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Retired chief investment officer and former NYSE firm partner with 50 plus years experience in field as analyst / economist, portfolio manager / trader, and CIO who has superb track record with multi $billion equities and fixed income portfolios. Advanced degrees, CFA. Having done much professional writing as a young guy, I now have a cryptic style. 40 years down on and around The Street confirms: CAVEAT EMPTOR IN SPADES !!!

Friday, November 01, 2013

Noteworthy Short Term Fails For Gold and Oil

The gold price has been in a quiet, almost 'under the radar' rally since early summer.
Down trending indicators have bottomed and show modest positive action. A big test
came this week when gold confronted trend resistance at the $1350 oz. level. It failed
to take it out and quickly lost $37 on the lack of success. It thus remains in the 'dead
cat bounce' category until it can push up through the down line and rise above short
term resistance at $1350. Gold Price The bear has yet to be upended in the short run.

The oil price remains in a robust period of seasonal weakness, and broke trend support off
the 2012 level of $80 bl. this week. I expected a little tougher battle, but news of rising
supply trumped that. My hope has been that continuing seasonal weakness would carry oil
down to $85 in early 2013. That might provide a terrific long side trade, and would also be
a nice plus for the consumer who is already enjoying a weaker gasoline price. Oil Price
Oil is coming off very quickly and you will note the weekly RSI is moving smartly to an
oversold position. This does not dim my hope, but it is time to be more watchful now for a
bounce in the weeks ahead.

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