You have to follow the link at the bottom for charts and his opinions on gold and other shiny metals. This man is a very smart guy. QB
Merv’s http://preciousmetalscentral.com
Precious Metals Central
Technically Precious with Merv
For week ending 29 July 2011
Well you can’t much argue with new highs but you can be cautious. Something just doesn’t
seem right, at least not from the short term, although the long term continually looks great for
gold (and silver).
OIL
I know this is a commentary on the precious metals (gold and silver) but I thought I’d just throw
in a chart of oil. It seems to be ready for a major downside break.
I don’t intend to go into a detailed technical analysis of oil here but will just briefly comment on
a couple of chart patterns that are easily spotted by a simple technician.
The price of oil (Texas Light Sweet Crude) seems to be trapped inside two separate patterns,
a wide upward sloping channel and a bearish Decelerating FAN trend lines.
From the channel perspective oil is very near its lower support line. A breach of this line is a
serious bearish indicator. On the other hand oil could just bounce off the support and head
back towards the upper resistance line. Take your pick.
As for the FAN trend lines, usually the breaking of the second FAN trend line tells me that the
trend had ended but it requires the breaking of the third FAN trend line to confirm. Since the
Merv’s http://preciousmetalscentral.com
Precious Metals Central
establishment of the third FAN trend line, from the low in mid-May 2010, the market action has
remained trapped within the confines of the second and third FAN lines. As you can see, the
third FAN trend line is also the lower support line from the channel. Again, a breaking of this
support line is also now a confirmation of the bear per my FAN Principle. So, we are in nail
biting territory until the smoke clears, one way or the other. Watch a move below the $90 level
or above the $100 level. That should warn you of which way the wind in blowing.
Two final quick notes: my Table of Non-Edibles Futures Indices already has oil rated as NEG
(bearish). You can access the table at http://preciousmetalscentral.com and go to the
commentary download link. Secondly, my long term momentum indicator has already broken
below its long term up trend line for a negative cautionary sign possibly forecasting the future
move in oil.
GOLD
LONG TERM
http://preciousmetalscentral.com/subscriber/weeklycommentary.pdf