INTERNATIONAL SILVER WEEKLY PERSPECTIVE ( From 2001 till date) Prices are in $/Oz :-
Our preferred wave count is as follows:
WAVE 1I - which in leading diagonal starts from 4 ( Nov 01) - 5.13(JUL 02)
WAVE 2 - 5.13(July 02) – 4.34 (MAR 03)
WAVE 3 - 4.34(MAR 03 – 15.17 (MAY 06)
WAVE 4 - 15.17(MAY 06) – 11.03(AUG 07)
WAVE 5 - (Failure ) 11.03(AUG 07) – 18.67(JUL 08)
Correction of Entire Rise :
Wave A - 18.67(JUL 08) – 9.11(DEC 08)
WAVE B – 9.11(DEC 08) – 18.63 still in progress
Internals of WAVE B : Zigzag
wave a : 9.11( DEC 08 ) – 16.22(JUNE 09)
wave b : 16.22 ( JUNE 09) – 12.44 ( JUL 09)
wave c : 12.44(JUK 09) – 18.63 still progress….
It looks like that we are in corrective wave c of Wave B as shown in the chart. As long as support of 17.00 intact we can see a potential rise towards 20 – 21.50 -23 for wave B completion
If support of 17 breaks decisively then it will a higher possibility that WAVE B will get completed at near-term high.
CONCLUSION: Short to medium term investors can hold long positions with stop loss of 17.00
Gold likely to touch USD1200 - USD1400 very soon;-
We assume that an major pattern is terminated at the SEP 1999 low at USD251 and new impulse has started from there on. (Prices are in USD/Oz)
Our preferred wave count is as follows:
WAVE I - 251(SEP 99) – 338(OCT 99)
WAVE II - 338(OCT 99 – 253 FEB 01)
WAVE III - 253(FEB 01 – 1152 still in progress
Internals of WAVE III
Wave 1 – 253 FEB 01 – 389 FEB 03
Wave 2 – 389 FEB 03 – 340 JULY 03
WAVE 3 340 JULY 03 – 988 JULY 06
WAVE 4 988 JULY 06 – 680 OCT 08
WAVE 5 680 OCT 08 – TILL 1152 still in progress
INTERNALS OF WAVE 5
Wave I - 680 OCT 08 – 1005 FEB 09
Wave ii - 1005 FEB 09 – 864 APR 09
Wave iii - 864 APR 09 – 1152 still in progress.
If the above count structure is true then the target area for wave iii is anywhere between 1200 – 1400.
The broader time frame channel value for wave 5 is at 1400 and projection target is 1400 – 1700
MARKET EDITOR :- NITESH JAIN JOIN US TO ROCK EVERY DAY
Sunday, November 22, 2009
NEXT WEEK OUT LOOK ON GOLD SILVER CRUDE WITH LONG TERM STRATERGY
Comex Gold (GC):-
Gold's uptrend continued last week and made another record high of 1153.4 then turned sideway. Initial bias remains neutral this week and some more consolidations cannot be ruled out. But still, short term outlook will remain bullish as long as 1125.8 support holds and further rise is in favor. Above 1153.4 will target 161.8% projection of 985.5 to 1072 from 1026.9 at 1166.9 next. Nevertheless, considering bearish divergence conditions in 4 hours MACD and RSI. Break of 1153.4 will indicate that a short term top is at least formed and should bring deeper decline. But even in such case, downside should be contained above 1072 resistance turned support and bring another rise.
In the bigger picture, as noted before, rise from 681 would likely develop into a set of five wave sequence with first wave completed at 1007.7, second wave triangle consolidation completed at 931.3. Rise from 931.3 is treated as the third wave. 61.8% projection of 681 to 1007.7 from 931.3 at 1133.2 is already met and next target will be 100% projection at 1258. On the downside, however, break of 1072 resistance turned support will argue that rise from 931.3 has completed and some medium term lengthier consolidations should be seen before the long term up trend resumes.
In the long term picture, as discussed before, rise form 681 is treated as resumption of the long term up trend from 1999 low of 253 after interim consolidation from 1033.9 has completed in form of an expanding triangle. The strong break of 1033.9 resistance affirms this case and should pave the way to 61.8% projection of 253 to 1033.9 from 681 at 1160 and then 100% projection at 1460 level. We'll hold on to the bullish view as long as 931.3 structural support holds.
Comex Silver (SI):-
Silver's rally extended to as high as 18.85 last week but turned sideway since then. Initial bias remains neutral this week and some more consolidations could be seen below 18.85 first. But after all, downside is expected to be contained well above 17.025 support and bring rally resumption. Above 18.85 will confirm that medium term rise has resumed and should target 19.55/21.55 resistance zone next.
In the bigger picture, whole medium term rebound from 8.4 is still in progress and should now be targeting 19.55/21.55 resistance zone. But after all, rise from 8.4 is treated as part of the long term, wide range, consolidation pattern that started at 21.44 back in Mar 08. Hence, upside is expected to be limited inside this 19.55/21.44 resistance zone and bring another medium term fall. On the downside, break of 16.12 will now be an important signal that silver has topped out in medium term already and will turn outlook bearish.
In the longer term picture, the up trend from 01 low of 4.01 topped out at 21.44 and subsequent price actions are treated as correction/consolidation to this up trend. Fall from 21.44 completed after drawing support form 8.5 key level. However, subsequent rally from 8.4 is not displaying a clear impulsive structure yet and hence, we'd prefer the case that it's just the second wave of the wide range consolidation pattern. Another medium term fall should still be seen for retesting 8.5 before completing the consolidation. Nevertheless, strong support is still expected at 5.45/8.5 support zone to conclude the consolidation.
Nymex Crude Oil (CL):-
Initial bias in crude oil remains on the downside this week for a test on 75.57 support first. Break there will confirm that whole choppy fall from 82.00 has resumed and should target 61.8% retracement of 65.05 to 82 at 71.52 next. On the upside, while some recovery might be seen, short term outlook will remain cautiously bearish as long as 80.51 resistance holds.
In the bigger picture, we'd continue to slightly favor the bearish case as long as 80.51 resistance holds. That is, a medium term top is formed at 82.0 on bearish divergence conditions in daily MACD as whole rise from 33.2 has completed. Break of trend line support (now at 70.14) will add more credence to this case and bring deeper fall to 58.32 cluster support (50% retracement of 33.2 to 82 at 57.60) for confirmation. However, break of 80.51 will indicate that price actions from 82.0 are merely consolidations in the medium term rise only. Further break of 82.0 will bring medium term rise resumption. However, as we expect such rise to conclude inside resistance zone of 76.77/90.24 (38.2% and 50% retracement of 147.27 to 33.2), focus will remain on loss of momentum and reversal signal even in case of another rise.
.In the long term picture, there is no change in the view that fall from 147.27 is part of the correction to the five wave sequence from 98 low of 10.65. While the rebound from 33.2 is strong and might continue, there is no solid evidence that suggest fall 147.27 is completed and we're still preferring the case that rebound from 33.2 is merely a corrective rise only. Having said that strong resistance should be seen between 76.77/90.24 fibo resistance zone and bring reversal for another low below 33.2 before completing the whole correction from 147.27
Nymex Natural Gas (NG):-
Natural gas dropped further to as low as 4.157 last week before recovering. The development argues that whole rebound from 2.409 is finished already. Hence, while some sideway trading might be seen initially this week, short term outlook will remain bearish as long as 4.734 resistance holds. Current decline is still expected to continue to 61.8% retracement of 2.409 to 5.318 at 3.52 first. However, break of 4.734 resistance will dampen this bearish view and turn short term outlook neutral again.
In the bigger picture, medium term fall from 13.69 is treated as part of the long term consolidation pattern that started at 15.78 back in 2005. The break of 55 days EMA, even though it's brief so far, suggests that rebound from 2.409 is possibly just a corrective rise only and may have completed after failing to sustain above 55 weeks EMA. Deeper decline could now be seen for a retest of 2.409 support first. On the upside, break of 5.318 resistance is needed to revive the case that Natural gas has bottomed in medium to longer term.
NOTE GOLD MARKET MOVING IN LINE WITH OUR EXPECTATION AS ALERT GIVEN ON 25TH AUG WHEN IT WAS TRADING NEAR 930-950$:-
GOLD LONG TERM OUTLOOK ;-GOLD AS FORMED A PENANT FLAG, SUGGESTING AN UPSIDE BREAKOUT IS CLOSE AT HAND. THE DIRECTION OF THIS PRICE GOING IN TO THIS PATTERN SHOULD BE THE SAME DIRECTION AS PRICE LEAVES THIS PATTERN WITH AN UPSIDE TARGET EQUAL TO THE LENGTH OF THE FLAG POLL. THAT GIVES AN UPSIDE PRICE TARGET OF 1325, WHICH IS PRECISELY THE SAME UPSIDE TARGET OF AN INDEPENDENT PATTERN WHICH WE HAVE BEEN SHOWING FOR THE WEEKS THE BULLISH AND SHOULDER BOTTOM. GOLD HAS ALSO NEARLY COMPLETED A VERY HEAD AND SHOULDER BOTTOM THE UPSIDE TARGET IS 1325 AND THE PROBABILITY OF REACHING THAT LEVEL RISES DRAMATICALLY WITH AN UPSIDE BREAKOUT ABOVE 1050. NOW STRONG SUPPORT FOR THIS VIEW AT 905 AND 880 AS LONG GOLD HOLDS THIS SUPPORT MARKET WILL BE IN BULLISH ZONE BUYING IN CORRECTIVE DIPS IS ONLY GOOD MARKET EDITOR NITESH JAIN
Gold's uptrend continued last week and made another record high of 1153.4 then turned sideway. Initial bias remains neutral this week and some more consolidations cannot be ruled out. But still, short term outlook will remain bullish as long as 1125.8 support holds and further rise is in favor. Above 1153.4 will target 161.8% projection of 985.5 to 1072 from 1026.9 at 1166.9 next. Nevertheless, considering bearish divergence conditions in 4 hours MACD and RSI. Break of 1153.4 will indicate that a short term top is at least formed and should bring deeper decline. But even in such case, downside should be contained above 1072 resistance turned support and bring another rise.
In the bigger picture, as noted before, rise from 681 would likely develop into a set of five wave sequence with first wave completed at 1007.7, second wave triangle consolidation completed at 931.3. Rise from 931.3 is treated as the third wave. 61.8% projection of 681 to 1007.7 from 931.3 at 1133.2 is already met and next target will be 100% projection at 1258. On the downside, however, break of 1072 resistance turned support will argue that rise from 931.3 has completed and some medium term lengthier consolidations should be seen before the long term up trend resumes.
In the long term picture, as discussed before, rise form 681 is treated as resumption of the long term up trend from 1999 low of 253 after interim consolidation from 1033.9 has completed in form of an expanding triangle. The strong break of 1033.9 resistance affirms this case and should pave the way to 61.8% projection of 253 to 1033.9 from 681 at 1160 and then 100% projection at 1460 level. We'll hold on to the bullish view as long as 931.3 structural support holds.
Comex Silver (SI):-
Silver's rally extended to as high as 18.85 last week but turned sideway since then. Initial bias remains neutral this week and some more consolidations could be seen below 18.85 first. But after all, downside is expected to be contained well above 17.025 support and bring rally resumption. Above 18.85 will confirm that medium term rise has resumed and should target 19.55/21.55 resistance zone next.
In the bigger picture, whole medium term rebound from 8.4 is still in progress and should now be targeting 19.55/21.55 resistance zone. But after all, rise from 8.4 is treated as part of the long term, wide range, consolidation pattern that started at 21.44 back in Mar 08. Hence, upside is expected to be limited inside this 19.55/21.44 resistance zone and bring another medium term fall. On the downside, break of 16.12 will now be an important signal that silver has topped out in medium term already and will turn outlook bearish.
In the longer term picture, the up trend from 01 low of 4.01 topped out at 21.44 and subsequent price actions are treated as correction/consolidation to this up trend. Fall from 21.44 completed after drawing support form 8.5 key level. However, subsequent rally from 8.4 is not displaying a clear impulsive structure yet and hence, we'd prefer the case that it's just the second wave of the wide range consolidation pattern. Another medium term fall should still be seen for retesting 8.5 before completing the consolidation. Nevertheless, strong support is still expected at 5.45/8.5 support zone to conclude the consolidation.
Nymex Crude Oil (CL):-
Initial bias in crude oil remains on the downside this week for a test on 75.57 support first. Break there will confirm that whole choppy fall from 82.00 has resumed and should target 61.8% retracement of 65.05 to 82 at 71.52 next. On the upside, while some recovery might be seen, short term outlook will remain cautiously bearish as long as 80.51 resistance holds.
In the bigger picture, we'd continue to slightly favor the bearish case as long as 80.51 resistance holds. That is, a medium term top is formed at 82.0 on bearish divergence conditions in daily MACD as whole rise from 33.2 has completed. Break of trend line support (now at 70.14) will add more credence to this case and bring deeper fall to 58.32 cluster support (50% retracement of 33.2 to 82 at 57.60) for confirmation. However, break of 80.51 will indicate that price actions from 82.0 are merely consolidations in the medium term rise only. Further break of 82.0 will bring medium term rise resumption. However, as we expect such rise to conclude inside resistance zone of 76.77/90.24 (38.2% and 50% retracement of 147.27 to 33.2), focus will remain on loss of momentum and reversal signal even in case of another rise.
.In the long term picture, there is no change in the view that fall from 147.27 is part of the correction to the five wave sequence from 98 low of 10.65. While the rebound from 33.2 is strong and might continue, there is no solid evidence that suggest fall 147.27 is completed and we're still preferring the case that rebound from 33.2 is merely a corrective rise only. Having said that strong resistance should be seen between 76.77/90.24 fibo resistance zone and bring reversal for another low below 33.2 before completing the whole correction from 147.27
Nymex Natural Gas (NG):-
Natural gas dropped further to as low as 4.157 last week before recovering. The development argues that whole rebound from 2.409 is finished already. Hence, while some sideway trading might be seen initially this week, short term outlook will remain bearish as long as 4.734 resistance holds. Current decline is still expected to continue to 61.8% retracement of 2.409 to 5.318 at 3.52 first. However, break of 4.734 resistance will dampen this bearish view and turn short term outlook neutral again.
In the bigger picture, medium term fall from 13.69 is treated as part of the long term consolidation pattern that started at 15.78 back in 2005. The break of 55 days EMA, even though it's brief so far, suggests that rebound from 2.409 is possibly just a corrective rise only and may have completed after failing to sustain above 55 weeks EMA. Deeper decline could now be seen for a retest of 2.409 support first. On the upside, break of 5.318 resistance is needed to revive the case that Natural gas has bottomed in medium to longer term.
NOTE GOLD MARKET MOVING IN LINE WITH OUR EXPECTATION AS ALERT GIVEN ON 25TH AUG WHEN IT WAS TRADING NEAR 930-950$:-
GOLD LONG TERM OUTLOOK ;-GOLD AS FORMED A PENANT FLAG, SUGGESTING AN UPSIDE BREAKOUT IS CLOSE AT HAND. THE DIRECTION OF THIS PRICE GOING IN TO THIS PATTERN SHOULD BE THE SAME DIRECTION AS PRICE LEAVES THIS PATTERN WITH AN UPSIDE TARGET EQUAL TO THE LENGTH OF THE FLAG POLL. THAT GIVES AN UPSIDE PRICE TARGET OF 1325, WHICH IS PRECISELY THE SAME UPSIDE TARGET OF AN INDEPENDENT PATTERN WHICH WE HAVE BEEN SHOWING FOR THE WEEKS THE BULLISH AND SHOULDER BOTTOM. GOLD HAS ALSO NEARLY COMPLETED A VERY HEAD AND SHOULDER BOTTOM THE UPSIDE TARGET IS 1325 AND THE PROBABILITY OF REACHING THAT LEVEL RISES DRAMATICALLY WITH AN UPSIDE BREAKOUT ABOVE 1050. NOW STRONG SUPPORT FOR THIS VIEW AT 905 AND 880 AS LONG GOLD HOLDS THIS SUPPORT MARKET WILL BE IN BULLISH ZONE BUYING IN CORRECTIVE DIPS IS ONLY GOOD MARKET EDITOR NITESH JAIN
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