Bottom or Bear Flag?Precious Metals, Today's Focus
The markets are highly emotional and started Wednesday strong before ending the day in the red. The Dow Jones Industrial Average closed down 0.6%, while the S&P 500 slid 0.8%. The Nasdaq Composite ended the day down over 1%. Gold spent much of the day in positive territory, while Silver took clues from Copper, and futures prices seemingly folded into the close.
Stock futures are pointing lower as investors await initial claims data today: 241k Exp vs. 249k last week. JPMorgan now sees a 35% chance the US economy will enter a recession this year. JPMorgan sees the Fed cutting rates by half a percentage point in September and November. Traders await wholesale inventory figures and a 30-year bonds auction of $25 billion.
Today's Economic Focus
Unemployment Claims - Forecast 241k Previous 249k
(The number of individuals who filed for unemployment insurance for the first time during the past week)
Final Wholesale Inventories m/m - Forecast 0.2% Previous 0.2%
(Change in the total value of goods held in inventory by wholesalers)
30-y Bond Auction
FOMC Member Barkin Speaks
Gold
Technicals - (December - Z)
Gold futures continue to remain constructive as futures see a series of higher lows on the daily chart. Futures see their first major support at the 50 DMA at 2422.6, followed by psychological support at 2400 down to the trend reversal point at 2398.2. Futures will need to retrace the August 6 highs of 2459.5 in order to attack the bull trade trigger at 2482.0
Gold (Dec)—Daily stochastics are correcting, indicating a lack of fresh buying. DMI + remains narrowly over DMI -, indicating the market remains more neutral in posture. The average true range (ATR) is 42.0 per day.
For Trend Traders
Bias: Neutral/Bullish
Resistance: 2482.0*** (Bull trade Trigger), 2500*** (Psychological), 2537.7*** (Contract Highs)
Pivot: 2454-2450***
Support: 2422.6 (50 DMA)***, 2400**(Psychological), 2398.2*** (Bear Trend Trigger), 2345-2350***
Silver
Technicals (September - U)
Silver futures bounce in the overnight session after testing the 200 DMA at 26.58. The Gold/Silver ratio continues to uptick with 90:1 and will most likely need a bounce in copper inorder to play catch up on the Gold market.
The first pivot is at 28, followed by the first resistance at 29.08. Traders must see a move above the 50 DMA at 29.94 to trigger ETF inflows and momentum traders.
Silver (Sept) - Daily stochastics are correcting back into oversold territory. DMI - is above DMI +, and the ADX is rising, indicating that the market is back in a correction phase. The average true range (ATR) is 97 cents per day.
For Trend Traders
Bias: Bearish/Neutral
Bear Trade Trigger: 27.975
Bear Trade Trigger Date: July 25
Trend Reversal Point: 29.85
Resistance: 28.00**29.08*** (July 25 High), 30.00***(Psychological), 29.91*** (50 DMA), 29.85** (Trend Reversal Point), 32.00-32.50****
Pivot: 28.00
Support: 26.58**** (200 DMA)
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Disclaimers:
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