The US Dollar Index rallied to test resistance at 83.50. Breakout would target the 2010 high of 88.00. 63-Day Twiggs Momentum oscillating above the zero line indicates a strong up-trend.
* Target calculation: 82 + ( 82 – 78 ) = 86
Spot Gold is consolidating above primary support at $1530 per ounce. 63-Day Twiggs Momentum below zero signals a primary down-trend. Downward breakout would offer a target of $1300*……. unless the Fed introduces QE3.
* Target calculation: 1550 – ( 1800 – 1550 ) = 1300
Spot Silver is similarly testing primary support at $26 per ounce. Breakout would offer a target of $16*….. again with the QE3 caveat.
* Target calculation: 26 – ( 36 – 26 ) = 16
Commodities continue in a primary down-trend, warning of a global economic down-turn. Respect of resistance at 295 by the CRB Commodities Index would warn of another primary decline, with a target of 235*. 63-Day Twiggs Momentum oscillating below zero indicates a strong down-trend. Penetration of the descending trendline is unlikely, but would suggest that a bottom is forming.
* Target calculation: 265 – ( 295 – 265 ) = 235
Brent Crude is also testing resistance — and the descending trendline — at $100 per barrel. Respect would indicate another decline, with a target of $75 per barrel*. There are two wild cards that could impact on price: tensions with Iran and QE3.
* Target calculation: 100 – ( 125 – 100 ) = 75
The gold-oil ratio (measured against Brent crude) is close to its mid-point of 15.0, offering little in the way of overbought/oversold readings for gold over the last few years (after a false overbought reading — above 20 — in 2009).
Colin Twiggs is a former investment banker with almost 40 years of experience in financial markets. He co-founded Incredible Charts and writes the popular Trading Diary and Patient Investor newsletters.
Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.
Focusing on interest rates and financial market liquidity as primary drivers of the economic cycle, he warned of the 2008/2009 and 2020 bear markets well ahead of actual events.
He founded PVT Capital (AFSL No. 546090) in May 2023, which offers investment strategy and advice to wholesale clients.
The best explaination of whats going on I have seen to date , its clear to see we need to hang on to our hats , there is one wild ride comming . great tine to buy cheep good companys paying very good long term earings.
See ya Mark .
Thanks Mark. I would say it’s not yet time to buy (good companies), but soon will be.
I am sure the lowering oil price offers some hope for the world economy here. It is not like last time when it kept going up for a lot longer. Since oil powers the economy, it must have a severe influence on it.
You’re right. Lower commodity prices are stimulative, but there is a slight lag.