Tuesday, March 25, 2008
SAFE TRADE
GOLD
now as long support 11875-825, expect some upside test 12175-275-400 in coming days.. buy at every deep. book profit on sell below 12310/11960. for the day buy ard 11840-45 S/L 11825 and T/p 11925-12025 OR buy abv 12075 S/L 12050 and T/p 12110-160/12250/12325. only close below 11830 down rally again test 11700 atleast (any time close above 12375/13100/13400 bullish while close below 11830/11575-475/11300/ 10950-900/10500/10050/ 9850/9575 bearish for medium term)
SILVER
now as long support 22050 & 21950, expect upside test 22550-875/950 upto 23300 in coming days...buy at every deep. book profit on sell below 23875/ 22075, for the day buy abv 22475-525 S/L 22400 and T/p 22650-750/22875 upto 23000 OR buy ard 22010-30 S/L 21975 and T/p 22250-350. only sustain close below 21975 down rally again test 21750 atleast (any time close below 21975/21250/20150/19390/ 18600-250/ 17850 bearish rally while close above 23900/26100/27500 bullish for medium term)
CRUDE
book profit on sell 4230-35/4130, for the day sell only below 4030 & more below 4000 S/L 4045 and T/p 3960-50 upto 3910-3880 atleast OR sell ard 4145-55 S/L 4160 and T/p 4110-4070 (now crude need to close above 4160/4335/4460-85 for bullish rally while close below 4000-3960/3830/3585/3415-3390 bearish for medium term)
COPPER
book profit on sell below 322/315, for the day sell only below 314.5-313 S/L 316 and T/p 311-10/upto 305, sustain below 303 seen one more down rally OR buy abv 323-24 S/L 321.75 and T/p 326.5-327.75/330/332.5 (upside strong rally only on close above 324/335.5/ 348/354 while close below 310-303/ 281/267.5/254.5/235 bearish for medium term)
MCXARUN
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now as long support 11875-825, expect some upside test 12175-275-400 in coming days.. buy at every deep. book profit on sell below 12310/11960. for the day buy ard 11840-45 S/L 11825 and T/p 11925-12025 OR buy abv 12075 S/L 12050 and T/p 12110-160/12250/12325. only close below 11830 down rally again test 11700 atleast (any time close above 12375/13100/13400 bullish while close below 11830/11575-475/11300/ 10950-900/10500/10050/ 9850/9575 bearish for medium term)
SILVER
now as long support 22050 & 21950, expect upside test 22550-875/950 upto 23300 in coming days...buy at every deep. book profit on sell below 23875/ 22075, for the day buy abv 22475-525 S/L 22400 and T/p 22650-750/22875 upto 23000 OR buy ard 22010-30 S/L 21975 and T/p 22250-350. only sustain close below 21975 down rally again test 21750 atleast (any time close below 21975/21250/20150/19390/ 18600-250/ 17850 bearish rally while close above 23900/26100/27500 bullish for medium term)
CRUDE
book profit on sell 4230-35/4130, for the day sell only below 4030 & more below 4000 S/L 4045 and T/p 3960-50 upto 3910-3880 atleast OR sell ard 4145-55 S/L 4160 and T/p 4110-4070 (now crude need to close above 4160/4335/4460-85 for bullish rally while close below 4000-3960/3830/3585/3415-3390 bearish for medium term)
COPPER
book profit on sell below 322/315, for the day sell only below 314.5-313 S/L 316 and T/p 311-10/upto 305, sustain below 303 seen one more down rally OR buy abv 323-24 S/L 321.75 and T/p 326.5-327.75/330/332.5 (upside strong rally only on close above 324/335.5/ 348/354 while close below 310-303/ 281/267.5/254.5/235 bearish for medium term)
MCXARUN
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Comex gold intraday
Gold prices ended slightly lower yesterday, paring early gains, as the Dollar held firm against the Euro and oil prices extended the previous week losses.
Dollar found support in the report from National Association of Realtors that revealed signs of stability in the US housing market in February. According to the report, resale of homes rose 2.9% to a seasonally adjusted annualized rate of 5.03 million. The rise was above expectations, and the first in seven months.
Gold had corrected from record high levels reached earlier last week, along with oil, as the Dollar bounced back moderately from record-low levels versus the Euro after the Federal Reserve cut its benchmark interest rate by 75 basis points to 2.25 percent.
The latest rate cut has been the sixth since last September, and has made the reduction in the federal funds rate to 300 basis points, to the lowest point since late 2004. But many market participants and analysts had anticipated an even more severe cut by the Fed, a full 100 basis points, amid serious concerns regarding a recession in US economy.
International spot gold traded in the range $926.30 - $906.00, and last quoted at $914.70 ($919.10).
Crude oil for May delivery in NYMEX settled at $100.86 ($101.84) a barrel, after touching a low of $99.95. US crude inventories rose by 200,000 barrels to 311.8 million barrels in the week ending March 14, according to the latest update by US Energy Information Administration.
The Commerce Department had reported last week a drop in US housing starts in February by 0.6 percent to a 1.065 million unit annual rate, down from 1.071 million units in January.
The economic worries and a nose-diving dollar had propelled spot gold to record an all-time high of $1030.80 a Troy ounce last week.
In the meantime US Labor Department’s Producer Price Index, which measures inflation pressures before they reach the consumer, rose 0.3 percent in February following a 1.0 increase in January.
The Federal Reserve in a an unexpected move had cut its discount rate for direct loans to banks by 0.25 percent point to 3.25 percent, and launched a new discount window facility for primary dealers, in desperate moves to stabilize financial markets.
The emergency moves by Fed boosted speculations regarding the possibilities for more casualties in the widening US financial crisis.
Adding to the pressure on the greenback, data from the US showed total industrial output fell 0.5 percent in February, much steeper than the expected rate of 0.1 percent.
Another release showed US homebuilders' confidence held steady in March. The National Association of Home Builders (NAHB) Housing Market Index for March remained unchanged at 20.
The University of Michigan/Reuters index tracking consumer sentiment had dipped to 70.5 in March from 70.8 in February.
The US Commerce department reported a worse-than-expected 0.6 percent fall in the Retail Sales in February.
Another release by the US Labor Department showed the initial claims for state unemployment benefits remained unchanged at 353,000 in the week ended March 8. The four-week average of initial claims fell slightly in the latest week, down by 1,250 to 358,500.
Meanwhile, the US Commerce Department reported that the US trade deficit widened slightly in January, up 0.6% to $58.2 billion.
Medium term outlook (Spot Gold)
Bullish above $916; Resistances are $926, $932, $947, $954, $973, $984, $995, $1002, $1022, $1035, $1052; supports $896, $883. Further up-trend is expected above $954.60.
Last day DGCX Gold April traded in the range $926.00 – $906.50 and closed at $911.80 ($913.80).
DGCX Gold April
TECHNICAL OUTLOOK (Intra-day)
GOLD (April) - Bullish above $ 916; bearish below $ 910
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Dollar found support in the report from National Association of Realtors that revealed signs of stability in the US housing market in February. According to the report, resale of homes rose 2.9% to a seasonally adjusted annualized rate of 5.03 million. The rise was above expectations, and the first in seven months.
Gold had corrected from record high levels reached earlier last week, along with oil, as the Dollar bounced back moderately from record-low levels versus the Euro after the Federal Reserve cut its benchmark interest rate by 75 basis points to 2.25 percent.
The latest rate cut has been the sixth since last September, and has made the reduction in the federal funds rate to 300 basis points, to the lowest point since late 2004. But many market participants and analysts had anticipated an even more severe cut by the Fed, a full 100 basis points, amid serious concerns regarding a recession in US economy.
International spot gold traded in the range $926.30 - $906.00, and last quoted at $914.70 ($919.10).
Crude oil for May delivery in NYMEX settled at $100.86 ($101.84) a barrel, after touching a low of $99.95. US crude inventories rose by 200,000 barrels to 311.8 million barrels in the week ending March 14, according to the latest update by US Energy Information Administration.
The Commerce Department had reported last week a drop in US housing starts in February by 0.6 percent to a 1.065 million unit annual rate, down from 1.071 million units in January.
The economic worries and a nose-diving dollar had propelled spot gold to record an all-time high of $1030.80 a Troy ounce last week.
In the meantime US Labor Department’s Producer Price Index, which measures inflation pressures before they reach the consumer, rose 0.3 percent in February following a 1.0 increase in January.
The Federal Reserve in a an unexpected move had cut its discount rate for direct loans to banks by 0.25 percent point to 3.25 percent, and launched a new discount window facility for primary dealers, in desperate moves to stabilize financial markets.
The emergency moves by Fed boosted speculations regarding the possibilities for more casualties in the widening US financial crisis.
Adding to the pressure on the greenback, data from the US showed total industrial output fell 0.5 percent in February, much steeper than the expected rate of 0.1 percent.
Another release showed US homebuilders' confidence held steady in March. The National Association of Home Builders (NAHB) Housing Market Index for March remained unchanged at 20.
The University of Michigan/Reuters index tracking consumer sentiment had dipped to 70.5 in March from 70.8 in February.
The US Commerce department reported a worse-than-expected 0.6 percent fall in the Retail Sales in February.
Another release by the US Labor Department showed the initial claims for state unemployment benefits remained unchanged at 353,000 in the week ended March 8. The four-week average of initial claims fell slightly in the latest week, down by 1,250 to 358,500.
Meanwhile, the US Commerce Department reported that the US trade deficit widened slightly in January, up 0.6% to $58.2 billion.
Medium term outlook (Spot Gold)
Bullish above $916; Resistances are $926, $932, $947, $954, $973, $984, $995, $1002, $1022, $1035, $1052; supports $896, $883. Further up-trend is expected above $954.60.
Last day DGCX Gold April traded in the range $926.00 – $906.50 and closed at $911.80 ($913.80).
DGCX Gold April
TECHNICAL OUTLOOK (Intra-day)
GOLD (April) - Bullish above $ 916; bearish below $ 910
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outlook
April gold closed lower for the third day in row on Monday and the low-range close sets the stage for a steady to lower opening
on Tuesday. Stochastics and the RSI are oversold but remain bearish signaling that sideways to lower prices are possible near-
term. If April extends last week's decline, the 38% retracement level crossing at 893.70 is the next downside target. Closes
above the 20-day moving average crossing at 968.40 would confirm that a short-term low has been posted. First resistance is
the 10-day moving average crossing at 965.40. Second resistance is the 20-day moving average crossing at 968.40. First
support is last Thursday's low crossing at 904.70. Second support is the 38% retracement level crossing at 893.70.
May silver closed higher on Monday due to short covering as it consolidated some of last week's decline but remains below the
38% retracement level of the August-March rally crossing at 17.731. The low-range close sets the stage for a steady to lower
opening on Tuesday. Stochastics and the RSI remain bearish signaling that sideways to lower prices are possible near-term. If
May extends last week's decline, the 50% retracement level crossing at 16.585 is the next downside target. Closes above the 10-
day moving average crossing at 19.614 are needed to confirm that a short-term low has been posted. First resistance is the 38%
retracement crossing at 17.731 then the 25% retracement level crossing at 19.015. First support is last Thursday's low crossing
at 16.725 then the 50% retracement level crossing at 16.585.
May copper closed higher on Monday and above the 38% retracement level of the December-March rally crossing at 358.50 as
it consolidated some of last week's decline. The high-range close sets the stage for a steady to higher opening on Tuesday.
Stochastics and the RSI are oversold and are turning neutral hinting that a short-term low might be in or is near. Closes above
the 20-day moving average crossing at 379.12 are needed to confirm that a low has been posted. If May extends last week's
decline, the 50% retracement level of the December-March rally crossing at 344.85 is the next downside target. First resistance
is the 10-day moving average crossing at 370.97. Second resistance is the 20-day moving average crossing at 379.12. First
support is last Thursday's low crossing at 346.10. Second support is the 50% retracement level crossing at 358.50.
May crude oil closed lower on Monday as it extends last week's decline below the 20-day moving average crossing at 103.71.
The low-range close sets the stage for a steady to lower opening on Tuesday. Stochastics and the RSI remain bearish signaling
that sideways to lower prices are possible near-term. If May extends last week's decline, the reaction low crossing at 98.33 is
the next downside target. Closes above the 10-day moving average crossing 105.82 would confirm that a short-term low has
been posted. First resistance is the 20-day moving average crossing at 103.71. Second resistance is the 10-day moving average
crossing at 105.82. First support is last Thursday's low crossing at 98.65. Second support is the reaction low crossing at 98.33.
May Henry natural gas closed higher on Friday as it consolidated some of last week's decline. The high-range close sets the
stage for a steady to higher opening on Tuesday. Stochastics and the RSI are turning neutral hinting that a short-term low might
be in or is near. If April extends last week's decline, the 50% retracement level of December-March rally crossing at 8.732 is
the next downside target. First resistance is the 20-day moving average crossing at 9.577 then the 10-day moving average
crossing at 9.683. First support is last Thursday's low crossing at 8.750. Second support is the 50% retracement level of this
year's rally crossing at 8.732.
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on Tuesday. Stochastics and the RSI are oversold but remain bearish signaling that sideways to lower prices are possible near-
term. If April extends last week's decline, the 38% retracement level crossing at 893.70 is the next downside target. Closes
above the 20-day moving average crossing at 968.40 would confirm that a short-term low has been posted. First resistance is
the 10-day moving average crossing at 965.40. Second resistance is the 20-day moving average crossing at 968.40. First
support is last Thursday's low crossing at 904.70. Second support is the 38% retracement level crossing at 893.70.
May silver closed higher on Monday due to short covering as it consolidated some of last week's decline but remains below the
38% retracement level of the August-March rally crossing at 17.731. The low-range close sets the stage for a steady to lower
opening on Tuesday. Stochastics and the RSI remain bearish signaling that sideways to lower prices are possible near-term. If
May extends last week's decline, the 50% retracement level crossing at 16.585 is the next downside target. Closes above the 10-
day moving average crossing at 19.614 are needed to confirm that a short-term low has been posted. First resistance is the 38%
retracement crossing at 17.731 then the 25% retracement level crossing at 19.015. First support is last Thursday's low crossing
at 16.725 then the 50% retracement level crossing at 16.585.
May copper closed higher on Monday and above the 38% retracement level of the December-March rally crossing at 358.50 as
it consolidated some of last week's decline. The high-range close sets the stage for a steady to higher opening on Tuesday.
Stochastics and the RSI are oversold and are turning neutral hinting that a short-term low might be in or is near. Closes above
the 20-day moving average crossing at 379.12 are needed to confirm that a low has been posted. If May extends last week's
decline, the 50% retracement level of the December-March rally crossing at 344.85 is the next downside target. First resistance
is the 10-day moving average crossing at 370.97. Second resistance is the 20-day moving average crossing at 379.12. First
support is last Thursday's low crossing at 346.10. Second support is the 50% retracement level crossing at 358.50.
May crude oil closed lower on Monday as it extends last week's decline below the 20-day moving average crossing at 103.71.
The low-range close sets the stage for a steady to lower opening on Tuesday. Stochastics and the RSI remain bearish signaling
that sideways to lower prices are possible near-term. If May extends last week's decline, the reaction low crossing at 98.33 is
the next downside target. Closes above the 10-day moving average crossing 105.82 would confirm that a short-term low has
been posted. First resistance is the 20-day moving average crossing at 103.71. Second resistance is the 10-day moving average
crossing at 105.82. First support is last Thursday's low crossing at 98.65. Second support is the reaction low crossing at 98.33.
May Henry natural gas closed higher on Friday as it consolidated some of last week's decline. The high-range close sets the
stage for a steady to higher opening on Tuesday. Stochastics and the RSI are turning neutral hinting that a short-term low might
be in or is near. If April extends last week's decline, the 50% retracement level of December-March rally crossing at 8.732 is
the next downside target. First resistance is the 20-day moving average crossing at 9.577 then the 10-day moving average
crossing at 9.683. First support is last Thursday's low crossing at 8.750. Second support is the 50% retracement level of this
year's rally crossing at 8.732.
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Energy intraday
*
The oil market fluctuated Monday, searching for direction without much in the way of solid news to drive the market higher or lower. Retail gas prices, meanwhile, fell further from recent records, while diesel prices dipped slightly.
* Oil futures traded in a narrow range as a tug of war took place between speculators who have sold as the dollar gained strength, and investors who bought on a view that the economy -- and demand for oil and gasoline -- may not be as weak as initially thought.
*
Oil Price will range between $80 and $110 per barrel for the rest of 2008, Opec President Chakib Khelil said on yesterday. Khelil, who is also Algerian energy and mines minister, told Algerian television OPEC was under “big pressures” from consuming nations who liked to portray the group as responsible for high oil prices, when in fact the market was responding to US economic problems and the falling dollar.
*
Saudi Arabia Reaffirms Pledge to Meet Global Crude Oil Demand, The Supreme Council of Petroleum and Mineral Affairs, chaired by King Abdullah, agreed to work with the Organization of Petroleum Exporting Countries and non-OPEC countries to ensure oil market stability and ``prevent the effects of harmful speculation,'' the government body said in a statement posted late yesterday on the Web site of the state news agency
*
Crude oil fell for a third day in New York on signs that the slowing U.S. economy will cut fuel demand in the world's biggest energy consuming country. Oil is likely to slide further this spring as slow in economic growth encourages traders to exit commodity markets,
* South Korea's crude oil imports fell 2.4 percent in February as refiners reduced processing because of lower profit from turning each barrel of crude into fuels. The world's fifth-biggest crude oil buyer imported 68 million barrels last month compared with 69.7 million barrels a year earlier, according to data e-mailed by state-run Korea National Oil Corp. on March 21.
* There is fundamental support for natural gas to trade at these prices because of the storage and supply situation and its advanced on speculation colder temperatures will boost demand for the fuel for heating and reduced output from nuclear power plants will increase its use for power generation.
MCX Crude Oil April (Daily Chart)
Technical Outlook:
Momentum studies are bearish but are now at oversold levels and will tend to support reversal action if it occurs. The daily stochastics have crossed over down which is a bearish indication. The stochastics indicators are decreasing from overbought level, which is bearish and should support lower prices. The market's short-term trend is negative as the close remains below the 9-day EMA. The upside closing price reversal on the daily chart is somewhat positive.
Recommendations-MCX Crude Oil April: Sell at 4100 Target 4060 and 4000 Stop loss at 4145
MCX Natural gas April (Daily Chart)
Technical Outlook:
Momentum studies are bearish but are now at oversold levels and will tend to support reversal action if it occurs. The daily stochastics have crossed over down which is a bearish indication. The stochastics indicators are decreasing from overbought level, which is bearish and should support lower prices. The market's short-term trend is negative as the close remains below the 9-day EMA. The upside closing price reversal on the daily chart is somewhat positive.
Recommendations- MCX Natural Gas April: Sell at 370 Target 367 and 362 Stop loss 374
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The oil market fluctuated Monday, searching for direction without much in the way of solid news to drive the market higher or lower. Retail gas prices, meanwhile, fell further from recent records, while diesel prices dipped slightly.
* Oil futures traded in a narrow range as a tug of war took place between speculators who have sold as the dollar gained strength, and investors who bought on a view that the economy -- and demand for oil and gasoline -- may not be as weak as initially thought.
*
Oil Price will range between $80 and $110 per barrel for the rest of 2008, Opec President Chakib Khelil said on yesterday. Khelil, who is also Algerian energy and mines minister, told Algerian television OPEC was under “big pressures” from consuming nations who liked to portray the group as responsible for high oil prices, when in fact the market was responding to US economic problems and the falling dollar.
*
Saudi Arabia Reaffirms Pledge to Meet Global Crude Oil Demand, The Supreme Council of Petroleum and Mineral Affairs, chaired by King Abdullah, agreed to work with the Organization of Petroleum Exporting Countries and non-OPEC countries to ensure oil market stability and ``prevent the effects of harmful speculation,'' the government body said in a statement posted late yesterday on the Web site of the state news agency
*
Crude oil fell for a third day in New York on signs that the slowing U.S. economy will cut fuel demand in the world's biggest energy consuming country. Oil is likely to slide further this spring as slow in economic growth encourages traders to exit commodity markets,
* South Korea's crude oil imports fell 2.4 percent in February as refiners reduced processing because of lower profit from turning each barrel of crude into fuels. The world's fifth-biggest crude oil buyer imported 68 million barrels last month compared with 69.7 million barrels a year earlier, according to data e-mailed by state-run Korea National Oil Corp. on March 21.
* There is fundamental support for natural gas to trade at these prices because of the storage and supply situation and its advanced on speculation colder temperatures will boost demand for the fuel for heating and reduced output from nuclear power plants will increase its use for power generation.
MCX Crude Oil April (Daily Chart)
Technical Outlook:
Momentum studies are bearish but are now at oversold levels and will tend to support reversal action if it occurs. The daily stochastics have crossed over down which is a bearish indication. The stochastics indicators are decreasing from overbought level, which is bearish and should support lower prices. The market's short-term trend is negative as the close remains below the 9-day EMA. The upside closing price reversal on the daily chart is somewhat positive.
Recommendations-MCX Crude Oil April: Sell at 4100 Target 4060 and 4000 Stop loss at 4145
MCX Natural gas April (Daily Chart)
Technical Outlook:
Momentum studies are bearish but are now at oversold levels and will tend to support reversal action if it occurs. The daily stochastics have crossed over down which is a bearish indication. The stochastics indicators are decreasing from overbought level, which is bearish and should support lower prices. The market's short-term trend is negative as the close remains below the 9-day EMA. The upside closing price reversal on the daily chart is somewhat positive.
Recommendations- MCX Natural Gas April: Sell at 370 Target 367 and 362 Stop loss 374
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Basemetals intraday
§ US Feb existing home sales up 2.9 pct to 5.03 mln rate vs 4.85 mln expected and Sales of previously owned homes in the US rose in February after six straight months of declines, due in part to the largest ever year-over-year decline in home prices, the National Association of Realtors (NAR) said yesterday
*
Copper led declines on the Shanghai Futures Exchange on speculation a rally in the dollar and
rebounding equities will curb demand for alternative investments
*
Peruvian Copper Output Will Double by 2013, Peru is on track to produce 2.4 million tons of copper annually by 2013, from the current production rate of 1.2 million tons, the Lima-based daily said, citing Energy & Mines Minister Juan Valdivia.
*
Chile's gross domestic product expanded 4 percent in the fourth quarter of 2007, less than the
4.21 percent median estimate of 12 analysts surveyed by Bloomberg and GDP expanded 5.1 percent in 2007
*
Chile's National Mining Co. is accumulating stockpiles of unfinished copper that it is unable
to process at its smelters, Santiago newspaper La Tercera said. The company also may sell some material to bigger state-owned copper company Codelco for processing, the newspaper said
*
China – Feb month: Copper imports fall by 8.3% yr/yr, Nickel imports rise 7.79%to 13,042tones, Aluminium exports fall by 19% to 39,378 tones and Zinc imports fall by 23%.
*
Zinc prices also declined sharply in a broad-based metals sell-off as a monthly report by the International Lead and Zinc Study Group (ILZSG) showed a 26,600 tonne surplus in zinc for January 2008. Refined output for zinc in January 2008 stands at 1,004,900 tonnes while consumption was at 978,300 tonnes. The surplus in January 2008 was a decrease from the surplus of 43,800 tonnes seen in December 2007 but higher when compared to the 26,000 tonnes seen in January 2007.
*
National Aluminium Co., India's biggest aluminium maker, said it plans to shut one of its three production lines for maintenance work that may last a month. National Aluminium produces 1.58 million metric tons of the aluminium-making material annually
MCX Copper April (Daily Chart)
Technical Outlook:
Momentum studies are bearish but are now at oversold levels and will tend to support reversal action if it occurs. The daily stochastics have crossed over down which is a bearish indication. The stochastics indicators are decreasing from overbought level, which is bearish and should support lower prices. The market's short-term trend is negative as the close remains below the 9-day EMA. The upside closing price reversal on the daily chart is somewhat positive.
Recommendations - MCX Copper April: Sell at 325 Target 319 and 315 Stop loss 328.50
MCX Zinc March (Daily Chart)
Technical Outlook:
Momentum studies are bearish but are now at oversold levels and will tend to support reversal action if it occurs. The daily stochastics have crossed over down which is a bearish indication. The stochastics indicators are decreasing from overbought level, which is bearish and should support lower prices. The market's short-term trend is negative as the close remains below the 9-day EMA. The upside closing price reversal on the daily chart is somewhat positive.
Recommendations -MCX Zinc March: Sell at 94.50 Target 91 and 89 Stop loss at 96
MCX Nickel March (Daily Chart)
Technical Outlook:
Momentum studies are bearish but are now at oversold levels and will tend to support reversal action if it occurs. The daily stochastics have crossed over down which is a bearish indication. The stochastics indicators are decreasing from overbought level, which is bearish and should support lower prices. The market's short-term trend is negative as the close remains below the 9-day EMA. The upside closing price reversal on the daily chart is somewhat positive.
Recommendations: MCX Nickel March: Sell at 1165 Target 1148 and 1130 Stop loss at 1180
MCX Lead Feb (Daily Chart)
Technical Outlook:
Momentum studies are bearish but are now at oversold levels and will tend to support reversal action if it occurs. The daily stochastics have crossed over down which is a bearish indication. The stochastics indicators are decreasing from overbought level, which is bearish and should support lower prices. The market's short-term trend is negative as the close remains below the 9-day EMA. The upside closing price reversal on the daily chart is somewhat positive.
Recommendations: MCX Lead March: Sell at 112.50 Target 100.30 and 99.10 Stop loss 113.70
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*
Copper led declines on the Shanghai Futures Exchange on speculation a rally in the dollar and
rebounding equities will curb demand for alternative investments
*
Peruvian Copper Output Will Double by 2013, Peru is on track to produce 2.4 million tons of copper annually by 2013, from the current production rate of 1.2 million tons, the Lima-based daily said, citing Energy & Mines Minister Juan Valdivia.
*
Chile's gross domestic product expanded 4 percent in the fourth quarter of 2007, less than the
4.21 percent median estimate of 12 analysts surveyed by Bloomberg and GDP expanded 5.1 percent in 2007
*
Chile's National Mining Co. is accumulating stockpiles of unfinished copper that it is unable
to process at its smelters, Santiago newspaper La Tercera said. The company also may sell some material to bigger state-owned copper company Codelco for processing, the newspaper said
*
China – Feb month: Copper imports fall by 8.3% yr/yr, Nickel imports rise 7.79%to 13,042tones, Aluminium exports fall by 19% to 39,378 tones and Zinc imports fall by 23%.
*
Zinc prices also declined sharply in a broad-based metals sell-off as a monthly report by the International Lead and Zinc Study Group (ILZSG) showed a 26,600 tonne surplus in zinc for January 2008. Refined output for zinc in January 2008 stands at 1,004,900 tonnes while consumption was at 978,300 tonnes. The surplus in January 2008 was a decrease from the surplus of 43,800 tonnes seen in December 2007 but higher when compared to the 26,000 tonnes seen in January 2007.
*
National Aluminium Co., India's biggest aluminium maker, said it plans to shut one of its three production lines for maintenance work that may last a month. National Aluminium produces 1.58 million metric tons of the aluminium-making material annually
MCX Copper April (Daily Chart)
Technical Outlook:
Momentum studies are bearish but are now at oversold levels and will tend to support reversal action if it occurs. The daily stochastics have crossed over down which is a bearish indication. The stochastics indicators are decreasing from overbought level, which is bearish and should support lower prices. The market's short-term trend is negative as the close remains below the 9-day EMA. The upside closing price reversal on the daily chart is somewhat positive.
Recommendations - MCX Copper April: Sell at 325 Target 319 and 315 Stop loss 328.50
MCX Zinc March (Daily Chart)
Technical Outlook:
Momentum studies are bearish but are now at oversold levels and will tend to support reversal action if it occurs. The daily stochastics have crossed over down which is a bearish indication. The stochastics indicators are decreasing from overbought level, which is bearish and should support lower prices. The market's short-term trend is negative as the close remains below the 9-day EMA. The upside closing price reversal on the daily chart is somewhat positive.
Recommendations -MCX Zinc March: Sell at 94.50 Target 91 and 89 Stop loss at 96
MCX Nickel March (Daily Chart)
Technical Outlook:
Momentum studies are bearish but are now at oversold levels and will tend to support reversal action if it occurs. The daily stochastics have crossed over down which is a bearish indication. The stochastics indicators are decreasing from overbought level, which is bearish and should support lower prices. The market's short-term trend is negative as the close remains below the 9-day EMA. The upside closing price reversal on the daily chart is somewhat positive.
Recommendations: MCX Nickel March: Sell at 1165 Target 1148 and 1130 Stop loss at 1180
MCX Lead Feb (Daily Chart)
Technical Outlook:
Momentum studies are bearish but are now at oversold levels and will tend to support reversal action if it occurs. The daily stochastics have crossed over down which is a bearish indication. The stochastics indicators are decreasing from overbought level, which is bearish and should support lower prices. The market's short-term trend is negative as the close remains below the 9-day EMA. The upside closing price reversal on the daily chart is somewhat positive.
Recommendations: MCX Lead March: Sell at 112.50 Target 100.30 and 99.10 Stop loss 113.70
MCXARUN
9994500540
Bullion intraday
* Newmont Mining Corp. said annual output at its Minera Yanacocha SRL unit, Latin America's largest gold mine, would remain ``stable'' at 1.8 million ounces for several years, a company spokesman said today
* Gold and silver had rallied for seven straight years as a weaker dollar and soaring commodity prices spurred demand for precious metals as a hedge against inflation. Last week, gold fell the most since 1990 after the Federal Reserve cut interest rates less than expected, boosting the dollar and triggering a sell-off in raw materials
* Gold is looking to the dollar for direction and bullion prices raised in New York on speculation the dollar's advance against the euro will stall
* China has issued rules allowing the nation's commercial banks to trade gold futures, and the Banks must meet a 8 percent capital adequacy ratio and possess derivatives and gold trading licenses to trade gold futures, the China Banking Regulatory Commission said in a statement posted on its Web site yesterday. The statement is dated March 7.
* Gold was also led lower by a decline in crude oil, reducing the appeal of bullion as a hedge against inflation. The UBS Bloomberg Constant Maturity Commodity Index fell 7.4 percent last week, the biggest drop since October 1997, when the data started. Still, the index is up 9.6 percent for the year
*
§ Gold declined after its biggest weekly drop for 25 years as a gain in the dollar eroded demand for alternative investments such as bullions fell and Dollar-denominated gold also tends to fall when the U.S currency gains as it becomes more expensive for holders of other currencies
US Economy:
§ US Fed's TAF to auction 50 bln usd for 28 days at minimum 2.19 pct, the US Federal Reserve will conduct the second of its expanded 50 bln usd auctions through its Term Auction Facility (TAF)
§ The Federal Housing Finance Board said Monday it has authorized federal home loan banks to increase their purchase of agency mortgage-backed securities (MBS), effective immediately. Pursuant to the resolution, the FHFB said the limit on federal home loan bank’s MBS investment authority would increase from 300% of capital to 600% of Capital for two years.
MCX Gold Apr (Daily Chart)
Technical Outlook: Momentum studies are bearish but are now at oversold levels and will tend to support reversal action if it occurs. The daily stochastics have crossed over down which is a bearish indication. The stochastics indicators are decreasing from overbought level, which is bearish and should support lower prices. The market's short-term trend is negative as the close remains below the 9-day EMA. The upside closing price reversal on the daily chart is somewhat positive.
Recommendations - MCX Gold April: Buy at 11860 Target 11950 and 12030 Stop loss at 11790
MCX Silver May (Daily Chart)
Technical Outlook: Momentum studies are bearish but are now at oversold levels and will tend to support reversal action if it occurs. The daily stochastics have crossed over down which is a bearish indication. The stochastics indicators are decreasing from overbought level, which is bearish and should support lower prices. The market's short-term trend is negative as the close remains below the 9-day EMA. The upside closing price reversal on the daily chart is somewhat positive.
Recommendations -MCX Silver May: Buy at 21755 Target 22050 and 22300 Stop loss 21610
MCXARUN
9994500540
* Gold and silver had rallied for seven straight years as a weaker dollar and soaring commodity prices spurred demand for precious metals as a hedge against inflation. Last week, gold fell the most since 1990 after the Federal Reserve cut interest rates less than expected, boosting the dollar and triggering a sell-off in raw materials
* Gold is looking to the dollar for direction and bullion prices raised in New York on speculation the dollar's advance against the euro will stall
* China has issued rules allowing the nation's commercial banks to trade gold futures, and the Banks must meet a 8 percent capital adequacy ratio and possess derivatives and gold trading licenses to trade gold futures, the China Banking Regulatory Commission said in a statement posted on its Web site yesterday. The statement is dated March 7.
* Gold was also led lower by a decline in crude oil, reducing the appeal of bullion as a hedge against inflation. The UBS Bloomberg Constant Maturity Commodity Index fell 7.4 percent last week, the biggest drop since October 1997, when the data started. Still, the index is up 9.6 percent for the year
*
§ Gold declined after its biggest weekly drop for 25 years as a gain in the dollar eroded demand for alternative investments such as bullions fell and Dollar-denominated gold also tends to fall when the U.S currency gains as it becomes more expensive for holders of other currencies
US Economy:
§ US Fed's TAF to auction 50 bln usd for 28 days at minimum 2.19 pct, the US Federal Reserve will conduct the second of its expanded 50 bln usd auctions through its Term Auction Facility (TAF)
§ The Federal Housing Finance Board said Monday it has authorized federal home loan banks to increase their purchase of agency mortgage-backed securities (MBS), effective immediately. Pursuant to the resolution, the FHFB said the limit on federal home loan bank’s MBS investment authority would increase from 300% of capital to 600% of Capital for two years.
MCX Gold Apr (Daily Chart)
Technical Outlook: Momentum studies are bearish but are now at oversold levels and will tend to support reversal action if it occurs. The daily stochastics have crossed over down which is a bearish indication. The stochastics indicators are decreasing from overbought level, which is bearish and should support lower prices. The market's short-term trend is negative as the close remains below the 9-day EMA. The upside closing price reversal on the daily chart is somewhat positive.
Recommendations - MCX Gold April: Buy at 11860 Target 11950 and 12030 Stop loss at 11790
MCX Silver May (Daily Chart)
Technical Outlook: Momentum studies are bearish but are now at oversold levels and will tend to support reversal action if it occurs. The daily stochastics have crossed over down which is a bearish indication. The stochastics indicators are decreasing from overbought level, which is bearish and should support lower prices. The market's short-term trend is negative as the close remains below the 9-day EMA. The upside closing price reversal on the daily chart is somewhat positive.
Recommendations -MCX Silver May: Buy at 21755 Target 22050 and 22300 Stop loss 21610
MCXARUN
9994500540
Buy Gold Now? (source:goldseek)
Last week has to be one of the most stunning in the history of financial markets.
It started with the weekend sale of venerable Bear Stearns to JP Morgan for the laughably low price of $2 a share set the tone for what will be remembered as a prophetic event for the week that followed, and ultimately, for the months that will follow.
The Fed has essentially funded the sale of a distressed asset to avoid the collapse of Bear Stearns, which, if allowed to happen, would put so many other banks into a state of insolvency that the domino effect would ultimately cause more big banking names to fall. The term “capitulation” comes to mind.
So what has happened, is the Fed is exercising its right to print money with renewed abandon, comforted by the short term validation of its strategy afforded by the Dow’s responsive surge. Casual observers might be forgiven for interpreting the bear market rally, representative more of short covers and delusional optimists than of relative strength, for signs that the crisis is over, the market has bottomed, and business as usual is imminent.
But hold the phone. Is this the bottom of the well, or merely a ledge hit on the plummet to resume shortly?
Bet on number 2. Though both gold and oil have taken a near 10% hit during the last few sessions, and sure the Dow has piled on 400+ points in two sessions in the last two weeks, there is much, much more to come.
The confidence in the dollar and the Dow expressed in terms of gold, oil and commodities sell-offs is partially a reaction to the swift and decisive actions Ben Bernanke. The general feeling on Wall Street is one of suppressed awe for the utter absence of hesitation the Fed chairman has demonstrated in the face of the crisis. His creativity and resourcefulness during this time is admirable.
The turbulence ahead will no doubt be tempered by such deftness.
But, and this is the big “but”, the next 10 to 12 weeks are going to be no less chaotic then we’ve those we’ve been enjoying in 2008.
Next up on the Price is Wrong is commercial mortgages and their asset-backed derivatives.
There’s no doubt about the fact that the U.S. is suffering a downturn in economic vitality.
New Residential construction numbers announced Tuesday last week indicated a 36.5% drop in building permits issued since last February, and the numbers were down 7.8% for the quarter. Other key economic indicators confirm the slowdown in consumer spending across all areas of the economy. The result: business is slowing down in tandem.
So with business in a contraction mode, all those new office buildings in various degrees of completion add up to an oversupply of office and commercial space inventory, with the accompanying effect of falling prices. Add to that the inability of anywhere from 80% or higher of the commercial paper underwriting the financing of that construction to renew, and you’ve got a recipe for defaults on a scale that will make the residential mortgage problem tame in comparison.
According to a Wall Street Journal article dated March 22:
The spread on the CMBX Triple-A series 3 index has fallen to around 1.90 percentage points, its lowest level since late February.
That kind of a reading on the triple-A CMBX indexes implies cumulative default rates on the underlying loans of as high as 100%, players say, depending on the assumptions made for recoveries that would follow defaults.
The CMBX Triple A index tracks the cost of protection against default on a series of securities backed by commercial mortgages.
The major difference between commercial mortgage backed securities versus those backed by residential mortgages is exposure. Whereas most residential mortgage-backed securities are represented by hundreds of individual mortgages slices, its not uncommon for a single commercial mortgage to comprise up to 10% of any individual security. That means the quality of the entire issue can crash if just one mortgage defaults.
This is what Ben Bernanke is facing next, and the only real weapon left in the arsenal is more cash, which is okay for the short term, but the dollar is becoming more and more worthless with every billion dollar bailout.
It was exactly a year ago next week that China began to divest itself of US treasuries for the first time in seven years. With the value of all U.S. denominated foreign holdings free falling in value, other currencies are being sucked into the vortex.
All this means is that gold is going to grow in stature as a perceived store of value as long as the carnage continues.
During the first half of 2007, overall investment in gold was relatively weak; identifiable investment was 22% lower than one year earlier while statistically residual “inferred investment” was substantially negative. In Q3, while inferred investment was close to zero, identifiable investment soared as a result of record quarterly inflows into gold Exchange Traded Funds (ETF). In Q4 identifiable investment was more subdued, as retail investors took profits and ETF inflows steadied, but inferred investment became strongly positive. In dollar terms total net gold investment in Q4 reached just over $8bn – a quarterly record.
The $95 price drop in gold this past week is therefore nothing short of a gift. An unparalleled buying opportunity that will quickly be acted on, and one of a likely good number, as the volatility in the commodities, debt, and equities markets is going to stay high for the foreseeable future.
Next stop: $2,000 gold.
MCXARUN
9994500540
It started with the weekend sale of venerable Bear Stearns to JP Morgan for the laughably low price of $2 a share set the tone for what will be remembered as a prophetic event for the week that followed, and ultimately, for the months that will follow.
The Fed has essentially funded the sale of a distressed asset to avoid the collapse of Bear Stearns, which, if allowed to happen, would put so many other banks into a state of insolvency that the domino effect would ultimately cause more big banking names to fall. The term “capitulation” comes to mind.
So what has happened, is the Fed is exercising its right to print money with renewed abandon, comforted by the short term validation of its strategy afforded by the Dow’s responsive surge. Casual observers might be forgiven for interpreting the bear market rally, representative more of short covers and delusional optimists than of relative strength, for signs that the crisis is over, the market has bottomed, and business as usual is imminent.
But hold the phone. Is this the bottom of the well, or merely a ledge hit on the plummet to resume shortly?
Bet on number 2. Though both gold and oil have taken a near 10% hit during the last few sessions, and sure the Dow has piled on 400+ points in two sessions in the last two weeks, there is much, much more to come.
The confidence in the dollar and the Dow expressed in terms of gold, oil and commodities sell-offs is partially a reaction to the swift and decisive actions Ben Bernanke. The general feeling on Wall Street is one of suppressed awe for the utter absence of hesitation the Fed chairman has demonstrated in the face of the crisis. His creativity and resourcefulness during this time is admirable.
The turbulence ahead will no doubt be tempered by such deftness.
But, and this is the big “but”, the next 10 to 12 weeks are going to be no less chaotic then we’ve those we’ve been enjoying in 2008.
Next up on the Price is Wrong is commercial mortgages and their asset-backed derivatives.
There’s no doubt about the fact that the U.S. is suffering a downturn in economic vitality.
New Residential construction numbers announced Tuesday last week indicated a 36.5% drop in building permits issued since last February, and the numbers were down 7.8% for the quarter. Other key economic indicators confirm the slowdown in consumer spending across all areas of the economy. The result: business is slowing down in tandem.
So with business in a contraction mode, all those new office buildings in various degrees of completion add up to an oversupply of office and commercial space inventory, with the accompanying effect of falling prices. Add to that the inability of anywhere from 80% or higher of the commercial paper underwriting the financing of that construction to renew, and you’ve got a recipe for defaults on a scale that will make the residential mortgage problem tame in comparison.
According to a Wall Street Journal article dated March 22:
The spread on the CMBX Triple-A series 3 index has fallen to around 1.90 percentage points, its lowest level since late February.
That kind of a reading on the triple-A CMBX indexes implies cumulative default rates on the underlying loans of as high as 100%, players say, depending on the assumptions made for recoveries that would follow defaults.
The CMBX Triple A index tracks the cost of protection against default on a series of securities backed by commercial mortgages.
The major difference between commercial mortgage backed securities versus those backed by residential mortgages is exposure. Whereas most residential mortgage-backed securities are represented by hundreds of individual mortgages slices, its not uncommon for a single commercial mortgage to comprise up to 10% of any individual security. That means the quality of the entire issue can crash if just one mortgage defaults.
This is what Ben Bernanke is facing next, and the only real weapon left in the arsenal is more cash, which is okay for the short term, but the dollar is becoming more and more worthless with every billion dollar bailout.
It was exactly a year ago next week that China began to divest itself of US treasuries for the first time in seven years. With the value of all U.S. denominated foreign holdings free falling in value, other currencies are being sucked into the vortex.
All this means is that gold is going to grow in stature as a perceived store of value as long as the carnage continues.
During the first half of 2007, overall investment in gold was relatively weak; identifiable investment was 22% lower than one year earlier while statistically residual “inferred investment” was substantially negative. In Q3, while inferred investment was close to zero, identifiable investment soared as a result of record quarterly inflows into gold Exchange Traded Funds (ETF). In Q4 identifiable investment was more subdued, as retail investors took profits and ETF inflows steadied, but inferred investment became strongly positive. In dollar terms total net gold investment in Q4 reached just over $8bn – a quarterly record.
The $95 price drop in gold this past week is therefore nothing short of a gift. An unparalleled buying opportunity that will quickly be acted on, and one of a likely good number, as the volatility in the commodities, debt, and equities markets is going to stay high for the foreseeable future.
Next stop: $2,000 gold.
MCXARUN
9994500540
What is Behind This Sharp Correction in Gold
What caused such a vicious correction in commodities which took gold along for the ride? We have recently expressed concerns that sentiment became overly optimistic and a technical correction was needed to relieve overbought conditions.
But why was the correction so sharp? The main reason is that the de-leveraging process began to spread from financial paper, particularly mortgage backed securities, into other markets including the commodities sector. Stricter lending standards are causing traders to reduce overall positions, decrease risk and reduce their dependence on borrowed funds. Led by the hedge funds, the highly leveraged players started selling speculative positions in commodities. The correction happened in an instant as some hurried to take profits, while others were met with margin calls.
Excess cash was quickly funneled into the shortest maturity government debt – 3-month T-Bills, which typically approximate the fed funds rate set by the Federal Reserve. As a result, the T-Bill yields collapsed to a historic low of under 0.50%, light years away from the fed funds rate of 2.25%.
The chart of the 3-month T-Bill yields above shows an extreme level of panic in the markets. Traders are operating by a philosophy of “sell first, think later,” dumping all of their proceeds into what is perceived to be the safest possible short term investment.
The flight to safety panic cannot continue much further and this unusual amount of cash sitting in T-Bills will have to find a home elsewhere. It will return to the most oversold sectors of the stock market, stabilizing precious metals and related stocks in the process.
MCXARUN
9994500540
But why was the correction so sharp? The main reason is that the de-leveraging process began to spread from financial paper, particularly mortgage backed securities, into other markets including the commodities sector. Stricter lending standards are causing traders to reduce overall positions, decrease risk and reduce their dependence on borrowed funds. Led by the hedge funds, the highly leveraged players started selling speculative positions in commodities. The correction happened in an instant as some hurried to take profits, while others were met with margin calls.
Excess cash was quickly funneled into the shortest maturity government debt – 3-month T-Bills, which typically approximate the fed funds rate set by the Federal Reserve. As a result, the T-Bill yields collapsed to a historic low of under 0.50%, light years away from the fed funds rate of 2.25%.
The chart of the 3-month T-Bill yields above shows an extreme level of panic in the markets. Traders are operating by a philosophy of “sell first, think later,” dumping all of their proceeds into what is perceived to be the safest possible short term investment.
The flight to safety panic cannot continue much further and this unusual amount of cash sitting in T-Bills will have to find a home elsewhere. It will return to the most oversold sectors of the stock market, stabilizing precious metals and related stocks in the process.
MCXARUN
9994500540
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