Its Sunday Night and the screen is Blue, Blue, Blue. Gold; New high at 1,162.50 Silver; New High at 18.70 Corn Wheat and Beans Higher… SF pops through the resistance at 1050 and jumps up to 1056 for a high so-far…A low at 946 3/4 gives us an 11 cent range so far for the night and we’ve only been open for 20 minutes. SF is up 7 1/2 cents. CZ is one cent higher at 393 1/4 and Wz is up 3 cents at 562.
These grains will move in sync with the Crude which is up at 78.14 up 50 cents.
Continued weakness in the US Dollar Index will fuel this desire to own commodities as a hedge against the melting dollar. That is a trade which is moving like a battle ship, slow to change course, while it might be buffeted by high winds from time to time.
The story for today, it seems, will be new highs in the metals. I am sure every news anchor on the morning shows at the big networks will be looking appreciatively at their respective solid gold watches and rings, feeling the warmth of indirectly being a metal speculator.
As far as resistance, in the Gold, I would again concentrate on the 1,165 and 1,170, 1,175 levels all the way up the ladder until we get to the next milestone at 1,500.
This contract looks like the chart patterns from 1970’s which trended inexorably higher over a long period of time. Your best strategy is to buy dips, use carefully placed sell stops and then stop reading the papers or watching the TV for the next few months. That will allow you to ignore the downdrafts, let your trailing stops do their work, lock in your profits and just let it drift higher and higher.
In the Silver, we are looking at 19 dollar an ounce, and then it will trail the gold as the leader, up the wall of worry and disbelief. If the gold’s intermediate target is 1500, Silver’s should be 23 to 25 dollars, assuming they trade in sync, with gold leading.
Remember, this is a short holiday weekend in the USA, with Thanksgiving on Thursday.
We could get all the business out of the way by Tuesday. Most people will be traveling or getting ready to watch 24 hours of US football on Thursday while they fight off tryptophan induced comas from the turkey feast.
Good Trading
