Adam Hewison: What A Difference A Day Makes

The song goes like this; “What a difference a day makes....” Gold, sharply lower on heavy profit taking and liquidation. Equities, sharply higher as all the problems in the world are solved. The U.S. dollar has a hiccup. Crude oil up on new demand? All this while the world waits for President Obama’s speech tomorrow evening. Here’s a rhetorical question for you, how many cans can you kick down the road at the same time? Well, if you’re a politician you become pretty adept at kicking as many cans as you want down the road.

The negative engulfing line for gold which we discussed yesterday was confirmed today. This market has now pulled back over $100 in just the last 2 days. To say the market is volatile, would be an understatement. With our long-term and intermediate term trade triangles still intact we have to believe that the trend is still higher. Certainly the $1900 an ounce level is resistance for gold at the moment.

The question is where will support come in on the downside? Right now we expect that the $1750 area all the way down to $1700 should be support for this market. Looking at the market visually it would appear as though we have possibly put in a double top. This will only be confirmed with a close below the $1750 level. Intermediate and long term traders should maintain long positions with the appropriate money management stops in place.

Monthly Trade Triangles for Long Term Trends = Positive
Weekly Trade Triangles for Intermediate Term Trends = Positive
Daily Trade Triangles for Short Term Trends = Negative
Combined Strength of Trend Score = +55

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