Observations on Gold * March 13 (b.2 & b.3)

As gold is dealing around what has been a key level $1586 (+/1) over the last few days, I am following up on yesterday´s post in which I laid out several scenarios.-

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b.1) Buyers keep control of the situation and seek to bring price into higher value areas (clusters) – $1600 is particular appealing rounded number, which is right in the middle of the bigger area contained between $1601-$1599 – Specifically, I´m keying $1603, followed by $1608-$1610 & $1611-$1612.

Above, $1615, $1618 & $1620 are the levels I´ll be paying attention to.

b.2) I will tend to favor more upside, unless I see a reactive an intense response by part of sellers. In that event, I will be looking at $1586, which happens to be the top of the balance area developed during last week. If sellers decide to act, we could be in presence of an analogue move to what we had back on Friday (after NFP), but in a different direction.

So far, b.1 hasn´t played out. Buyers were not able to surpass the $1600, which is an important number. The break of it, would (eventually) attract more buyers.

Now, gold is currently trading between b.2 and b.3.- Price went as far as $1599 (too close, but not enough), only to retrace into the top of the balance area developed over the first week of Feb.-

What I am looking here is if this area will attract buyers, or not and how many  (in terms of buying pressure) of them will participate, if any.-

I will develop further in a later post, since currently gold is the middle of both scenarios and I would like to see how price action follows up and have a clearer picture.-

At last, $1592 is a key price point.- I am working with the idea of buyers pressuring in this level might open the possibility of challenging $1600.-

In that sense, $1583-$1580 might provide some buying response (I´ll be much more inclined into the short side if it doesn´t happen), followed by $1579-$1576

DP.-

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Update on Crude * March 11

“b” scenario played into this one, too.

a-) acceptance into balance area denoted above

b-) buyers maintain control into $92.20-$92. Into that event, I will be looking into $93-$92.40 as an area where I would expect some sort of selling reaction. I am currently working with the idea that a breach of $93.20 will likely bring into $94.80 as extended target – Before that $94.20, $94 & $93.60 are key price points.

c-) Sellers keep the pressure into lower areas of value $90.40 as a key price point. I am looking into $89.40-$89, followed by $88.40, $88 and $87.70, as extended targets.

Buyers managed to keep control of the situation. Price flirted a tad above the projected target of $93.20 and crude is experiencing some rejection into $93.40.

Follow up in price action will confirm/reject if the selling is only temporarily or if deeper retracement should be expected.

So far, price broke out of the balance area of $92-$91 into (as in gold) another important vertical development.-

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Again, as in the case of Gold, I´m paying particular attention to these type of moves, since it usually provides hints of a bigger move to come, unless certain conditions/reactions take place in the market.

The move is somewhat overextended to the upside, however it is undeniable that buyers are in control (at least for now) and new value areas have been tested/probed.-

$93.20 was an important level I was watching, and unless I see an important and intense selling reaction, I´ll be leaning into more upside.

However, true to my methodology, I am laying out different alternatives to keep in mind.

Therefore,

b.1-) Upside continues. Buyers keep control of the situation.-

$93.80-$93.50 is an important level, followed by $95.30-$94.95 .- Before that, I will be looking at $94.50 & $94 as possible containment levels.

b.2) consolidation between $ $93.825-$92.40 – I´ll keep this scenario but I would not like to see it much below $92.-

b.3) Sellers regain control, thus bringing crude into previous levels.-

Important to note areas are $91, $90 & $89.50.-

DP.-

Gold Update * March 12

Possible scenarios were laid out back on March 8

a-) containment between the (newly modified)  balance area $1586-$1560

b-) Buyers maintain the pressure into $1586 (not a mere “test”, that is). Then, I will be looking into $1592-$1590, followed by $1596, which will bring it closer to the $1600 mark.  Above, I will be keying into $1603.

c-) Alternatively, sellers keep control of the situation. In this event, $ 1567 is an important price point, followed by $1560. I´m working here with the idea that the recent test/break of balance into $1560 is a clue of eventual (further) downside.

“b” scenario developed quite accurately to what I was expecting:

– 7-day balance area contained was broken by an important move (vertical development)

– $1586 was busted (not merely tested)

– development stopped a tad above the projected value of $1596 (actually, $1597.7 was the HOD), at least for now. If you take a closer look, you´ll see that price action respect almost to the tick the areas (previously) marked.-

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I tend to put a lot of attention in this type of price action, as noted previously on several posts.-

It is important to be able to have the flexibility to raesses (even within the previosuly noted alternatives) and set forth new scnearios in order to be able to identify viable options regarding the price discovery process.-

In that sense, I´ll be working with the following alternatives:

b.1) Buyers keep control of the situation and seek to bring price into higher value areas (clusters) – $1600 is particular appealing rounded number, which is right in the middle of the bigger area contained between $1601-$1599 – Specifically, I´m keying $1603, followed by $1608-$1610 & $1611-$1612.

Above, $1615, $1618 & $1620 are the levels I´ll be paying attention to.

b.2) I will tend to favor more upside, unless I see a reactive an intense response by part of sellers. In that event, I will be looking at $1586, which happens to be the top of the balance area developed during last week. If sellers decide to act, we could be in presence of an analogue move to what we had back on Friday (after NFP), but in a different direction.

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I will be watching $1579,  $1576.5 & $1572, followed by $1567.5 & $1562

b.3) consolidation within the current area. Preferably, I would like to see it contained within $1590, but it can go as low as $1586 . – Sustained selling pressure into this limit, will likely bring back gold towards “b.2” scenario.

DP.-

 

S&P500 futures update (longer term view) * March 8

Below is a current chart of my long-term view on the ES.

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Noted is a divergence between price and positioning of buyers vs. sellers.-

That is denoting that, while price is increasing, sellers are still (yet) maintaining their short positions. As usual, there are several (at least) two scenarios in which I would like to focus.-

a-) the possibility of longs pressuring the shorts established at 1547.75.- If these decide to cover, it could ignite the spark into further price increases. There are still shorts committed, nevertheless. I have no reference levels above, at the moment.

b-) alternatively, if the positioned shorts are able to sustain the pressure of buyers, we could see a retracement. –

Some key reference levels:

1530-1528 is the immediate area

1524

1520

1518-1510 (broad area)

1517

the closer the pressure into 1504, the bigger the chances of 1494-1490.-

It is important to take into account that during index futures rollover period, the readings of CumDelta (in which I  base some of my analysis) tend to be skewed due until all market participants have moved their positions to the current quarter.

DP.-

€uro update * March. 8

Broad, 200 pip balance area, as noted below.

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Currently trading into 1.2990 (as I am writing this post) which happens to be a key price point. The more time/acceptance the €uro spends within this area, the more chances I see of further downside, provided no buying shows up to defend these levels.

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To the downside, i am looking into 1.2940, followed by 1.2905. Lastly, 1.2880 is key. I{m working with the idea of sellers pressuring into this levele, might open the dooor for a bigger move. In that event, I will be looking into1.2840 & 1.2800-1.2785, followed by 1.2740, 1.2720-1.2700-1.2660 as an extended target.

Alternatively, provided buyers defend the current levels, 1.3075 is an important price point to watch, although the real threshhold is located into 1.3120-1.3080, followed by 1.3160. Provided buying pressure is maintained, the surpassing of 1.3200-1.3180 will be key for more upside. I will be watching also 1.3220 & 1.3250 as extended targets.

DP.-

Crude Oil Update * March 8

Sort of similar picture of what gold has been doing.

Mayor containment area denoted by $91.90-$89.325.

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Buyers response into the lower end of the (broader) balance area has develop into a second (smaller) balance area $91-$90.70.

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Thus, some scenarios to work with:

a-) acceptance into balance area denoted above

b-) buyers maintain control into $92.20-$92. Into that event, I will be looking into $93-$92.40 as an area where I would expect some sort of selling reaction. I am currently working with the idea that a breach of $93.20 will likely bring into $94.80 as extended target – Before that $94.20, $94 & $93.60 are key price points.

c-) Sellers keep the pressure into lower areas of value $90.40 as a key price point. I am looking into $89.40-$89, followed by $88.40, $88 and $87.70, as extended targets.

DP.-

Gold Update * March 8

NFP brought intense selling pressure. Gold sol $18, testing $1560, facing important buying action, thus rejecting price into lower value areas.

Although I am keeping my downside bias, the (buying) response is undeniable and should be taken into account, specially in the short-term, where I’ll be keying into further follow-up from buyers.

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Thus, the following scenarios:

a-) containment between the (newly modified)  balance area $1586-$1560

b-) Buyers maintain the pressure into $1586 (not a mere “test”, that is). Then, I will be looking into $1592-$1590, followed by $1596, which will bring it closer to the $1600 mark. ABove, I will be keying into $1603.

c-) Alternatively, sellers keep control of the situation. In this event, $ 1567 is an important price point, followed by $1560. I{m working here with the idea that the recent test/break of balance into $1560 is a clue of eventual (further) downside.

$1555 is a key price point, followed by $1552-$1550 (watch out with this round and perfect number)  & $1546-45, as references.

DP.-

Gold (almost) midday update * March 6

Same behaviour as of March 1st & 4th: rejection of lower value areas into the edge of area of balance area ($1567-$1565).

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I will be looking at the intensity of response from sellers in this area (provided a selling reaction takes place). In that case, I will be keying into $1586. In the event prices reaches it, I will be analyzing the (eventual) response from part of sellers.

However, I respect these type of moves, in the sense that they tend to provide clues of further movement into the same direction, ta least in the short term and subject to how intense is the sellers response into key levels.

I will be looking at the intensity of response from sellers in this area (provided a selling reaction takes place). In that case, I will be keying into $1586. In the event prices reaches it, I will be analyzing the (eventual) response from part of sellers.

However, I respect these type of moves, in the sense that they tend to provide clues of further movement into the same direction, ta least in the short term and subject to how intense is the sellers response into key levels.

Thus, there are 3 scenarios I am working on:

a-) rejection into the top end of value area ($1586-$1584), therefore market still balanced and will eventually go to test lows again. IN this case, I would be looking at the possibility of braking into new lows.

b-) consolidation into higher value areas (within) the bigger balance area

c-) buyers keep control, thus braking value area. The hurdle here will be the area denoted by $1596-$1584. $1600 is an important area, followed by $1603, $1610 & $1615, at least in the short term.

DP.-