8-27-2009
Regular viewers of our videos know, we are constantly adding new video products. Guests on our videos include:
· Jake Bernstein of Jake Bernstein’s Weekly Market Letter on market trends
· Mark Leibovit of VR Trader.com on market timing
· And of course me, Ira Epstein
http://iraepstein.linngroup.com/videos.html?rand=0.021
I also now record mid-day webinars and holding live webinars at 12:30 PM CST on selective days. Customers are and will continue to be invited to attend. Each day’s webinar, whether live or recorded is posted on our website and can be accessed through your IraChart Software.
The Seasonal Chart Story
The chart below was supplied by The Moore Research Institute.
We are about to enter a phase where the “seasonal” move is to the upside. Historically, there has been a strong tendency to begin to rally August 30th and again mid September. The first phase often lasts most of September.
Monthly Gold Chart
Since last week not a lot has occurred. It looks as though the month of August will finish with a higher high than that of July, but prices have not taken out the month of June’s high, which I think is the trigger to breaking out of the current triangle pattern to the upside. Conversely, taking out the month of July’s low will create a downside breakout, but until prices close under the Weekly Moving Average of Closes, the breakout would be ruled false by me. Closes under that Moving Average and the question of higher prices comes into play, even with strong seasonals going into year end.
The chart formation is called a “pennant”. Some call this a “triangle”. I call it getting reading to breakout, one way or the other…soon.
Weekly Gold Chart
The weekly chart is now inline with the Monthly Chart is that both have made higher lows. Unless prices get under 931.5, the trend remains up. 931.5. I have done my best to show the “pennant formation” that is now evident on this chart. This formation won’t last long as the resistance line and support lines are narrowing prices in.
Daily Gold Chart
The negative in this chart is that prices continue to fight resistance at the 18-Day Moving Average of Closes. 950.6, which I am labeling as resistance.
The positive is that prices have narrowed in as I expected them to.
By using Call Option Spreads that those who follow my recommendations should be in, you are buying time as you establish a long position
Gold versus the Dollar
The Dollar continues to stay weak. This supports Gold prices. This relationship can and does change from time to time depending on “why” investors are selling Dollars or buying Gold. A lot of this have to has to do with “safe haven” investing, inflation expectations and so on.
Right now it appears that Gold is content to rally when the Dollar falls. Given there’s little in the way of inflation news to worry about, debt load of the Dollar and investors appetite to own riskier investments seems to be the main influences at work to support gold prices.
Conclusion
I decided two weeks ago to begin recommending that my customers establish Call Option Spreads in December Gold.
I continue to like the December Gold 1000 Call versus the December Gold 1025 Call Spread and the December Gold 1000 versus December Gold 1050 Call Spread.
These options don’t expire until late November, providing time and limited risk to catch what I hope becomes a sustainable uptrend.
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Disclaimer: This publication is strictly the opinion of its writer and is intended solely for informative purposes and is not to be construed, under any circumstances, by implication or otherwise, as an offer to sell or a solicitation to buy or trade in any commodities or securities herein named. Information is taken from sources believed to be reliable, but is in no way guaranteed. No guarantee of any kind is implied or possible where projections of future conditions are attempted. Futures and Options on Futures trading involve risk. In no event should the content of this market letter be construed as an express or implied promise, guarantee or implication by or from The Ira Epstein Division of The Linn Group, Inc or The Linn Group, Inc. that you will profit or that losses can or will be limited in any manner whatsoever. No such promises, guarantees or implications are given. Past results are no indication of future performance.
