9-24-2009
As regular viewers of our videos know, we are constantly adding new video products. Guests on our videos now 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 record both mid-day webinars and hold a live webinar once a week, typically on Tuesday at 12:30 PM CST. The Monday, Wednesday, Thursday and Friday Webinars are posted on my Research Page. If you don’t attend the live on Tuesday, you don’t see it.
In these webinars I cover approximately 20-30 charts with detailed technical chart analysis. Customers that trade through us will continue to be invited to attend live webinars. However, access to these webinars is not available to all non-customers. Whether live or recorded, these webinars will soon only be able to be viewed though your IraChart Software.
There is a difference between my videos and webinars.
I do not publish my Weekly Metal Report in Traders Media every week. I do however send one out weekly via e-mail. Read at the end of this report about our Futures Traders Kit and call in to be put on our e-mail list at 1-866-973-2077
Seasonal Story
The chart below is shown with permsission of the Moore Research Institute.
You can view their website by going to: http://www/mrci.com
I have done my best over these past reports to display where I think the market has been in terms of seasonality. As you can see, prices are now where I think they are highly vulnerable to a downside correction. This is a change.
Weekly Gold Chart
US Dollar
The US Dollar is seeing short covering. The rate of its break slowed yesterday. In fact prices reversed after Wednesday’s FOMC Annoucement. However, other than some normal short covering, not much looks overly long term bullish on this chart. A rally up to the 18-Day Moving Average of Closes might develop, but it would take more than that to turn this chart bullish
My guess is that the downtrend has stalled and some sideways action is going to develop. As the Stochastic Study, the graph on the bottom of the chart below displays, the “K” line displayed as the red line has a reading over 20. A close over 20 would imply that a challenge of the 18-Day Moving Average of Closes is likely. Intraday prices are high enough to have moved gotten he K-line over 20, which is a warning signal that the shorts are covering and that the downtrend is ‘being” neutralized.
The Swingline Study is bearish but Stochastics are in a warning stage that could mean more short covering is at hand. I do not see a change of trend and am looking for opportunities to recommend selling short in the near future.
Daily Gold Chart
Look at the above Stochastic reading. Admittedly I am writing this report early this morning and am not sure where prices will finish later today. However two important things have already taken place.
First, Stochastics are in the process of losing their embedded status. A close by the “K-line” under 80 today would be confirmation of this. In plain English this means the internal bearish strength of the uptrend has been lost. When the Stochastic reading first comes out of embedding, the initial price target is the 18-Day Moving Average of Closes which is 998.3. This has already been hit this morning. After a bit of sideways action, the next downside target looks to be the 970 level given that the Seasonal Trend is lower in October. Prices are likely to bounce around first, hopefully allowing us to get setup for a short side strategy.
Second, the Swingline Low of 1007.2 has been violated. The means the that the Swingline Study, displayed as the yellow line going through the above Bar Chart, has begun a new chart pattern of lower lows. Because the break of the market has exceeded 996.3, no matter what the rest of the day holds, the Swingline Low has been broken and the chart pattern has changed. A top has been seen.
Thus, the two “lines in the sand” have turned down.
First, the Swingline Study has turned down.
Second, the Stochastic Study has lot its embedded reading. This implies a test of the 18-Day Moving Average of Closes, which has also occurred with a $15 break in prices today.
Trade Recommendations
Last night I wrote readers of my Twice Daily Update to liquidate this morning their Gold Call Spreads at 10 or better. This was done this morning as my brokers have received their fills back on order places this morning. There orders were put in after 8:00 AM CDT. The spreads were established at $5.00 so they doubled in value. Great trade!
Now I am considering putting on a Bear Put Spread for a move down to the $970-950 level. These trades will be listed in my Twice Daily Updates.
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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.
