Setup Condition for Gold (February 09 W1)
February/01/2009 22:53 Filed in: Commodity Monthly Analysis
Gold has good fundamental setup conditions for going SHORT. See weekly chart below.
Conditions Summary:
-AboySetup1 Commercial Buying Estimator: very low <10%
-AboySetup2 Commercials Index: very low <10%
-AboySetup3 Sentiment Index: high < 80%
-AboySetup4 Large Traders Index: very high > 90%
-AboySetup5 Small Traders Index: high > 60%
-AboySetup6 Fundamental Valuation Index : overvalued
-AboySetup7 Seasonal: around the highest point to buy
-Stochastic: overbought >80%
-ADX: decreases
Analysis:
-While the trend is bullish, Gold is setup for a big sell. Given the economic situation people is buying Gold (they think this is a good idea given the uncertainty in the dollar, etc). Sentiment is very high (i.e. brokerage newsletters, brokers, etc are recommending buying gold). Note, however, that the commercials are completely out of the market. It may take a few weeks but we need to be ready for SHORT entries.
Conditions Summary:
-AboySetup1 Commercial Buying Estimator: very low <10%
-AboySetup2 Commercials Index: very low <10%
-AboySetup3 Sentiment Index: high < 80%
-AboySetup4 Large Traders Index: very high > 90%
-AboySetup5 Small Traders Index: high > 60%
-AboySetup6 Fundamental Valuation Index : overvalued
-AboySetup7 Seasonal: around the highest point to buy
-Stochastic: overbought >80%
-ADX: decreases
Analysis:
-While the trend is bullish, Gold is setup for a big sell. Given the economic situation people is buying Gold (they think this is a good idea given the uncertainty in the dollar, etc). Sentiment is very high (i.e. brokerage newsletters, brokers, etc are recommending buying gold). Note, however, that the commercials are completely out of the market. It may take a few weeks but we need to be ready for SHORT entries.