Gold Technical Analysis

By Jonah S. Ford A third retest of key support on the US Crude Oil futures chart may have signaled at least a temporary bottom for the market. Friday’s sharp reversal from the swing low near $95.00 per barrel confirmed that buyers are still present at this level, with potential for an upside rally increasing with the strong close. The move occurred near the apex of a well-defined Descending Triangle chart pattern, detected by Autochartist and illustrated here on the 240-minute time interval. The chart analysis reveals the trend line support holding the price steady above the $95.00 level as the Descending Triangle chart pattern narrows to a completion during Friday’s session. The brief push back above $97.00 sets the stage for a technical breakout with a commensurate upside forecast to complete the pattern. This creates a long entry point on the chart with only a move outside of this small range needed for identifying a directional trend shift. A failure of the $95...

  By Jonah S. Ford   Gold futures slipped lower after a failed retest of key level resistance in last week’s trading. The resistance at $1,690 per ounce, highlighted by the Autochartist Key Level indicator, has now established itself as significant overhead which may prove difficult to overcome in the near term. The breakdown from the key level also triggered a technical breakout from a large Pennant chart pattern, shown here on the Autochartist platform’s 240-minute time interval. This adds support to the case for continued selling pressure in the week ahead.   Gold has been buffeted by several conflicting forces in the broader markets over the last several weeks. The unfolding Euro zone debt crisis is raising concerns among investors as to the safety of holding paper assets in the face of potential sovereign defaults. The reaction has so far been heavy selling in the equities markets, with US Treasuries benefitting from their perception as a safe-haven. Gold is viewed a viable defensive asset...

By Jonah S. Ford Live Cattle futures pushed higher to complete the most recent leg up inside a Channel Down chart pattern. The move executed a breakout on the Autochartist 240-minute chart illustrated here, marking a potential transition out of the channel and into a new rally. The market broke out above the $121.00 per hundredweight to overcome the trend line resistance and closed well. The Channel Down chart pattern scores very high in all fields, with an overall Quality ranking of 8 bars. The momentum of the up-thrust through the top of the channel measures a full 10 bars, which makes for an increased probability of follow-through when the market re-opens following the US Thanksgiving holiday. The projected price target from here suggests a continuation of the move to at least $123.94 per hundredweight, with the upper end of the forecast coming in at the $127.00 level. If the upper end of this range is achieved, it would be a new all-time...

By Jonah S. Ford Coffee futures have held in a volatile sideways trading range through much of November, appearing somewhat non-directional in the short term while conforming well to the long term chart analysis. Scaling back to the 240-minute time interval, Autochartist has identified a broad Descending Triangle chart pattern. The recent congestion area near the $2.40 per pound level formed a rounding top at the trend line resistance created by the top of the triangle. The failure of the market to push through this level set up a short entry opportunity, where a stop-loss can be entered above the formation. Continued selling pressure would send the market towards the projected price support level near $2.22 per pound. If achieved, this would add significant strength to the overall pattern as it continues expanding in both price and time. A breakout below the triangle support would trigger a technical breakout with strongly bearish implications. Conversely, a reversal back above the stop-loss point above $2.40...

By Jonah S. Ford Sugar futures have slipped into a narrowing Channel Down chart pattern, recently testing what may prove to be a final low in the downtrend. Autochartist has illustrated the key support and resistance provided by the Channel Down formation, shown here on the 240-minute chart. This pattern shows has established an exceptionally strong trend in the market, confirmed by the Initial Trend reading of a full 10 bars. The overall Quality ranks the channel at 7 bars and may strengthen on a confirmed retest of resistance. The swing low near 23.50 cents found buyers once again to carry the price back inside the channel A move higher to test the 24.50 cent level is now anticipated, though the advanced maturity of this trend will keep traders watching for indications of a directional breakout. A move above the upper trend line or below the bottom trend line would signal a potentially major trend shift. Such a move will likely generate a...

By Jonah S. Ford More bloodletting in the stock market set the tone for the commodities sector in Monday’s trading, with nearly all markets trading in the red as European and US equities plunged. The energy complex appears especially hard hit by the bearish price action. US Crude Oil futures corrected sharply and may be on track for an approach to the major support, identified on the Autochartist Key Level platform as illustrated here on the 240-minute candlestick chart. This key level at $91.70 per barrel had served as a pivot point during the long sideways trading range that preceded the most recent rally. Once a meaningful breakaway from this level was achieved, the steady uptrend carried the price sharply higher to close above $100 per barrel for the first time in months. The retracement from that swing high has the momentum and apparent selling pressure that often indicates a correction from a major top, Though the oil complex is likely to move...

By Jonah S. Ford  Heating Oil futures followed the energy complex lower in Friday’s volatile session, setting up a textbook pattern breakout. The push lower in the Heating Oil violated the key support provided by a major Rising Wedge chart pattern which began developing in early October. Follow-through to lower levels in the week ahead may signal the end of the latest rally with a big correction on the horizon.   The Rising Wedge pattern has been this market’s definitive guideline throughout the entire rally from the lows near $2.70 per ounce. This pattern scores high marks across the board, with an overall Quality of 8 bars. While the momentum associated with the breakout shows a modest 3-bar reading, the prolonged duration of the pattern over both price and time increases the potential for a follow-through move towards the forecast range. The projected price target for this move calls for a minimum retracement to the $2.93 per gallon level. An increase in momentum...

By Jonah S. Ford Gold futures tumbled in heavy trading last week to reach their lowest level in several weeks. With traders eyeing the sell-off as a possible buying opportunity, the start of trading in the week ahead may be an important indication of the longer term direction the market is taking. Autochartist is picking up some clues in the technical formations on the intra-day charts. The major development last week was gold’s break of key support at the $1,760 per ounce level, which triggered a sell signal on the Autochartist Key Level identifier. This proved to be a meaningful price point as momentum selling took hold and a $50 per ounce decline ensued. After achieving the forecast target, a mild short-covering bounce brought the price off the lows in Friday’s session. This bounce created a swing low where the price can now pivot for a retest of the key level support at $1760. If this plays out, it will diminish the weight...

By Jonah S. Ford   US Treasury Bond futures rose steadily in the wake of a sharp sell-off in global stock markets on Thursday. The rise in bond prices was enough to execute a buy signal on the Autochartist 240-minute chart, which indicates a continuation of the rally is possible. Additional strength can be seen on the Autochartist Key Level indicator which shows this breakout coinciding with a move above the lateral resistance just beneath the 143.00 level. The up-thrust into the close breached lateral Key Level support as well as the upper boundary of a large Ascending Triangle formation. The Ascending Triangle has been developing since the beginning of November and the move higher is likely to garner additional support from momentum buyers looking for another test of the old contract highs. Autochartist has generated a forecast based on the close above the resistance level. The projected minimum price rise is shown at 145.30, roughly a point above the current level. Continued weakness...

By Jonah S. Ford Wheat futures set up for a short entry after a textbook failed approach to a long term resistance level. The Key Level identified by Autochartist and illustrated here on the hourly candlestick chart held the market and broke the momentum of the rally. As the price fell to the top of the forecast range from an earlier breakout pattern, the technical retracement carried the nearby wheat futures back to the Key Level at $6.31 per bushel. This was met immediately by heavy selling pressure, and the market managed one final thrust over the level before capitulating to the bears. Wednesday’s sharp pullback brings the price back to the upper end of the previously projected range. With the resistance level now firmly established as major obstacle on the chart, a continuation of the sell-off may drive the rice towards the bottom end of the range at $5.93 per bushel. A revision to a bullish outlook would require a move back above...