Comex Gold :-
Gold soared to new record high of 1227.5 last week but failed to sustain above 1200 level and dropped sharply to close at 1162.3. While a short term top is no doubt in place at 1227.5, it's still a bit early to call for reversal yet. We'll stay neutral for the moment and expects some sideway trading between 1130.1 and 1227.5 first. There could still be at least one more rise in gold towards medium term projection target at 1258 before turning into medium term consolidation. However, sustained break of 1130.1 will suggest that rise from 931.3 has completed and deeper correction could then be seen towards 55 days EMA (now at 1092.9).
In the bigger picture, rise from 681 is expected to 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 and there is no confirmation of completion yet. Such rally is still expected to continue towards 100% projection of 681 to 1007.7 from 931.3 at 1258 next. However, decisive break of 1130.1 support will argue that rise from 931.3 has completed ahead of 1258 target and some deeper pull back could be seen to 1026.9/1072 support zone, or even further to retest 1000 psychological level, before resuming the long term up trend.
In the long term picture, 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. Next long term target is 100% projection of 253 to 1033.9 from 681 at 1460 level. We'll hold on to the bullish view as long as 931.3 structural support holds
Comex Silver ;-
After surging to as high as 19.50 initially last week but weakened sharply since then. A shot term top is at least formed at 19.50 and the question is how important this top is considering that mentioned target of 19.55/21.44 resistance zone was just missed. In any case, initial bias is on the downside this week as long as 19.00 minor resistance zones. Deeper decline should be seen towards 17.70 support first. Break there will indicate that whole rise from 16.12 has finished too and will pave the way to retest this support. On the upside, above 19.00 will flip intraday bias back to the upside and suggest that recent rise in silver is possibly still in progress for 19.55/21.44 resistance zone before conclusion.
In the bigger picture, there is no confirmation of medium term topping in Silver yet but the risk of reversal is growing significantly. Firstly, as note before, whole medium term rise from 8.4 is 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. This 19.55/21.44 resistance zone is just missed. Secondly, strong resistance was seen in the upper trend line and silver has failed to sustain above it last week. Thirdly, upside momentum is clearly diminishing with bearish divergence conditions in daily MACD and RSI. Fourthly, rise from 12.435 has apparently completed a five wave sequence at 19.50.
Therefore, while another rise cannot be ruled out, we'll be cautious on reversal signal even in case of another rise and believe that upside potential is limited, at least in near term. On the downside, sustained break of 55 days EMA (now at 17.46) will be an early signal that rise from 12.435 has completed and break of 16.12 support will confirm. This will also be an important signal that whole rise from 8.4 has completed and we'll then turn focus to 12.435 support for confirmation.
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 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 :-
Crude oil's rebound from 72.39 was limited at 79.04 and well below mentioned 80.51 resistance. Crude oil then weakened again with a break of 75.18 minor support on Friday. The development firstly indicates that recovery from 72.39 has completed and thus flip the bias back to the downside for a retest on 72.39 initially this week. Secondly, there is no indication that choppy fall from 82.0 has finished and thus more downside will remain in favor in near term. Break of 72.39 will target trend line support at 71.16 next.
In the bigger picture, question remains on whether crude oil's medium term rebound from 33.2 has completed at 82.0 already and the outlook is quite mixed so far. Nevertheless, now, as long as 79.04 resistance holds, fall from 82.0 will remain in favor to continue and we'd slightly prefer the bearish case that crude oil has topped out at 82.0 already. Sustained trading below the trend line support (now at 71.16) will add more credence to this case and target 58.32 cluster support (50% retracement of 33.2 to 82 at 57.60) for confirmation.
On the upside, though, above 79.04 resistance will suggest that recent choppy price actions from 82.0 are merely consolidations in the medium term rise from 33.2. In such case, the rise from 33.2 might be ready to resume for another high above 82.0. 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 in this case.
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 ;-
After failing to break through 5.318 resistance, natural gas fell to as low as 4.432 before recovering mildly towards the end of the week. After all, it's still staying in range of 4.157/5.138 and thus, there is no change in the overall outlook. That is, recent price actions are merely consolidations to the rebound from 2.409. Hence, while another fall cannot be ruled out, downside is expected to be contained by 4.157 support. On the upside, above 4.90 minor resistance will flip bias to the upside for a retest of 5.318 resistance first and break will target 61.8% projection of 2.409 to 5.318 from 4.157 at 5.955 next.
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 and might have completed at 2.409 already. Rise from 2.409 should not be completed yet and we would continue to anticipate an upside break out of the recent range of 4.157/5.138 eventually. Above 5.318 will target 38.2% retracement of 13.694 to 2.409 at 6.72 and beyond. Nevertheless, break of 4.157 support will dampen this bullish case and turn outlook mixed again
