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Gold and silver fall
By Colin Twiggs
September 17th, 2014 9:00 p.m. EDT (11:00 a.m. AEST)
Advice herein is provided for the general information of readers and does not have regard to any particular person's investment objectives, financial situation or needs. Accordingly, no reader should act on the basis of any information contained herein without first having consulted a suitably qualified financial advisor.
Research & Investment: Performance
ASX200 Prime Momentum strategy returned +22.64%* for the 12 months ended 31st August 2014 compared to +14.41% for the benchmark ASX200 Accumulation Index.
The S&P 500 Prime Momentum strategy had a good month, gaining 5.98% in August. The strategy has been running live for ten months, since November 2013, and returned 15.46%* for the period, compared to 15.96% for the S&P 500 Total Return Index. A sell-off of momentum stocks affected performance since April, but macroeconomic and volatility filters indicate low risk typical of a bull market and we maintain full exposure to equities.
* Results are unaudited and subject to revision.
Gold & Silver
Gold respected the new resistance level at $1240 after a brief retracement, confirming a primary down-trend. Declining 13-week Twiggs Momentum below zero strengthens the bear signal. Expect further support at $1200/ounce, breach would add further confirmation.
* Target calculation: 1200 - ( 1400 - 1200 ) = 1000
Silver is testing primary support at $18.50 per ounce. Breach of support would signal a down-trend and strengthen the bear signal for gold. Respect is unlikely, but would suggest further consolidation.
Interest Rates and the Dollar
A rising Dollar and rising Treasury yields both put downward pressure on gold.
The Dollar Index is testing resistance at the 2013 high of 84.50. Rising 13-week Twiggs Momentum above zero signals a primary up-trend. Reversal below 81.50 is most unlikely. Upward breakout would offer a long-term target of 89*.
* Target calculation: 84 + ( 84 - 79 ) = 89.00
The yield on ten-year Treasury Notes broke resistance at 2.50 percent and is now consolidating at 2.60. Follow-through above 2.65 would signal an advance to 3.00. Respect would signal a decline to 2.00 percent*. 13-Week Twiggs Momentum recovery above zero would suggest a primary up-trend.
* Target calculation: 2.65 + ( 2.65 - 2.30 ) = 3.00
Why Scots want independence:
Scots, wha hae wi Wallace bled,
Scots, wham Bruce has aften led,
Welcome tae yer gory bed,
Or tae victorie.
...By Oppression's woes and pains,
By your sons in servile chains!
We will drain our dearest veins,
But they shall be free.
Lay the proud usurpers low,
Tyrants fall in every foe,
Liberty's in every blow!
Let us do or dee.
~ Robert Burns, Robert Bruce's March To Bannockburn (1793)
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