Chart of Interest – Sugar
2013 March 8 by Graham Parlane
Hi
I’ve been stalking this one for a while now. Wedge formations are notoriously long lasting so patience has been required.
Interestingly I cannot find a lot of buzz on the wires (which I like!) about the latest move apart from expectations thatChina’s imports will rise in Q1
1) Long term picture – The price of Sugar has halved over the last 2 years
2) A closer look. The suggestion here is that Sugar broke below the long term support line but quickly reversed and then days later has bounded higher again. Could this be a very significant and long term low in place now?
Closer look – click here to view chart
I’ll be watching the news wires to see if there is a developing Sugar story over coming days and weeks.
Cheers G.
Edge Capital Markets Limited, a specialist advisor in Futures – FX – CFD – Options – Shares – Gold – Silver – Commodities
Chart of Interest – Gold, technically perfect?
2013 February 13 by Graham Parlane
Good morning
Two nights ago Gold dropped sharply, stopping out many of my ‘long Gold’ clients. The move through the previous low of US$1,651.00 was particularly sharp with stop losses at that level done with significant ‘slippage’ at $1,647.00. That slippage tells me, quite clearly, that my clients were not alone and the market on the whole was caught out on the drop (caught long).
This is classic market behaviour. If market participants are all sitting long then they are sellers on their next transactions, thus inhibiting moves higher. Now a large amount of those longs have been forced out. Clearly the implication to me is that the market is now free to move higher…….
With that in mind take a look at the chart.
1) The move down from the US$1797 high to the $1625 low was a prefect ‘Fibonacci’ 61.8% of the previous rally ($1527 to $1797).
2) The latest 3 week pull back is again a perfect ‘Fibonacci’ number, this time a 76.4% move (my favourite ratio which I have observed often occurs before big moves – the depth of the move often confounding the most ardent bull – as is my base case here).
3) Yesterday’s low stopped on the rising trend line from the aforementioned lows.
Big picture
XAUUSD – click here to view chart
A closer look
XAUUSD Closer Look – click here to view chart
No doubt this analysis is all a bit over the top for most of you but the end result could be a good buying opportunity with clear trading parameters if you are a gold bull (USD bear) like me.
G.
Edge Capital Markets Limited, a specialist advisor in Futures – FX – CFD – Options – Shares – Gold – Silver – Commodities
Charts of interest – Copper and the USD Index
2013 January 31 by Graham Parlane
All
In the wake of the FED’s FOMC announcement this morning these charts bear close scrutiny.
The FED have pledged to keep the money spigots wide open, to pay for their US$85 bio per month of various securities purchases, until the labour market improves to 6.5% unemployed goal. i.e. the song remains the same.
We know that the majority of data from around the world, last night’s U.S. GDP excepted, has been strongly on the improve lately so is Dr. Copper (recall Gartman says it has a PHD in economics), ready to break higher just as the USD Index drops below support?
Copper / USD Index – click here to view chart
With the EUR/USD rampaging higher, Gold and Silver again looking strong I suspect these support/resistance areas will be broken in due course and create very tradable moves.
Regards G
Edge Capital Markets Limited, a specialist advisor in Futures – FX – CFD – Options – Shares – Gold – Silver – Commodities
Hopeful for Gold and Silver
2012 December 18 by Graham Parlane
All
Recently Gold and Silver have been bucking the trend of a weaker USD, failing to rise despite the moves up in NZD, AUD, EUR and Copper etc.
I find this action rather strange given the background of the FED’s supportive action but you never know if, say for example, the IMF are selling Gold to send bailout money somewhere or if a large gold miner has to put on a hedge due to their treasury policy.
So with the above situation I have been stalking a reason to resume being long Gold and Silver. The action overnight hints that the precious metals may be worth a buy here with stop loss orders below the overnight lows.
1) Gold daily – recall the big picture. Gold has been in a brilliant uptrend since 2001 and in August broke higher out of a multi-year consolidation triangle
Gold Daily – click here to view chart
A closer look at Gold – support apparent now at the overnight low
A Closer Look – click here to view chart
2) Silver has a number of similar technical attributes including stopping at the important Fibonacci number, 61.8% decline of the last rise. Also Silver probed below, but closed above, the 4 month major trend line support.
Silver – click here to view chart
Cheers G.
Edge Capital Markets Limited, a specialist advisor in Futures – FX – CFD – Options – Shares – Gold – Silver – Commodities
Gold – Edge Capital product for all investor types
2012 December 4 by BBY NZ
We know very well that all investors are not created equal – their appetite for risk and time frame vary significantly from investor to investor, as does their availability of funds.
At Edge Capital we have available through our broking partners, access to the gold market via many different setups, and thus believe we cater for gold investors across the full spectrum of styles. We have product to ensure no-one misses out on the ability to invest in this market.
Allow me to outline the 7 ways we can provide an exposure to gold. I am sure you will be able to relate to the investors below.
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If these comments fit with you then you can buy physical gold using Edge Capital Markets (Portfolio – CAIS account).
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If these comments fit with you then you can buy gold futures using Edge Capital Markets (Advisory or Professional Account).
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If these comments fit with you then you can buy Gold Exchange Traded Funds using Edge Capital Markets (Portfolio Account).
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Edge Capital Markets Limited, a specialist advisor in Futures – FX – CFD – Options – Shares – Gold – Silver – Commodities
January 1st 2013 – A game changer for Gold
2012 November 22 by Gary Warner
On January 1st 2013 the latest edict from the Basel Committee on Banking, an elite group of financial rule makers who’s task it is to define capital requirements and banking standards, comes into play. The new rule will be that Gold is attributed with First Class Asset status in the banking world ie any gold that a bank holds will be counted 100% towards the collateral of that bank whereas currently they can only count 50% of their Gold holdings in their equity totals.
So what does this mean for Banks, well for the first time in over 40 years they will be able to rate the Gold they hold in their vaults as a First Class asset and will therefore be able to lend 100% against it, of course this also means at the same time they will now no longer have to hold as much government bonds or mortgage backed securities and let’s face it both of these have had their reputations tarnished over recent years. Thus it will be no surprise to see Bank’s significantly increase their Gold holdings relative to the other First Class assets that they hold especially as part of the new rules has stipulated that Banks must increase their First Class Assets from 4% to 6% of their overall assets.
This move attributes to Gold an equal status as cash, in other words it once again becomes essentially a currency. This is a massive development and yet the mainstream media seems hardly to be noticing such a huge and potentially game changing story for the importance of Gold.
It is not surprising that authorities are keeping fairly quiet about this as Central Banks are quietly going about the business of accumulating more gold into their coffers in anticipation of the new rules at year end and they certainly don’t want to be competing with all and sundry (for example you and me) during this process as they want to keep competition, and therefore price, down to a minimum.
For all we know this could well be the first move to return to some sort of Gold standard, something that we are constantly told would be impractical and will not happen. You can rest assured that if such a development was ever enacted the general public would receive no prior warning of it.
Is this new rule likely to lend itself to a significantly higher Gold Price- well it is not very likely to cause the opposite effect now is it.
Gary Warner
Edge Capital Markets Limited, a specialist advisor in Futures – FX – CFD – Options – Shares – Gold – Silver – Commodities
Interesting snippet on U.S oil production
2012 November 14 by Graham Parlane
All
I have been a fan of shorting U.S oil on just this theme of increased U.S production (refer ‘Time to sell Crude Oil?’ dated 29 Aug. Crude then US$96 – now US$85).
A somewhat less risky trade to capture this theme could be a ‘pairs’ trade selling U.S Crude buying Brent as the supply expectations widen.
G.
US is top dog in oil
Many of us can (vaguely) remember the oil crises of the mid-70s when the Middle East countries held the world to ransom over oil supply, causing petrol prices to skyrocket.
An everyday item that we all took for granted suddenly became an expensive luxury, particularly if your Dad drove a big Holden V8 gas guzzler to cart the kids around.
Now the worm has turned.
For so long, Saudi Arabia has been the world’s largest single country producer and together with all its OPEC mates has kept the western world on tenterhooks for the best part of three decades or more.
U.S. Energy Production – click here to view chart
But now with the shale gas revolution in the US (and elsewhere around the non-OPEC world), the International Energy Agency (IEA) thinks that the US will become a net oil exporter by 2030 and almost self-sufficient in oil by 2035. The US currently imports around 20% of its oil requirements and is by far the biggest consumer of petroleum products.
The IEA’s latest annual review of world energy supply says the US will overtake Russia as the biggest gas producer by 2015 and become the world’s largest oil producer by 2017.
U.S. Fossil Fuel Production – click here to view chart
The combination of producing its own energy and more frugal consumption through technology, education and basic economics will also dramatically shift the geopolitical balance of power around the world.
In short, the US may not have to be so friendly to the Saudis or anyone else in the Middle East any more.
The shale gas bonanza also has the fortuitous side effect of replacing coal as the main energy fuel stock in the US which would also go a long way to mitigating many greenhouse gas concerns.
This story has a very long way to play out, but has already become a major global issue.
Edge Capital Markets Limited, a specialist advisor in Futures – FX – CFD – Options – Shares – Gold – Silver – Commodities
Stunning Gold Chart – Gold On The Cusp Of A Strong Rally?
2012 November 13 by Graham Parlane
All
For a very long time Gold has been considered a commodity, however since the GFC and the massive money printing conducted by the world’s central banks, the modern view is to consider Gold as money i.e. that classic store of value when everything around it is being debased. To whit Gold has been rising steadily as Copper (the Dr with the PHD in Industrial Activity) has been declining just as steadily.
Given that Gold was one of the main beneficiaries of the first few rounds of QE and the world’s central banks have again, over the last few months, embarked on another easing frenzy one could expect that Gold will begin to rise again.
In that context this long term chart of Gold, as measured against its 55 week moving average, makes for very interesting reading.
Since the 2001 low of US$255.00 oz the 55 week moving average has done a simply amazing job of defining the major trend. Now the recent sharp drop to US$1.672 oz very much looks like the low made in April 2009 before Gold embarked on a massive 122% rise. (This was the same period that my Mr Silverballs rode NZ$1,500 to NZ$1,000,000 in Silver using the leveraging capabilities of the BBY Online system).
Further hardening my resolve that Gold may be on the cusp of another strong rise after a 13 month consolidation, the weekly bounce off the 55 week m.a. was a ‘bullish engulfing week’.
Chart 1 – The 55 week m.a. documented.
55 m.a. – Click here to view chart
Chart 2 – A closer look at the recent bounce.
A closer look – Click here to view chart
I think that this could be one of those very rare occasions where an truly stunning opportunity exists. I have multiple ideas on how to capture any ensuing move should you be interested.
Cheers G.
Edge Capital Markets Limited, a specialist advisor in Futures – FX – CFD – Options – Shares – Gold – Silver – Commodities
Physical Gold – the major new trend
2012 November 1 by Gary Warner
Much has been written about Gold’s dramatic rise in price over the past decade or so and it certainly appears that this trend is set to continue for some time yet.
However within this trend of increasing demand for Gold a new trend, and probably the most important development yet, is starting to take hold and this is the demand for investors to hold actual physical gold.
The significance of this development is that in the early part of Gold’s rising trend the market was to a very large degree driven by the paper market with the introduction of Exchange Traded Funds which tracked and were backed by gold. Investors flocked to these funds and as a result more and more of these types of funds were brought to the market. Such has been the proliferation of these funds that many in the market are starting to wonder if indeed these funds actually hold the amount of gold they profess to hold. There may not be anything in this concern and perhaps these funds do indeed have the amount of gold they say they do but the very idea of being ‘pooled’ with other investors is certainly losing its attractiveness.
According to the World Gold Council purchases of gold bars and coins have increased nearly 100% since 2009, whereas additions to Exchange Traded Funds are down by nearly three quarters in the same time period.
Investors are becoming increasingly concerned about developments in the financial markets and they know that throughout history gold has been a safe haven for their wealth, the more the value of paper currencies are eroded by such things as QE the more valuable their Gold becomes. Now accompanying this increasing fear is the increasing desire to hold their gold in a secure vault in their own name or for some burying it under the floorboards at home is the way to go (not something I would particularly recommend but everyone to their own).
The matter of secure vaulting has also been much highlighted recently as many holders of physical gold have their gold stored in Bank vaults and Banks are notorious for leasing out the gold that they have in their vaults. There have been many cases recently of significant gold investors requesting delivery of their gold, that is supposedly being held in a Bank’s vault, only to be presented with delay tactics from the Bank while the Bank struggles to obtain the Gold to deliver back to its client.
In recognition of this increasing trend in the desire to actually own physical gold in your own name and in a secure commercial Non- Bank vault (no leasing to worry about or pooling of ownership) we at Edge Capital Markets have obtained access for our clients to a Gold purchasing service that was previously only available to wholesale clients, with the accompanying very attractive precious metal prices, of course actual delivery of the metals is available for those who want to provide their own storage at home (spade and extra floorboards not included).
Gary Warner
Edge Capital Markets Limited, a specialist advisor in Futures – FX – CFD – Options – Shares – Gold – Silver – Commodities
The Canterbury Rebuild (and NZ monetary policy)
2012 October 30 by Graham Parlane
All
On Friday, following the previous day’s OCR, I had a catch up with the Head of Forecasting at the RBNZ.
The price action suggested that market had seemed somewhat confused by what the OCR review and the Governor’s maiden speech on Friday morning was telling them. The OCR was perceived as hawkish while the speech, some 24 hours later, elicited a dovish reaction.
Amongst many things discussed came the statement that the RBNZ viewed the rebuild as ‘real’ and for me that statement is really the kicker given the last paragraph of the OCR statement…
| ”While annual CPI inflation has fallen to 0.8 percent, the Bank continues to |
| expect inflation to head back towards the middle of the target range. We will continue to |
| monitor inflation indicators, such as pricing intention and inflation expectation data, |
| closely over coming months. |
What they are saying here is that they expect inflationary pressures to come out of Canterbury as firms compete for (tight) labour and materials and that they are watching closely.
For a gauge on the timing of any such effect I thought this graph in this week’s ANZ’s Market Focus was interesting.
Ready-Mixed Concrete Production – click here to view chart
The chart clearly suggests that building activity died in Canterbury the year after the quake (as you’d expect) but now the rebuild is becoming FULLY UNDERWAY.
Cheers G.
Edge Capital Markets Limited, a specialist advisor in Futures – FX – CFD – Options – Shares – Gold – Silver – Commodities