Q1 close is still up and ST and MT could easily turn back up from neutral risk weight levels. Channel support should hold. If Gold drops through 1145 on hourly close we need to (temporarily) reduce our allocation to 50%. This protects the position taken near the 1050 level.

(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)

Silver/EUR Month Week Day Hour
Close 29 March: 13.49 (13.62)
Trend Direction Up (Up) Down (Down) Down (Up) Down
Risk Weight 55-60 (55-65) 50-55 (55-60) 30-55 (55-70) 70-80
Allocation 100% (100%)

A daily close below 13.00 is reason to protect position risk and reduce to 50% allocation. The LT trend that started at 12.00 is still in play at medium risk weight, hence every possibility for a resumption into the LT trend up.

(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)

Gold/GBP Month Week Day Hour
Close 29 March: 991 (994)
Trend Direction Down (Down) Down (Down) Down (Up) Down
Risk Weight 70-80 (70-80) 25-30 (30-40) 55-70 (65-75) 50-65
Allocation 100% (100%)

Everything GBP is influenced by Brexit jitters. The risk picture is still relatively positive however a daily close below the March low at 971 is reason to reduce allocation (temporarily) to 50%.

(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)

Silver/GBP Month Week Day Hour
Close 29 March: 11.60 (11.68)
Trend Direction Down (Up) Down (Down) Down (Up) Down
Risk Weight 50-55 (50-55) 15-25 (25-35) 30-45 (55-70) 65-75
Allocation 100% (100%)

Brexit jitters the past three weeks but the 11.45 level has held every time. A daily close below 11.40 is reason to (temporarily) reduce the allocation to 50%. Risk weight is medium to low in all time frames, thus lT risk remains more positive for Silver vs GBP.

(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)

GOLD/SILVER Ratio Month Week Day Hour
Close 29 March: 85.20 (84.85)
Trend Direction Up (Up) Up (Up) Down (Down) Down
Risk Weight 70-80 (70-75) 80-85 (70-85) 75-85 (45-55) 0-10
Allocation 50% AG (50% AG)

The ratio keeps turning up and down within relatively tight range and trades close to the 5 peaks seen during the past 20 years. As markets ALWAYS return to their equilibrium, this market has large downside risk. Daily divergence, turning down, is reason to stay with the 50/50 Gold/Silver allocation.

(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)


EUR/USD Month Week Day Hour
Close 29 March: 1.1216 (1.1295)
Trend Direction Down (Down) Down (Down) Down (Down) Down
Risk Weight 10-15 (10-15) 25-30 (25-30) 10-25 (65-75) 15-20
Allocation 100% (100% hedge)

The dollar showed strength last week and trades at the lows of a 20 week trading range between 1.12 and 1.16. Risk weight across time frames favors keeping long dollars hedged (against the very short trend).

(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)

USD/CHF Month Week Day Hour
Close 29 March: 0.9950 (0.9925)
Trend Direction Up (Up) Down (Down) Up (Down) Down
Risk Weight 75-85 (75-80) 60-70 (70-75) 20-25 (10-20) 20-35
Allocation 100% unch

A weak 1/2% rally emerged last week. This could continue but the MT outlook is for the 0.9800 1.0200 range to be in play for a while longer. The much higher LT risk weight favors staying with full dollar hedge.

(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)

GBP/USD (Cable) Month Week Day Hour
Close 29 March: 1.3030 (1.3195)
Trend Direction Up (Up) Down (Up) Down (Down) Up
Risk Weight 25-40 (30-40) 75-80 (75-80) 25-45 (50-60) 25-30
Allocation 100% (100%)

GBP dropped towards the lows of the 5 week trading range between 130.00 and 1.3300. Risk weight across time frames with daily having diverged from weekly still favors a hedge. From a speculative risk perspective the position should be reduced to 50% with a daily close below 1.2770., just above the level in January when we raised to 100%. From a hedge perspective we would reduce to 70% on a close below 1.2770.

(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)

GBP/EUR Month Week Day Hour
Close 29 March: 1.1595 (1.1680)
Trend Direction Up (Up) Down (Up) Down (Down) Up
Risk Weight 65-80 (65-85) 80-85 (80-85) 50-60 (35-40) 30-35
Allocation 50% (75%)

We reduce the position to 50% hedge. Looking at risk weight and trend at the end of Q1, the risk of a rapid Sterling price increase seems small and looking to possibly pick up Sterling on a temporary. This is meant to be a low risk temporary treasury play which may require some quick re-entry action on a GBP drop.

(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)

BITCOIN BTC/USD Month Week Day Hour
Close 29 March: 4100 (3987)
Trend Direction Up (Up) Up (Up) Up (Down) Up
Risk Weight 0-10 (0-10) 75-85 (65-75) 75-85 (75-80) 50-55
Allocation 0% (0%)

BTC is approaching the Febr 4200 high. Daily(ST) and Weekly(MT) are both approaching substantial divergence from Monthly. 4200 is very high risk, NOT the start of an uptrend towards 10k.

(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!)

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 29 March: 25928 (25502)
Trend Direction Up (Up) Up (Down) Up (Down) Up
Risk Weight 60-75 (60-75) 85-90 (85-90) 50-60 (50-60) 90-95
Allocation 0% (0%)

We're in a 1000 point trading range the last 5 weeks. Risk weight and trend shows a potential price rise early in the 1st Q2 week likely making a new 4 months high. As we can only play LT low risk entry and no ST trading we will not touch this market. There simply is no low risk LT entry at current levels.

(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)

Standard & Poor 500 Month Week Day Hour
Close 29 March: 2834 (2800)
Trend Direction Up (Up) Up (Down) N (Down) Down
Risk Weight 60-75 (55-75) 90-95 (90-95) 65 (75-85) 10-20
Allocation 0% (0%)

S&P shows the same risk weight/trend outcome as INDU. It could easily achieve a new 4 months high, but with high risk particularly in the Weekly (MT) time frame. No change.

(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)

USD Index Month Week Day Hour
Close 29 March: 97.20 (96.50)
Trend Direction Up (Down) Up (Up) Up (Down) Down
Risk Weight 80-85 (80-85) 60-65 (60-65) 70-90 (40-50) 65-70
Allocation 100% (100%)

The Dollar Index drives the same story as with the Majors above. A further ST dollar rally is possible and likely to stall thereafter. The reverse Risk weight/Price divergence (Higher risk weight whilst lower price high) indicates a higher chance of reaching 90.00 before 100.00. Long dollar transaction exposures should remain fully hedged.

(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)

Brent Month Week Day Hour
Close 29 March: 67.55 (67.08)
Trend Direction Up (Up) Up (Up) Down (Down) Down
Risk Weight 25-40 (25-40) 90-95 (90-95) 60-70 (80-90) 35-45
Allocation 0% (0%)

The fast price drop from 85 to 50 since October into Christmas and subsequent 50% correction logically hints towards economic contraction in the making. With narrowing weekly risk weight over 90 this market remains high risk and not ready for a LT low risk entry. No change.

(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)

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Posted in A - All Financial Blogs | 2021 Forecast.

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