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Gold Up-Trend Continues

By Colin Twiggs
February 26, 2009 2:00 a.m. ET (6:00 p.m. AET)

I am trialing a new format of shorter, more frequent newsletters and would appreciate feedback as to whether you find them convenient or not. These extracts from my trading diary are for educational purposes and should not be interpreted as investment or trading advice. Full terms and conditions can be found at Terms of Use.

Gold

Spot gold is retracing after respecting resistance at $1000 indicating an orderly up-trend rather than panic buying — and is expected to test the band of support between $900 and $930. Respect of support is likely and would signal another test of $1000. Failure would penetrate the rising trendline, warning of a down-swing to test $700. In the longer term, breakout above $1000 would offer a target of $1200; calculated as 900 + ( 1000 - 700 ).

Spot Gold

Source: Netdania

Crude Oil

West Texas Crude broke short-term resistance at $40 per barrel and is headed for a test of primary resistance at $50. Gasoline stocks are falling, but crude inventories are at their highest level since July 2007 (WSJ) — making it unlikely that the primary trend will reverse anytime soon. In the long term, reversal below $33 would warn of a down-swing to test the 2003 low of $20. The target is calculated as 35 - (50 - 35).

Crude Oil - West Texas Intermediate Light

Source: Netdania



...For the record, I favor nationalization and swift privatization. We cannot afford a repeat of Japan's zombie banks.

~ John Mauldin

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