Gold & Commodities Archives - Page 63 of 75

May 20, 2012

Chinese economics: Is iron ore demand real?

Reuters video: Nicholas Zhu, ANZ Bank head of macro-economic data Asia, examines iron ore stockpiles at Qingdao port.

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Hat tip to Houses and Holes

Colin Twiggs

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.

May 17, 2012

Commodities point to lower stock prices

The CRB Commodities Index broke support at 295, warning of another primary decline. Respect of zero by 63-day Twiggs Momentum strengthens the signal. Divergence between the S&P 500 Index and commodities warns that stocks are over-priced and likely to fall.

CRB Commodities Index and S&P 500 Index

* Target calculation: 295 – ( 325 – 295 ) = 265

Colin Twiggs

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.

May 17, 2012

Crude: Brent and WTI Light

Nymex WTI Light Crude broke support at $96/barrel, warning of a primary down-trend. Reversal of 63-day Twiggs Momentum below zero strengthens the signal, while follow-through below $93 would confirm.

Nymex WTI Light Crude

* Target calculation: 95 – ( 110 – 95 ) = 80

Brent Crude is testing medium-term support at $110/barrel. Failure would indicate a fall to the primary level at $103. Follow-through below $100 would offer a long-term target of $75/barrel*. Reversal of 63-day Twiggs Momentum below zero would strengthen the bear signal.

ICE Brent Afternoon Markers

* Target calculation: 100 – ( 125 – 100 ) = 75

Colin Twiggs

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.

May 17, 2012

Dollar rallies while Gold & Silver fall

The Dollar Index is testing primary resistance at 81.50 on the weekly chart. Respect of zero by the latest 63-day Twiggs Momentum trough suggests continuation of the primary up-trend. Follow-through above 82 would signal an advance to 86*.

US Dollar Index

* Target calculation: 82 + ( 82 – 78 ) = 86

Spot Gold broke support at $1550/ounce on the daily chart. Expect retracement to test the new resistance level at $1600 but a sharp fall below zero by 63-day Twiggs Momentum warns of a primary down-trend. Breach of support at $1500 would confirm, offering a long-term target of $1200*.

Spot Gold

* Target calculation: 1500 – ( 1800 – 1500 ) = 1200

Spot Silver is testing primary support at $26/ounce. 63-Day Twiggs Momentum oscillating below zero already indicates a primary down-trend. Breach of support would offer a target of $16/ounce*.

Spot Silver

* Target calculation: 26 – ( 36 – 26 ) = 16

Colin Twiggs

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.

May 9, 2012

Crude oil falls

Both Brent Crude and Nymex Light Crude are falling, with signs that the global economy is slowing and that tensions with Iran are easing. Brent is close to the 61.8% Fibonacci retracement level and a fall below $110/barrel would test primary support at $100. Reversal of 63-day Twiggs Momentum below zero would warn of a primary down-trend — and confirm a European recession. Recovery above $115 remains as likely, however, and would suggest a new primary advance.

ICE Brent Afternoon Markers Weekly Chart

Nymex WTI Light Crude has already penetrated its rising trendline and support at $103/barrel. Reversal of 63-day Twiggs Momentum below zero would strengthen the bear signal. Failure of support at $96 would confirm a primary down-trend — and warn of US recession.

Nymex WTI Light Crude Weekly Chart

Colin Twiggs

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.

May 9, 2012

Commodity prices and the S&P 500

The CRB Commodities Index is testing primary support at 295 and respect of the zero line (from below) by 63-day Twiggs Momentum warns of another primary decline. Target for a breakout would be 265*. Divergence between commodities and the S&P 500 suggests that stocks are over-priced, with the Fed doing its best to depress bond yields and pump up stock prices ahead of the November election.

CRB Commodities Index and S&P 500 Index

* Target calculation: 295 – ( 325 – 295 ) = 265

Colin Twiggs

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.

May 9, 2012

Gold breaks support at $1600/ounce

Spot Gold broke its long-term rising trendline and support at $1600, warning of a primary down-trend. Reversal of 63-day Twiggs Momentum below zero strengthens the signal. Failure of primary support at $1500 would confirm, offering a target of $1200*. Recovery above $1600 would indicate all bets are off.

Spot Gold

* Target calculation: 1500 – (1800 – 1500) = 1200

The Gold Bugs Index, representing un-hedged gold stocks, has been suggesting a gold down-trend for some time.

Gold Bugs Index

The Dollar Index broke through resistance at 80 on the weekly chart and a 63-day Twiggs Momentum trough above zero indicates another rally. Expect a test of 82 in the next few weeks, mirrored by a weakening gold price.

US Dollar Index Weekly Chart

* Target calculation: 82 + ( 82 – 78 ) = 86

Colin Twiggs

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.

May 3, 2012

Commodity and stock prices diverge

We had an interesting discussion last week about the correlation between commodities and stocks. The weekly chart below shows how CRB Commodities Index closely tracks the S&P 500 — except in times of extreme volatility like 2007/2008. We are now witnessing another divergence, with the CRB headed for a test of primary support at 295 while the S&P 500 strengthens. Does weak demand for commodities indicate that stocks are over-priced as in 2007? The Fed has been doing its best to depress bond yields, pumping up stock prices ahead of the November election. It is too early to tell what the outcome will be, but we need to monitor this relationship through the year.

CRB Commodities Index v. S&P 500 Index

The divergence between Brent Crude and Nymex Light Crude, from early 2011, continues. Both are in a primary up-trend, however, and breakout above the 2011 Nymex high would threaten the still fragile US recovery, offering a long-term target of $140/barrel. Brent is currently testing medium-term support at $115, but respect of this would also confirm a primary up-trend.

ICE Brent Afternoon Markers v. Nymex WTI Light Crude Weekly Chart

Colin Twiggs

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.

May 3, 2012

Gold and Dollar indicate uncertainty

Spot Gold continues its consolidation between $1600 and $1700 per ounce, while testing the long-term rising trendline. Recovery above $1700 would suggest another primary advance; confirmed if an inverted head and shoulders formation is completed by a rise above $1800. 63-Day Twiggs Momentum oscillating around zero indicates uncertainty, however, and failure of support at $1600 would warn of a long-term trend change and test the primary level at $1500.

Spot Gold

* Target calculation: 1800 + (1800 – 1600) = 2000; 1500 – (1800 – 1500) = 1200

The US Dollar Index reflects the inverse of gold, with a potential triple bottom threatening to end the long-term down-trend on the Monthly chart. 50-Week Twiggs Momentum is oscillating around the zero line, indicating uncertainty.

US Dollar Index Monthly Chart

On the weekly chart, the dollar has met strong resistance at 80 and reversal below support at 78 would warn of another test of the 2011 low at 73. Reversal of 63-day Twiggs Momentum below zero would strengthen the bear signal.

US Dollar Index Weekly Chart

* Target calculation: 82 + ( 82 – 78 ) = 86; 78 – ( 82 – 78 ) = 74

Colin Twiggs

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.

April 26, 2012

Crude and commodities

Brent Crude is drifting lower but so far has not seriously tested medium-term support at $115/barrel. Respect would confirm the primary up-trend, offering a target of $135*. Respect of the zero line by 63-day Twiggs Momentum would also strengthen the signal.

ICE Brent Afternoon Markers

* Target calculation: 125 + ( 125 – 115 ) = 135

The broader CRB Commodities Index is headed for a test of primary support at 295. Respect of zero (from below) by 63-Day Twiggs Momentum indicates continuation of the primary down-trend. Breach of primary support would confirm the signal.

CRB Commodities Index

* Target calculation: 295 – ( 325 – 295 ) = 265

Colin Twiggs

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.