A Buying Opportunity For Gold and Silver?

Hello traders everywhere!  Adam Hewison here, co-founder of MarketClub with your 1 p.m. market update for Wednesday, the 20th of July.

Right after we had finished our 1 PM update, the President came on TV and indicated that the gang of six had come to some magical debt agreement.  That was all that was needed to rally the equity markets and push down the price of gold and silver.  Let me just say this, it's not a done deal until it's a done deal and I don't think this deal will get done.

The action in gold and silver today and the fact that they are both higher on the day right now, indicates that yesterday was probably a buying opportunity in both of these metals.

Let's just recap what has really happened.  Nothing has changed, we still have major, major debt problems ahead of us.  As I mentioned in yesterday's 1 PM update, I wanted to see how the markets closed for the day.  I think today is going to be even more important, as we are in the middle of the trading week and we still have the potential for a lot more news to come out.  Last week we closed at 1316 on the S&P 500 and for the month we closed around 1320.  We'll be watching to see if the S&P 500 will keep its upward momentum or have another push down to the 1300 level.

Now, let's go to the markets and see how we can protect and make your money grow in 2011.

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S&P 500
Monthly Trade Triangles for Long-Term Trends                = Positive
Weekly Trade Triangles for Intermediate Term Trends    = Positive
Daily Trade Triangles for Short-Term Trends                     = Positive
Combined Strength of Trend Score                                    = + 90

A 61.8% Fibonacci retracement level comes in at 1332.97 for this market.  I suspect that there will be professional selling between the 1330 and 1333 level, should we get to that area.  All of our Trade Triangles are positive on this market indicating that we are in an uptrend.  However, the market does show some negatives: the PSAR is negative and the MACD is somewhat mixed.  A lower close today in this index will signal more trading range than a trend change.  Look for support around the 1315 area extending down to 1310.
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SILVER
Monthly Trade Triangles for Long-Term Trends                = Positive
Weekly Trade Triangles for Intermediate Term Trends    = Positive
Daily Trade Triangles for Short-Term Trends                     = Negative
Combined Strength of Trend Score                                    = + 85

The silver market bounced back dramatically today after almost touching the $38 an ounce level earlier in the day.  Currently silver is down about $.40 for the week and we still have the rest of the day and Thursday and Friday to go.  Near-term resistance comes in around the $40 level and support is at $38.  We are expecting this market to reach its highs towards the latter part of Q3 and early Q4.  The intermediate target for silver based on the Fibonacci count of 61.8% is $42.98.
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GOLD
Monthly Trade Triangles for Long-Term Trends                = Positive
Weekly Trade Triangles for Intermediate Term Trends    = Positive
Daily Trade Triangles for Short-Term Trends                     = Positive
Combined Strength of Trend Score                                    = + 100

Despite what looked like a sharp pullback for the gold market, gold remains higher for the week.  One key level we see in this market right now is $1580, which should act as support.  The next level of support is $1566.  We continue to like this market from the long side.  We are looking for gold to move higher until the end of Q3 and possibly into Q4.  Intermediate targets for gold are $1,640 and $1,650.
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CRUDE OIL
Monthly Trade Triangles for Long-Term Trends                = Negative
Weekly Trade Triangles for Intermediate Term Trends    = Negative
Daily Trade Triangles for Short-Term Trends                     = Positive
Combined Strength of Trend Score                                    = - 65

The crude oil market continues to move in a sideways pattern and this is reflected in our -65 Chart Analysis Score, indicating that a trading range is at hand.  Resistance comes in as we have stated previously at $99.00 and must be taken out if this market is to move higher.  Support has now moved to the center of the Donchian trading channel which comes in around the $95.00 level today. Presently the best strategy in this market is to be on the sidelines waiting for the breakout one way or the other.  Our Trade Triangle technology indicates that that is going to happen on the downside. We will see.
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DOLLAR INDEX
Monthly Trade Triangles for Long-Term Trends                = Positive
Weekly Trade Triangles for Intermediate Term Trends    = Positive
Daily Trade Triangles for Short-Term Trends                     = Negative
Combined Strength of Trend Score                                    = + 65

The relentless sideways activity in this index continues with no real movement either on the upside or the downside.  The Dollar Index remains below its 200 day moving average.  The longer term trend for the Dollar Index is positive based on our Trade Triangle technology.  Resistance remains between 75.50 and 76.50.  Support comes in today at 74.00.
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REUTERS/JEFFERIES CRB COMMODITY INDEX
Monthly Trade Triangles for Long-Term Trends                = Negative
Weekly Trade Triangles for Intermediate Term Trends    = Positive
Daily Trade Triangles for Short-Term Trends                     = Negative
Combined Strength of Trend Score                                    = + 55

There is no change in this index or our analysis for this market.  The +55 Chart Analysis Score indicates that this market remains in a trading range in the near term.  At the present time, our Trade Triangle technology is mixed.  Resistance is between 349 and 350.  Support comes in at 342.

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If you haven't watched our earlier 1 PM updates, check them out on this blog.

Don't forget to tune in tonight, at 5 PM Eastern time for the MarketClub TV show.  You will not believe some of the phone calls we have had so far, simply amazing.

Want to be part of the MarketClub TV show? Simply call 410-867-2100 extension 129 and (1) leave us a message, (2) tell us how you use MarketClub, (3) ask a question about the market or (4) comment on anything to do with the markets.

Call today and be automatically entered to win a one-year membership to MarketClub.

As always, we rely on our market proven Trade Triangle technology for catching the big moves.

Every success,
Adam Hewison
President of INO.com
Co-founder of MarketClub