Providio's Special Metals Commentary

Providio's Special Metals Commentary

Posted in the Day Trading Forum

Since: Nov 11


#1 Dec 15, 2011
Gold: 14Dec Gold is testing the 200-day moving average at 1615-1620. Use a tight stop just below that level if you are trying to pick a short-term bottom. Upside risk is the historically Oversold condition. If the market sustains a move below the average, see below for levels.

That said, our Momentum measure is now decidedly negative and the market is sustaining the move below the lower end of our symmetrical triangle formation that has been in place since early September, bound between 1705-1750. A continuation of the pattern projects a move to 1325...

The previous lows at 1607.3 (20Oct) may offer new support. Upside risk is the historically Oversold conditions, as it is the most Oversold it has been since late September.

Falling trend line resistance comes in at 1683 and old support at what was the lower end of the triangle (1705) should now offer new resistance.

There is an interesting discussion of “paper” vs. physical gold and the ETF market, where some of this recent pressure may be originating. In our opinion, while this dynamic is pressuring gold in the interim, it would be long term bullish:

Seasonal Snapshot: General strength through the end of the year in the 5, 15 & 30yr pattern

Copper: 14Dec Still sagging on concerns over any meaningful agreements or pacts in the EuroZone and lack of stimulus here at home. After failing to make a meaningfully higher high above the huge rally two weeks ago. That move broke the March contract out above what appears to be a symmetrical triangle from mid September but the stall-out has now pulled our Momentum negative. Rising trend line support from back to late Sep comes in at 330.00 and the previous low was 321.85.

The 50% retracement of the August-September decline, about 20 cents higher at 375.00 offered resistance in late October and the market made an ensuing higher low, which can be constructive. A sustained move through this level targets the (falling) 200-day moving average another 25 cents higher at 400.
Seasonal Snapshot: All three patterns consolidate until year-end

There is risk in trading futures and options. One's financial suitability should be considered carefully before placing any trades with Providio Trading Consultants, Inc.

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