by Bill Downey     Price Analysis of Gold and Silver
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Technical Analysis Trading Gold, Trading Silver/ analysis By Bill Downey providing key turning points & charts for investors and speculators in Precious Metals Trading, and Precious Metals Markets

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Gold Technical Analysis Update

17 Feb 2016 12:55 PM | Bill Downey (Administrator)
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Everything has changed so far in 2016 for gold.  Instead of selling off after an NFP report, it didn't.  Instead of selling of going into an FOMC meeting, gold only pulled back for one day and it took off higher again.  Instead of selling off during Humphrey Hawkins testimony by Yellen it rallied from 1180 to 1260 over the next 24 hours.  Last but not least,  the last few years when China would close for their new year, the control boyz would press prices lower.  Again the opposite happened and gold rallied right thru the week.  When a market begins to do the opposite of what its used to doing it suggests that things have changed for trend.  While its not a guarantee we need to be alert when the next Options Expiration comes up at the end of the month, and the next NFP report as well as Fed FOMC meetings.  If the same thing happens, it will be another clue that the bear market is over.


Support is that red channel line near 1190 and then the 1172-1182 area and then hear 1155.   Odds favor 1190-1195 or 1172-1182 will be this weeks low.






This very short term chart on gold shows first support at 1190-1195 (Fib 38% re-trace) and that area was touched on Tuesday.  

The 2nd support area is 1167-1172 (Fib 50% re-trace) and that is the area with the strongest support.  

Resistance is the blue moving average near 1217 - 1222.





ON the daily chart below here again we see the 1172 area showing it as a strong support area where the 2015 downtrend line crosses with the uptrend channel.  Price is now in 2015 territory and  that's another reason bullish development.




Short term cycles

The last blue cycle bottomed a few days and that happens once in a while. But the rally lasted right up until the last few hours of the  cycle window.  Here is yet another indication that gold (at the moment) is strong.  If this remains the case it's possible that gold will hold the 1190 area instead of moving to 1172.   Since the window for a turn doesn't open until Friday and the ideal day is not until Monday for a turn, I'm hoping gold will test the mid-channel line near 1180 and possibly break it by a little to test 1172.  That 1172 area is a YEARLY PIVOT NUMBER so it should offer strong support.  The other lower line is near the 1160 area but we don't expect it to be tested this week.

The next cycle turn is due Feb 22nd (Plus or minus 72 hours).  That means the window for a turn opens Friday and will last thru next Thursday.  In summary, the intermediate term trend remains up in gold and as long as we keep making the lows on the blue cycle, the odds favor the trend remains up.   What we don't want is an inversion where we start making RED CYCLE LOWS.  That rotation is usually associated with a market that rises during counter trends and not the main trend.   The last ROTATION to a blue cycle low was right at the bear market lows.  As long as we remain with blue cycle lows, the odds favor the trend remains up.





Silver 

Silver has support at 1502-1510 and then at 14.80.  One of those two points should be this weeks low.   Resistance is 15.39-15.49 and 15.60.



Is the bear market over ?

We had Dec 2015 - June 2016 as our window for a bear market low and Dec or March as the two most likely months for a turn.

For a price range we had 850-1050 as the zone where a low was most likely to occur.

Decembers low was 1045.  That means that gold has met the requirements in price and time to bring an end to the bear market.

Gold must close above at least 1130 on the last trading day of the February in order to move the medium term trend from bearish to neutral.

More importantly we need to see a weekly and monthly close above 1255 to confirm the medium term trend is no longer bearish.

Since April 24, 2015 that has been the number to watch on our reports for the medium term.   (Last week's close ws 1247).


Bottom line is that there are many indications that the bear market is over for gold.  So far, we've gone from bearish to neutral.

We still need to see a weekly and monthly close above 1255. 

The key development is the dual yellow downtrend line has been exceeded and not it becomes support.   Resistance is the Fib 38% area from 1270-1288.  Its the last resistance until the 1322-1360.    The TRIPLE GREEN LINE IS THE BULL MARKET UPTREND.  Once gold makes that line support, odds are strong the new bull market into 2020 will be underway.  Finally, for the medium term trend to go back to bullish the blue moving average (1120) must cross above the red average (1130) with price above both on a monthly closing basis.



In summary, the trend has gone from bearish to neutral, and as long as we are above 1120 on a monthly closing basis, odds are strong that the bull market has resumed.   Let's see what happens into month end.   (We have been above the moving averages 6 times during this bear market but have never closed above them on the LAST DAY OF THE MONTH.    So we want to see that (1130) and also 1255.




Technical Analysis :: Gold & Silver

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