Technically Precious with Merv

Riots on Thursday, gold moves lower. Riots on Friday, gold moves higher. Is there rhyme and
reason here? Thursday the students rioted. Friday the Muslim Brotherhood joined in the riots.
Yes, there was a difference. Now it’s a wait and see what the outcome will be to better guess
what next for gold.
GOLD
LONG TERM
For a very strict application of my point and figure criteria the long term P&F chart has now
broken on the down side for a bear market signal. However, we do still have a support at the
$1320 level so a move to the $1305 level would be required to break this final support.
Although the P&F criteria does give that bear signal I would be inclined to wait for the final
support break before pulling my hair out and going screaming, bear, bear. The price is close
enough so that it would only take another day or two to break the support, if it is so inclined.
We might as well wait for the break.
Going to our normal indicators we get somewhat of a similar message. Going towards the
bear but not quite there yet. Gold closed below its long term moving average line on Thursday
but bounced above the line on Friday. The moving average itself is still in an upward slope.
The long term momentum indicator remains in its positive zone but has been showing a
weakening trend for some time. It remains below its negative trigger line. The volume
indicator has been in a basic lateral path for some time now. Its trigger line has caught up with
the indicator and now the indicator is oscillating above and below the trigger line as the lateral
indicator trend continues. The trigger does remain slightly in a positive slope. With all that, the
long term rating has now started to decrease and is at a + NEUTRAL level, one step below the
bullish level.
INTERMEDIATE TERM
Well, if the long term is starting to diminish in its rating then the intermediate term should be
ahead of it. That is what we have. Gold closed below its intermediate term moving average
line and the line slope remains negative. The momentum indicator is still in its negative zone
although it has turned to the up side and is just below its neutral line. The indicator remains
below its negative sloping trigger line. As for the volume indicator, that remains just a hair
below its negative sloping trigger line. After four months of a topping process one can now say
that the topping has ended and we are in a downward trend. The intermediate term rating is
BEARISH. This is confirmed with the short term moving average line well below the
intermediate term line.
SHORT TERM
We were having a down week until Friday, when something excited gold. Now, it could be the
activities in the Middle East or it could be short covering by banks or institutions. Who Knows? (more)