Sunday, 24 July 2011

July a good time of the year to buy Gold

The Gold bull market began in 1999, but really kicked off strongly upwards in 2001. Strictly speaking, any time since the turn of a century has been a good time to buy Gold, but most years July has been the best month to buy for those who like to get quickly ahead on new positions (all of us, presumably).

This log scale chart illustrates that each year other than 2006 and 2008, the mid-year period, usually July but sometimes August, has given birth to a bull move that has run through to Christmas or longer.

So what about this year? Let's have a look at the daily chart.

Gold has broken above the topmost parallel trading channel line, and also has resumed trading above the trend line drawn from the January lows. Both bullish signs. This chart is arithmetic scale.

Why do I place so much value in those parallel trading channel lines? Let's zoom out a bit.

This arithmetic scale chart shows that the same parallel trading channel angle has been evident for most the century. I find it worthwhile to always check both the arithmetic scale and log scale charts. Whichever scale gives the nicest trend lines, is the one I favour.

S&P 500 daily chart trend up, bigger picture bearish


The daily chart trend is up. I don't have high confidence that it will continue long, due to the bearish big picture...

Monthly candlestick chart. Whether or not you entertain the possibility of the extremely bearish Head and Shoulders labelling, the parallel trend line does seem to be acting as resistance.


Footnote: What about the other stock markets that I usually review each weekend? For each of them I either have nothing new to add, or their charts are as clear as mud. In an attempt to increase the signal to noise ratio of this site, I won't post their charts til there's good reason to do so.

AUD/USD daily chart trend up, bigger picture topping

Daily chart trend is now clearly up, with the market beating the parallel trend line, and now seemingly on its way to re-test the May high.

Monthly chart. Unless/until the market can beat those trend lines, I think it is topping. This is reinforced by the 0.618 Fibo retracement and Elliott Wave count illustrated on the 40 year chart.


Footnote: What about the other currencies that I usually review each weekend? For each of them I either have nothing new to add, or their charts are as clear as mud. In an attempt to increase the signal to noise ratio of this site, I won't post their charts til there's good reason to do so.