The Overall Technical Outlook for Gold and Crude Oil

Comex Gold (GC)

Gold rebounded to as high of 1133.3 last week, but subsequent sharp decline dampened the Bullish POV and mixed up the outlook.

So for now I will stay Neutral in here, and wait for confirmation on whether rise from 1044.5 is over.

On the Downside: a break of 1097.3 will complete a head and should top reversal pattern, ls: 1131.5, h: 1145.8, rs: 1133.3, and will suggest that move from 1044.5 is completed. This will also augur that the correction from 1227.5 is still in progress. And if so in such case a deeper decline should be seen to retest the 1044.5 low 1st .

On the Upside: a break above 1133.3 will suggest that rise from 1044.5 remains in progress, and a break of 1145.8 will target a test of the 1163 level resistance 1st .

The Big Picture: Price actions from 1227.5 are treated as correction to rise from 931.3 only. The Big Q is whether such correction is finished or not. As long as the 1097.3 Key support holds, I favor the Bullish case that the correction from 1227.5 is completed and rise from 1044.5 is resuming a larger up0trend to another high above 1227.5.

On the Downside: A break of 1097.3 will shift favor to the case that correction from 1227.5 is not completed and fall from 1145.8 would be developing into the 3rd wave of the correction for another low below 1044.5 before longer term up-trend resumes.

The Long Term Picture: the rise from 681 is treated as resumption of the long term up-trend from 1999 low of 253 after the interim consolidation from 1033.9 has completed in the form of an expanding triangle. Hence, the next long term target is 100% projection of 253 to 1033.9 from 681 at 1462 level. I will hold on to that Bullish view as long as 931.3 structural support holds. Stay tuned….

Nymex Crude Oil (CL)

Crude Oil failed to take out the 83.16 resistance last week, and subsequent sharp decline is in-line with my view that more consolidation will come in here.

Initial bias is mildly on the Southside this week for 38.2% retracement of 69.50 to 83.16 at 77.94.

The downside should be contained there and bring resumption of the rally from 69.50.

A break of 83.16 will target 83.95 as the high.

Note: sustained trading below 77.94 will augur that the rise from 69.50 is completed, and deeper decline may likely be seen to retest the Key support.

The Big Picture: Crude Oil is trading inside medium term rising channel, and the rise from 33.2 may still be in progress, as such the rise from 33.2 is treated as a correction to whole decline from 147.27 only, even in case of another high above 83.95, I will continue to expect strong resistance near to 50% retracement of 147.27 to 33.2 at 90.24 to bring a reversal.

On the Downside: a break of 69.50 support will augur that Crude Oil has topped out in medium term already and turn the outlook Bearish.

The Long Term Picture: there is no change in my POV that the fall from 147.27 is part of the correction to the 5 wave sequence from 98 low of 10.65, and the rebound from 33.2 is strong and could continue, there is no solid evidence that suggest fall 147.27 is completed and I am preferring the case that rebound from 33.2 is merely a corrective rise only.

Having said that, I see strong resistance between 76.77/90.24, the fibo resistance zone, and that brings reversal for another low below 33.2 before completing the whole correction from 147.27. Hummm….Stay tuned…

Posted by Shayne Heffernan on Mar 22nd, 2010and filed underLatest News, USA.You can follow any responses to this entry through theRSS 2.0You can leave a response by filling following comment form or trackback to this entry from your site