Gold 1 OZ (XAU=X) reaches $1,559 as market observes tensions

Gold 1 OZ (XAU=X) reaches $1,559 as market observes tensions

Gold 1 OZ (XAU=X) reaches $1,559 as market observes tensions

Gold just hit a new 52-week high before backing off a bit.

Oil just exceeded its September peak before the serious profit taking showed up.

The volatility index is showing a series of higher lows even as the S&P 500 hits new highs. That’s a different kind of movement than what traders enjoyed in 2018.

Despite the “all is well” proclamation on Twitter about Iran from President Trump, traders in the 3 big markets where fear is often expressed are basically hedging bets even as the stock market indices continue upward. So far.

It’s odd to see higher stock market highs without seeing lower lows in the VIX. It’s a sign of concern that these 2 measures seem to be diverging.

Fear hasn’t taken hold but it’s showing signs of lurking in the background — judging by these indicators.

What’s important here is the movement indicated by the upward trend connecting the late November/December lows with the most recent January lows. It’s odd that the stock market indices have continued upward to newer all-time highs and yet the volatility index has not fallen lower. This is a change from recent behavior — well, from all of last year. Volatility traders don’t want to go along this time — this is called “fear.”

Stock have a way of continuing to trend despite the indications of these small warning signs, but it’s clear that something in the background may be changing. Gold and oil trending higher suggests issues for global equities markets. That, plus the odd behavior of the volatility index is something to consider as the new year unfolds.

Technical Indicators

Overall, the bias in prices is: Upwards.

Note: this chart shows extraordinary price action to the upside.

By the way, prices are vulnerable to a correction towards 1,510.86.

The projected upper bound is: 1,590.25.

The projected lower bound is: 1,535.76.

The projected closing price is: 1,563.00.

Candlesticks

A white body occurred (because prices closed higher than they opened).
During the past 10 bars, there have been 8 white candles and 2 black candles for a net of 6 white candles. During the past 50 bars, there have been 29 white candles and 20 black candles for a net of 9 white candles.

An engulfing bullish line occurred (where a white candle’s real body completely contains the previous black candle’s real body). The engulfing bullish pattern is bullish during a downtrend. It then signifies that the momentum may be shifting from the bears to the bulls.

If the engulfing bullish pattern occurs during an uptrend (which appears to be the case with PREC.M.XAU=), it may be a last engulfing top which indicates a top. The test to see if this is the case is if the next candle closes below the top of the current (white) candle’s real body.

Momentum Indicators

Momentum is a general term used to describe the speed at which prices move over a given time period. Generally, changes in momentum tend to lead to changes in prices. This expert shows the current values of four popular momentum indicators.

Stochastic Oscillator

One method of interpreting the Stochastic Oscillator is looking for overbought areas (above 80) and oversold areas (below 20). The Stochastic Oscillator is 34.4593. This is not an overbought or oversold reading. The last signal was a sell 2 period(s) ago.

Relative Strength Index (RSI)

The RSI shows overbought (above 70) and oversold (below 30) areas. The current value of the RSI is 72.73. This is where it usually tops. The RSI usually forms tops and bottoms before the underlying security. A buy or sell signal is generated when the RSI moves out of an overbought/oversold area. The last signal was a sell 97 period(s) ago.

Commodity Channel Index (CCI)

The CCI shows overbought (above 100) and oversold (below -100) areas. The current value of the CCI is 67. This is not a topping or bottoming area. The last signal was a sell 1 period(s) ago.

MACD

The Moving Average Convergence/Divergence indicator (MACD) gives signals when it crosses its 9 period signal line. The last signal was a buy 30 period(s) ago.

Rex Takasugi – TD Profile

PREC.M.XAU= closed up 9.764 at 1,562.033. Volume was -0% below average (neutral) and Bollinger Bands were 123% wider than normal.

Open     High      Low     Close     Volume___
1,552.0101,562.9351,545.0701,562.033 0
Technical Outlook 
Short Term: Neutral
Intermediate Term: Bullish
Long Term: Bullish
Moving Averages: 10-period     50-period     200-period
Close: 1,543.90 1,487.56 1,430.76
Volatility: 13 12 14
Volume: 0 0 0

Short-term traders should pay closer attention to buy/sell arrows while intermediate/long-term traders should place greater emphasis on the Bullish or Bearish trend reflected in the lower ribbon.

Summary

PREC.M.XAU= is currently 9.2% above its 200-period moving average and is in an upward trend. Volatility is extremely high when compared to the average volatility over the last 10 periods. There is a good possibility that volatility will decrease and prices will stabilize in the near term. Our volume indicators reflect very strong flows of volume into XAU= (bullish). Our trend forecasting oscillators are currently bullish on XAU= and have had this outlook for the last 19 periods. Our momentum oscillator is currently indicating that XAU= is currently in an overbought condition.

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