Gold and commodities find support

By Colin Twiggs
January 24th, 2013 2:00 a.m. ET (6:00 p:m AET)

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A look at the long-term (monthly) chart shows gold undergoing a correction before encountering support at $1650/ounce. Recovery above $1700 would re-test resistance at $1800, the higher trough suggesting resumption of the primary up-trend. Breakout above $1800 would confirm. A 63-day Twiggs Momentum trough close to the zero line would strengthen the signal, while reversal below zero would suggest that the 5-year bull-trend is over and a test of primary support at $1500 likely.

Spot Gold

Commodity Prices are a good predictor of stock market performance. Dow Jones-UBS Commodity Index retreated from 150 but support around 140 would indicate another attempt at a breakout — and recovery above 144 would strengthen the signal. Rising Twiggs Momentum suggests a primary up-trend but only breakout above 152 would confirm.

Dow Jones-UBS Commodity Index

Regard your soldiers as your children, and they will follow you into the deepest valleys. Look on them as your own beloved sons, and they will stand by you even unto death!

~ Sun Tzu: The Art of War
(This may seem a strange choice of quote but investors/traders should conserve their capital in the same way as a general conserves his troops. You cannot make gains without taking risks, but do not take unnecessary risks or expose your entire "army" to destruction. Always be capable of withdrawing with your main force intact.)