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6-25-2009
As regular viewers of our videos know, we are constantly adding new videoproducts. 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
? Gordon Linn's insights on trading
? And of course me, Ira Epstein
http://iraepstein.linngroup.com/videos.html?rand=0.021
Seasonal Story
The chart below was supplied by The Moore Research Institute.
The Seasonal Gold Chart above displays gold price movement in two ways. It goes back15-years to get a more current average of prices and back 35-years showing a longeraveraged time frame. Historically speaking, prices trends are fairly erratic in summermonths. It's at the end of summer that uptrends often grab hold.
That having been said, gold's tendency is not to get strong now. It does so often at theend of summer.
Fed Holds Rates for "Extended Period of Time"The FOMC Meeting and accompanying Fed Statement has come and gone. The Fed saidit is going ahead with the agency purchase of Treasury instruments it has committed toand that for the foreseeable future it sees the need to hold interest rates steady. It didnot commit to buying more instruments than it already has announced.
There were no surprises in the Fed Statement.
US Dollar
The US Dollar seems to right now floundering. It's simply whipsawing around, caught ina trading range of 81.90 and 78.83. Over the past 5-days there have been two falsebreakouts in the Dollar, one to the downside and the other to the upside. Neither havebeen able to follow through.
The Swiss National Bank intervened yesterday to drive down the value of the SwissFranc. Intervention in and of itself at best cushions trends, it rarely changes them.However, intervention does imply trend interference, which puts traders on notice.
Iran
Iran's election did not have the desired result many had hoped for, at least on thesurface. Behind the scenes I think many are jumping for joy. Given Iran's internalproblems, it's likely that the Iranian Government will have to turn its attention inward.As such, the mischief they cause influencing outside groups that threaten other Arabstates will most likely take a back seat. More funds will most assuredly be spent ontightening down the government's grip on its populace. This leaves less to be spentsupporting renegade groups.
Iran's influence has been tested. They have lost face in many parts of the world butdon't expect the US or other Western Nations to do much more than complain aboutwhat is going on.
My take on things is that the Iranians that are rebelling are not yet strong enough tooverthrow the ruling government or clerics. If the market thought more than I do, Iwould assume it would have shown up in more of a rally in gold's price. It hasn't. Sinceit hasn't, this prop for gold prices is at least for the being, neutralized.
Couple this with an ongoing stabilizing of world economies, a summer time mentalityand lack of inflationary readings and further props to higher gold prices at this time aresimply not there. Eventually inflation will become a serious issue, but not today.
China
China has recently made it know that it is interested in accumulating more goldreserves. This most likely means less buying by China of US debt instruments. Again,this news is in the market and prices aren't rising appreciably.
Daily Chart
Last week I wrote that I expected to see a small upward price correction take place. Notone that will have much upside to it. I went on to say that I thought the upcoming rallywould setup another short sale opportunity. I still do.
Let's take a look at a Daily Chart of August Gold to see why.Let's start out by looking at the Stochastic Study on the bottom of the chart.
Stochastics are made up of two lines. A "K" and a "D" line. The "k" line is displayed asthe red line, "D" line as the yellow line. The lines are set between an axis reading of 20up to 80. The Stochastic formula is set to have the red line whip around the yellow line.
When both lines are under 20 or over 80, they are "embedded". As long as they stayembedded, in theory at least the trend should be bearish. This ends when the red linecloses over 20.
The red line came out of its embedded status yesterday. When this occurs prices oftenmove up to... [download for more]
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