Slipping Out Of February

February 28, 2014 - 4:09pm

 by Gary Wagner

Slipping Out Of February

It's not unusual to find an additional round of profit taking occurring on a Friday that is also the end of trading for the month. That is a good part of what we're experiencing today.
 
Luckily, the dollar turned soft and helped to keep losses down, the dollar weakness accounting for an 8.40 boost against a decline in regular trading of 14.40. 
 
Apparently currency traders are also squaring their positions as the week and month end, heading into the weekend. Equity markets around the world were mixed - slightly up or slightly down in the three key regions of stock trading. Crude is treading water at the 102 to 103 level.
 
Some of the fundamentals that we experienced through February are still intact. Some have turned neutral for the moment. None have turned strongly against a bullish move in gold over the next few weeks.
 
The international situation is still volatile. Ukraine is sitting in a room with a half dozen 800-pound gorillas. But, as the IMF did, Russia has said it will guarantee Ukraine's debt, and like the IMF, it has yet to publish its conditions. 
 
Venezuela remains our most confusing issue because it seems as if the middle and upper-middle classes there have had enough concerning not so much of the flow of more wealth into the hands of the poor (little as it may be) but about the curtailment of basic political rights and probably more importantly, over governmental incompetency and corruption. 
 
Americans should make special note that when the thirteen colonies declared independence from England, the material gripes were quite small. It was the infringement of basic human rights that sent the musket balls flying.
 
Finally, Thailand is unstable, and while not a huge player on the world stage, nonetheless, like every other country, their economy is enmeshed with credit markets.
 
We find it rather amusing that at the close of business Wednesday there was a lot of forward looking advice that said gold would rise next week. Today, after a couple of small losses against a rapid rise during he rest of the month, now "experts" are saying they are looking for gold to fall more next week.
 
The only fundamental data from the United States that possibly put a dent in the idea of a softening economy were an unexpected rise in new home sales. All other indicators released in February were down.
 

 

As always, wishing you good trading,

 

Gary S. Wagner - Executive Producer

Sentiment Indicator:

Gold Forecast: Proper Action

On Wednesday we raised our protective stop in gold to below 1326. 

 We went long at 1258 - 1266, or an average price of 1262.

Yesterday we covered our long gold at 1325 (1325 -1262 = + $63.00)

Profit per 100 Oz. contract is $6300.00

Gold Market Forecast

This was a most interesting week in the precious metals markets. Although gold prices climbed to a new four-month high, they did so with a rather large caveat. The highs in gold prices seen both this week as well as last week were new price highs, however not only was there not follow through in these rallies, when you look at the individual weeks, both weeks had tight ranges and closed very near the open of the week. The weekly candlesticks that formed are called “doji” candles. They are significant in pointing out potential pivot points and reversal points in the marketplace.

As our initial target for this most recent rally was 1329, we saw that target hit as this week’s intraday high was 1346. It is our belief that we will most likely see a little bit of weakness in the market, and today’s video will look at support levels that prices could fall to. With that in mind we will also lay out our strategy for the next two weeks detailing specific parameters necessary to trigger our next trade.