#Gold #SP500 The markets are producing movements never before experienced. We’re more than a little concerned as despite any possible near term rebound, an awful lot of triggers were demolished which permit further weakness into the realms of doom. Brent proved a case in point. Our last report had $39 as “bottom”, a number which was ignored when the market gapped the price down at the open of trade, the day starting at 37.5 dollars before trading even commenced.
Equally, Gold is supposed to be a defensive commodity, we’d guess the metals density making it useful to hit anyone suspected of carrying Covid-19. Gold, thus far, has avoided making serious panic gains above the 1700 level. Perhaps Toilet Paper shall prove to be the new Gold, if panic buying is a reliable indicator!
The price of Brent is a certain concern, gapped down to open the week at 37.50 dollars. Usually we’re able to back test this sort of thing in an attempt to find a trend we’d previously missed. Unfortunately, on the occasion, we’re far from comfortable. Crude dropped further than we’d normally expect, now residing in a region with some pretty dire drop potentials.
Just over 4 years ago, Brent hit a market bottom at 27.8 dollars, a number we’d first mooted when it was trading at 107. And to be honest, while we mentioned the potential, we also ridiculed it, thinking the potential highly improbable. This time, we’re not being as cautious!
The situation now calculates with weakness below 31 dollars allowing reversal to an initial 25 dollars. If (or doubtless, when) broken, our secondary works out at a bottom of 15 dollars. We believe, if 15 dollars ever makes an appearance, Brent must bounce. Several reasons support such a theory. Firstly, since 2016, three quite distinct scenario now allow an eventual bottom of 15 dollars. Secondly, we cannot calculate anything below such a level.
Shown on the chart below is the immediate downtrend, suggesting the product price needs almost double to 60 dollars to rejoin prior trends.
Perhaps of greater concern should be the proposed target levels, each below the markets prior disaster level of 27.8 dollars. The implicit suggestion therefore is the best we can hope is an entirely new trend shall develop in the future, one which will find difficulty taking the product to prior levels.
Unless, of course, something happens in the world and proves able to change the perception of “demand” for crude oil.
|
Time Issued |
Market |
Price At Issue |
Short Entry |
Fast Exit |
Slow Exit |
Stop |
Long Entry |
Fast Exit |
Slow Exit |
Stop |
Prior |
|
10:19:54PM |
BRENT |
33.58 |
Success | ||||||||
|
10:22:15PM |
GOLD |
1677.41 |
1632 |
1611.5 |
1581 |
1670 |
1703 |
1730.5 |
1776 |
1663 |
|
|
10:28:07PM |
FTSE |
5755 |
Yes | ||||||||
|
10:32:57PM |
FRANCE |
4575.8 |
Yes | ||||||||
|
10:35:57PM |
GERMANY |
10279 |
Yes | ||||||||
|
10:40:01PM |
US500 |
2732 |
2700 |
2655 |
2557 |
2787 |
2812 |
2826 |
2868 |
2751 |
Yes |
|
11:01:54PM |
DOW |
23781 |
Yes | ||||||||
|
11:06:11PM |
NASDAQ |
8036.82 |
Yes | ||||||||
|
11:09:40PM |
JAPAN |
19093 |
And yes |
