Fed QE3 talk will support technically strong gold

August 27, 2012 04:40 AM
Daily Market Analysis (SHORT TERM) Monday 08/27/2012

 

KEY TERMS

OVB      Outside Vertical Bar

VRCB   Volatility Reduced Compression Bar

 

ENERGIES

 

Brent Crude Oil (October):

  • Short Term Trends are bullish.
  • Confirmation of a bottom with a range violation on 07/27/12 @ 106.19. Confirmation of a bottom with a close violation on 07/27/12 @ 106.47. Upside Target = 114.37 – 118.06.
  • C < LOHB (Close Below Low High Bar) generated on Friday. Possible confirmation of a top with a range violation @ 112.99. Possible confirmation of a top with a close @ 112.99 or lower.
    • October Brent Crude traded to within 13 ticks of the weekly lows on Friday as suggested in Thursday evenings report after a large decline to end the week lower for the first time in 4 weeks.
    • After forming a DOUBLE VRCB bar on the weekly charts since bumping up against our resistance zone beginning at 116.70, Brent should make a move lower down as low as 108.27 over the coming weeks.
  • Projected Daily Range: 2.02
  • Projected Weekly Range: 4.32
  • Projected Monthly Range: 13.99

 

WTI Crude Oil (October):

  • Short Term Trends are bullish.
  • Confirmation of a bottom with a range violation on 08/15/12 @ 94.15. Confirmation of a bottom with a close violation on 08/15/12 @ 94.33. Upside Targets = 98.20 – 101.26.
  • Possible confirmation of a top with a range violation @ 95.40. Possible confirmation of a top with a close @ 95.40 or lower.
    • October WTI Crude finished the session virtually unchanged after rebounding from trading near the week’s lows to close just slightly below the daily mid-range.
    • Friday’s price action suggest that this market should actually break lower on Monday and see additional selling come into the market until it reaches 93.56 where it may again find some Short Term support after trading just 9 ticks through the extended Q3 objective of 98.20.
  • Projected Daily Range: 1.86
  • Projected Weekly Range: 3.76
  • Projected Monthly Range: 11.71

 

Natural Gas (October):

  • Short Term Trend is bearish.
  • Confirmation of a bottom with a range violation on 08/24/2012 @ 2.897. Confirmation of a top with a close violation 08/02/2012 @ 2.926. Upside Targets = 2.947 – 2.989.
  • Bearish AOVB (Almost Outside Vertical Bar) generated on Friday. Possible confirmation of a top with a range violation @ 2.721.
    • October Natural Gas saw one of its most volatile trading weeks in quite some time last week and was exacerbated on Friday as it made new highs for the week followed by a sharp decline to close at its lowest level since late June.
    • As mentioned in all of last week’s reports, the rally in prices was not expected to be sustainable and traders should look for this market to break through last week’s low of 2.722 on towards the monthly downside objective of 2.612 and then the Q3 target of 2.563.
  • Projected Daily Range: .147
  • Projected Weekly Range: .239
  • Projected Monthly Range: .629

 

 METALS

 

COMEX Gold (December):

  • Short Term Trends are bullish.
  • Confirmation of a bottom with a range violation on 08/17/12 @ 1622.10. Confirmation of a bottom with a close violation on 08/20/12 @ 1623.00. Upside Targets = 1644.20 – 1657.20.
  • Inside compression day generated on Friday.
    • December Gold settled up a tick on Friday in a thin trading session as the market once again had its entire daily range above the daily Resistance Bollinger Band following its best weekly gain in nearly 3 months.
    • Gold should continue to advance higher this week amid speculation of new easing measures by the FED prompting inflation fears which should lead the precious metal higher to our Q3 target of 1721.90.
  • Projected Daily Range: 18.70
  • Projected Weekly Range: 42.10
  • Projected Monthly Range: 105.00

 

CURRENCIES

 

Euro FX (September):

  • Short Term Trends are bullish.
  • Confirmation of a bottom with a range violation on 08/14/2012 @ 1.2379. Confirmation of a bottom with a close violation on 08/21/2012 @ 1.2451. Upside Targets = 1.2623 – 1.2699.
  • C < LOHB (Close Below Low High Bar) generated on Friday. Possible confirmation of a top with a range violation @ 1.2482. Possible confirmation of a top with a close @ 1.2482 or lower.
    • The September Euro FX settled back lower on Friday after Thursday’s VRCB led to a round of volatility selling due to the Short Term overbought nature of the market.
    • Although the Euro has been the worst performing FX market of the year, it could see a big boost another 2 points higher after some modest selling early in the week to as high as 1.2797 over the next few weeks.
  • Projected Daily Range: .0089
  • Projected Weekly Range: .0211
  • Projected Monthly Range: .0601

 

INDEXES

 

E-Mini S&P (September):  

  • Short Term Trends are bullish.
  • Confirmation of a top with a range violation on 08/23/12 @ 1404.00. Confirmation of a top with a close violation on 08/23/12 @ 1400.00. Downside Targets = 1387.50 – 1375.50.
    • The September S&P’s rallied hard to end the week on Friday after generating new 9 session lows and barely avoided generating an OVB week.
    • Friday’s hard rally concluded a very choppy week of back and forth price action and while all signs point to technical failures looming ahead at such elevated pricing, the trends are still decisively bullish and this market could continue to move higher to 1446.00 before finally exhausting all the buying pressure.
  • Projected Daily Range: 15.75
  • Projected Weekly Range: 37.50
  • Projected Monthly Range: 95.75
About the Author

Parrish Hicks Capital Research is a trading and technical analysis firm that specializes in Energy and Metal commodity futures. The two founders, Jim Parrish and Kris Hicks, have a combined 38 years’ experience in the commodity business and in 2011 accurately forecasted both $25 moves to the downside in May and July and the $25+ move to the upside in October. They also called the all-time high day for Gold on September 6, 2011 and forecasted a projected downside target of 1528.10 in March 2012.