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Weekend Market Analysis 29 Oct 2017

Oct 29th, 2017

Conclusion

International markets continue to inch up and the decision in the EU to continue with QE until halving the quota in 2018 finally added a bit of euphoria there also. But we are now entering into a post-QE world with the interest rate cycle turning up, and this will become increasingly threatening as recognition of gargantuan total global debt and the debasement of money is fully understood. Political jitters continue in the EU with Spain this week and probably more in Eastern Europe soon.

The US$  index finally managed to increase through resistance at 94.2 to close at 94.82 from a high of 95.1. It has therefore broken up through the neckline of an inverted ‘head & shoulders’ pattern which is likely to take it higher by the depth of the head to about 97. This is negative for gold which is now likely to drift lower, probably towards a 6 month cycle low in Dec 2017.

The US interest rate hike in Dec 2017 is already priced in and this may end with gold continuing the next leg up in Jan 2018 just as happened in Jan 2016 and Jan 2017. The general equities worldwide continue towards the next collapse for a variety of reasons, one of which is described in this document.

 

US$

The US$ rally broke up strongly through resistance at 94.2 on the index and is likely now to be tested at 50-Wema and thereafter at 97.4 which is above the neckline of the inverted ‘head and shoulders’ pattern by the depth of the head. The oscillators are moving up to support this.

 

 

The Dollar daily chart illustrates the penetration through the neckline of the inverted ‘head and shoulders’ pattern and the likely increase towards 97.4. However, in this case, the oscillators have already moved up to higher levels and are perhaps not as encouraging.

 

 

Gold

The long term chart illustrates the gold price re-testing the breakout through long term resistance which may now be invalidated with the stronger Dollar. It would seem gold is likely to drop into a 6 month cycle low before the next leg up in Jan 2018.

 

 

The gold daily chart illustrates the price retreat this week closing with a double bottom and some support at 200-Dema. The region of support is lower down and gold is likely to drop further to a 6 month cycle low in Dec 2017 which is also supported by short term oscillators moving down.

 

 

GDX US miners ETF

GDX price retreated further this week away from resistance and is likely to now drop below support. A region of strong support is at 21.0 and the oscillators have also dropped to low levels which might provide some support.

 

 

DUST US Gold Miners bear index

The inverse picture in the US Gold Miners Bear Index (Dust) indicates a break up through resistance (blue diagonal) with a strong region of resistance at 200-Dema. The oscillators are mixed suggesting further strength before weakness, supporting lower gold prices.

 

 

Silver

Silver dropped down below 200-Dema and is set to move down further towards a 6 month cycle low in the region of support. The oscillators support further declines.

 

 

General Equities (Dow Jones)

There is nothing new in international equity markets which continue to advance, moving ever close to the next collapse for a variety of reasons described in earlier narratives. One such reason is in technical analysis of the ‘Jaws of Death’ pattern which indicates a potential collapse of 75% in the Dow Jones index. This pattern has developed over the past 18 years into a ‘monster’ which is about to collapse, and which has been described as the ‘Coming Economic Ice Age’.

 

 

A long term chart of the Dow ever since the creation of the US Federal Reserve in 1913 illustrates the big collapses in history, providing a perspective of the coming 75% collapse.

 

 

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