Gold breaks support
By Colin Twiggs
October 2nd, 2013 4:30 a.m. EDT (6:30 p:m AET)
Spot gold broke support at $1300/ounce, indicating a test of the primary level at $1200/ounce. Follow-through below $1270 would confirm. Completion of a 13-week Twiggs Momentum peak below zero would be a strong bear signal.
The Dollar Index is consolidating below the recent primary support level of 80.50. Follow-through below 80 would confirm the primary down-trend. The 13-week Twiggs Momentum peak at zero also signals a down-trend. Recovery above 81 is most unlikely, but would warn of a bear trap.
A falling dollar would boost gold prices.
The yield on ten-year Treasury Notes found short-term support at 2.60 percent. Recovery above 2.70 would signal an advance to 3.40 percent. Failure of support, however, would warn of a test of 2.40 percent.
Rising treasury yields would raise the opportunity cost of holding precious metals, exerting downward pressure on prices.
* Target calculation: 3.00 + ( 3.00 - 2.60 ) = 3.40
Nymex light crude broke support at $103/barrel and its rising trendline, warning of a test of medium-term support at $98/barrel. The wider spread with Brent Crude is an indication of continuing tensions over Syria which threaten supply.
Commodity prices continue to fall, with the Dow Jones-UBS Commodity Index headed for another test of primary support at 124 despite a resilient Shanghai Composite Index. Recovery above 130 is unlikely at present, but would confirm the earlier double-bottom reversal and a primary up-trend.
* Target calculation: 130 + ( 130 - 125 ) = 135
Markets are fundamentally volatile. No way around it. Your problem is not in the math. There is no math to get you out of having to experience uncertainty.
~ Ed Seykota