Each Week Lo
ngleaftrading.com will be providing us a chart of the week as analyzed by a member of their team. We hope that you enjoy and learn from this new feature.
Weekly Gold Report (January 21 through January 25)
As we begin this abbreviated week, U.S. markets continue to be the focal point as traders try to plan ahead for a continuation of reported earnings. Additionally, there is expectation that House Republicans are planning to punt the U.S. debt ceiling decision by three months if a few of their demands are also met as a compromise. Overall, I believe most traders (myself included) were delighted to see stability this morning as we won’t soon forget the MLK Day chaos from five years ago, when equities saw unwinding of a massive futures position held by a trader at SocGen. While we all welcome volatility, we also appreciate it in smaller doses!
The bulk of the earnings this week fall in the S&P 500 as just shy of one hundred companies in the index report earnings. Thus far, earnings have been decent as indicated by several closes last week above the prior September chart highs. Be sure to keep an eye on Apple as they report on Wednesday. Despite the fact that it has been on a recent slide, it still commands attention as it hovers the $500 mark.
While much of Washington has been preparing for the President’s Inauguration and the almost fifty gala’s that will celebrate the President’s second term, House Republicans are reportedly dangling a carrot for the Democrats to chase after the hangover subsides. It is said that Boehner and Co. plan to push for a vote to extend the debt ceiling for three month. In return it is said they will push for a budget to be passed by both Houses before mid April. Since a budget has not been passed in over four years, they feel that this should be a simple compromise.
While the United States will take the lions share of attention, it should be noted that on Thursday we will see FLASH PMI reports from Europe and China, which may provide a quick move or two in either direction.
Gold begins its third week of upward momentum since testing the support trendline that began back in June (arrow #1). Technically, Gold looks poised to continue higher especially after a convincing outside reversal on the 17th (arrow #2). We are yet to see a strong, follow through bid but it may take another day or two as traders try to muster the courage to buy futures above the $1700 mark and the Fibonacci 2/3rds retracement (arrow #3). A close above this price would be very helpful for bulls to feel more comfortable.
Good luck this week traders! As always, feel free to call or email me directly with any questions or comments regarding this article and chart. I can be reached at (888) 272-6926 or by email at [email protected]. I will be happy to hear from you.
Thank you for your interest,
Brian Booth
Senior Market Strategist
[email protected]
888.272.6926
** There is a substantial risk of loss in trading futures and options. Past performance is not indicative of future results. The information and data contained in this article was obtained from sources considered reliable. Their accuracy or completeness is not guaranteed. Information provided in this article is not to be deemed as an offer or solicitation with respect to the sale or purchase of any securities or commodities. Any decision to purchase or sell as a result of the opinions expressed in this article will be the full responsibility of the person authorizing such transaction.
