Market Analysis

REDEMPTION

We are finally starting to see some retaliation against those “too big to fail” institutions who are basically criminals who have robbed the middle class of their wealth and livelihood over time.  Let’s hope it keeps up!

Metals Review

Gold fell 2.85% for the week which is more than what I expected.  I thought a fall to the $1,120 area would suffice.  While it’s tough trying to predict weekly movements what really matters is the predominant trend which remains up.

RSI fell below the 50 level and could very well test the important support area at 40.  Gold’s most recent uptrend line was violated, against my wishes, for the record. 

The Fibonacci levels are still showing quite goods areas where resistance is to be found.  Once we mount some steam again I expect gold to clear the 50% retracement level at $1,135 more easily and for good on this next leg higher.

The moving averages are vaguely positive with the 200 day moving higher and the 100 and 50 days intertwined at the $1,113 and $1,109 levels respectively.  The 50 day remains below the 100 day, but any move above the averages by gold should put the 50 back in it’s place, above the 100 day moving average.

MACD just flashed a sell signal while the Slow STO did so over a week ago.  The Slow STO was the only thing that bothered me about last weeks chart, and it turned out to be true.

From here I have to think we will test the $1,080 area briefly before moving back above

$1,135, but let’s hope I’m wrong...again!

Silver dropped 1.61% for the week and is trading much stronger than gold for once.  Last week I talked about my long held thought that silver would lead gold into the second leg of this move higher.  It looks to have begun.

Speculation is rampant that the big silver shorts are covering, and getting out of dodge before the CFTC holds hearings specifically on the silver short position on March 25.  That thought though does not jive with the most recent COT report which was cutoff Tuesday March 9, and actually shows an increase in the commercial short position.  Next weeks COT could be interesting and very telling.

The RSI is trending flat and has slightly broken the uptrend line which is must move above if a resumption of the move higher has any chance of transpiring.  The Fibonacci levels continue to show great support and resistance areas.

An uptrend channel has formed and is very steep.  Normally I would say it’s unsustainable, but we all know how silver can move.  This could remain intact for at least two months which would put silver closer to $19 than $17.

The moving averages are key right now.  Only the 200 day is moving higher while the 100 and 50 day are flat and proving resistance and support respectively.  I expect the 50 day average to remain support until the lower limit of the uptrend channel meets it and in turn move silver up to test the 100 day averages and likely slicing right through it.

MACD is still bullish but hooking to flat.  Slow STO has shot a sell signal from over bought.  If silver stayed right around here, it would bring the Slow STO indicator lower, and in turn make the technical analyst in me a happy camper.

Platinum moved up by 1.86% for the week and is now nearing the upper reaches of it’s uptrend channel.  RSI is moving slightly lower now.  The moving averages are in fantastic shape, as always.

MACD is bullish, but the Slow STO indicator is in overbought territory and having a hard time deciding whether to move up, or down.  I’d say a move lower is more likely than a move higher in the week ahead. 

The downside will likely be limited to the $1,500 level where the 50 day moving average resides.  The upper end would be $1,650, which happens to be Jim Sinclair’s long held target for gold.  Albeit, he has admitted for a while now that that target is far to conservative.

If only gold were left to trade freely, it’s chart would look much more like that of platinum.  Ahh well, the lower prices just give myself and you more time to get more gold before it moves much higher, so take it as a blessing in disguise.

Palladium fell 2.77% this past week as expected since it simply went to high, too fast.  RSI is tipping higher off the uptrend line drawn in.  The uptrend channel is intact and the steep uptrend line within the uptrend channel is also intact.

When the steep uptrend line is combined with the RSI, I think palladium will move up this coming week at least to test the $480 area at the top of the uptrend channel.

The moving averages are, as always, in great form.  MACD is hooking flat but still in a bullish posture.  The Slow STO indicator is bearish from oversold but is hooking to flat.

While I’d prefer to see palladium move back to the $440 area, it looks like another quick test of the $480 area is in order.  Hopefully then we can see a more meaningful correction back to the 50 day moving average.

Fundamental Review 

The Greek Prime Minister called for the US and Europe to crack down on speculative trading and exotic bets which he believes have driven up Greece’s borrowing costs.  If that doesn’t work he will turn to the IMF he says.

He’s right, and these institutions that we all know are robbing peter to pay themselves should be set free to do as they please...but when they get in trouble, let them fail!

One of the more refreshing stories came out this week whereby the big US institutions were all but excluded from facilitating European government debt.  These deals are worth billions of Euros.  For the first time in five years only one US institution appears in the top ten, at number ten.

The retaliation is due to their involvement in the credit crunch.  To be honest these institutions all