From the Trading Desk
Gold is trading lethargically around yesterday’s closing price with traders on the sidelines ahead of tomorrow’s US non-farm payrolls figures. Volume on the electronic exchange was unimpressive with only 105,000 lots trading today. In the European session, the European Central Bank said that it will no longer accept Greek bonds in return for funding. This essentially means that the ECB will allow Greek banks to fail if the government does not fulfill its obligations outlined in the previous rescue package. The euro was hit lower on this news but later recovered after the release of positive German data. Gold, trading without its own conviction, followed the euros path lower and then recovered with it as well.
The yellow metal has put in a triple bottom at $1,255 over the last three trading days and is very much range bound. The upper end of this range is coming in at $1,285 and US non-farm payrolls figures tomorrow may very well be the catalyst to break it out of this area.
Silver dipped below $17 today but recovered along with the euro and gold to finish its session at $17.20. Like gold, it remains range bound but should have strong bids materialize ahead of the convergence of its 50 and 100 day moving average at $16.70 and $16.76, respectively.
GDXJ and JNUG turned to a green arrow up on the weekly today. Yesterday I had said “The final trend though was JNUG up and JDST down. We’ll see if that continues as it has so far after hours. Somehow in my gut we may take off to break high in gold and silver.” As it turns out it didn’t for gold and silver the physical metal, but it did for the mining stocks. GDX and NUGT just need to go green on the weekly to have a little more conviction to stay long the miners. SLV dropped in score a little bit today with GLD doing the same. JDST is in full red mode which should tell you something (don’t be in it).
Gold just couldn’t break down to a lower low today so I still need to see a move above $1,275 to be convinced to add to mining ETF longs. Under $1,255 and JDST will be the play. Of course money can be made in between, but deciphering the trend isn’t easy when you have the ups and downs so you look for a breakout.
TNA finally got a breakout above 80 that I have been wanting to see and went above 81 for a bit before settling just above 80. The next stop if we are to stay bullish is 86 and if you are trading it long, simply move your stops higher. While this ETF can move 3-4 points a day, I wouldn’t let it slip past 76 right now and be stuck wondering did the top come in. I would stay long and strong as long as it is above 80 and keep moving the stop up 2 points each 2 points it moves higher. Take profit when you can and don’t get too greedy. News can change the tone of TNA and the markets, but the U.S. still is considered a safe haven. If it does break down below 76, I would consider TZA but I am still somewhat bullish for now and want to see if we can reach new highs. Watch for unemployment numbers tomorrow to keep stops or enjoy more of the ride. 230k and 5.6% are the expected numbers released at 1:30pm EST.
UWTI which got slammed yesterday had a great day today as DWTI got slammed before recovering 12 points. DWTI is still red and UWTI still green on the daily and weekly, but we may get another nice pop on DWTI if this intraday reversal has any legs (oil going lower and DWTI higher). I lean that way, but trade what’s in front of you looking for the higher high. I will remind you again that DWTI is VERY volatile and it should be paper traded if you are not experienced in playing these lower volume high range ETFs. Even for those who are experienced I would use smaller shares.
RUSL gapped up and really that tradeable today. RUSS gapped down and there was no good trading range that presented anything. Look for the break of one of these and follow it. Should be good for a point at least and yes, I still like RUSL between the two with all the issues in Russia (Ukraine, S&P downgrade to junk).
DGAZ is all arrows green now with the daily, weekly and monthly. Looking at the chart it could experience a double top, but could also break out. UGAZ hit a 52 week low. The knife is as sharp as ever with it.
Next report will be Sunday. Enjoy your trading tomorrow and your weekend!
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Doug Eberhardt is a 28 year financial services veteran and precious metals broker selling gold and silver at 1% over wholesale cost. Doug has written a book to help investors understand how gold and silver fit into a diversified portfolio, how to buy gold and silver, and what metals to buy. The book; “Buy Gold and Silver Safely” is available by clicking here Contact phone number for Buy Gold and Silver Safely is 888-604-6534
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