The Economic Times
NEW YORK: Gold’s 20-day moving average falling below its 200-day and its brief foray into a bear market suggest momentum has turned bearish and a further pullback could be on its way. Bullion’s 20-day moving average (DMA) dipped below its 200 DMA on Thursday, in what technical analysts termed a “death cross,” as short-term momentum has turned more negative than long-term momentum and could show that the current downtrend is pervasive.
“Any time there is a death cross. The market is telling us that the underlying strength has changed from bullish to bearish,” said Adam Sarhan, chief executive of Sarhan Capital. Sarhan compared gold’s technical charts in December to a slow-motion train wreck , with the metal having plunged below its long-term upward trendline for the first time in three years and its key 200 DMA.
Gold is on track to end the fourth quarter with its first quarterly loss since September 2008 when Lehman Brothers collapsed, marking the peak of the global economic crisis.
“When you start seeing a lot more bearish technical events occurring, more and more shorter-term traders are inclined to selling their positions,” Sarhan said. Spot gold rose 2 percent to above $1,580 an ounce on Friday in a rebound rally, a day after it briefly dropped more than 20 percent from its record high of $1,920.30 set on Sept. 6, flirting with the common definition of a bear market. The last time a clear death cross formed was in August 2008, following gold’s sharp rally toward $1,000 an ounce. The metal then tumbled to around $680 an ounce in October 2008, just two months after its 20 DMA plunged below its 200 DMA.
“A negative crossover in moving averages can be seen as a selling signal,” said Tim Riddell, head of ANZ Global Markets Research, Asia. “But in gold’s profile, it is probably a confirmation signal that gold has made a cyclical high in the third quarter, and will likely see a more protracted consolidation phase than the market would initially wish to see,” Reiddell said.
ON 01/15/16 AT 9:42 AM BY ANGELO YOUNG This story was updated at 11:00 a.m. EST. U.S. stocks opened sharply lower Friday in a rocky final trading session of the week as both Chinese stocks and oil prices plunged, heightening concerns that a global recession is underway that could spill into the U.S. economy. U.S….
Thursday, July 13, 2017 Shares of Target climbed 4.8 percent after the company said it expects “modest increase” in second-quarter comparable-store sales. The SPDR S&P Retail exchange-traded fund (XRT) gained 2.3 percent. Shares of Wal-Mart, Kohl’s, Costco and Macy’s rose as well. Wall Street also set its sights on Washington. Federal Reserve Chair Janet Yellen…
Monday, September 24, 2012 Diane Alter: Investing in gold and silver already offered staggering profit potential, and the opportunities just got even brighter. Gold this week reached a “golden cross” and silver is perched to traverse one in a matter a days, following successive weeks of bullish trends in both precious metals’ markets. A golden…
The Old Timers Aren’t Bullish On Stocks… Are You? http://www.forbes.com/sites/adamsarhan/2016/10/17/the-old-timers-arent-bullish-on-stocks-are-you/#717d071470e6
U.S. stocks traded lower on Thursday, giving back their initial gains, as investors eyed ongoing negotiations between Greece and its creditors. “We’re going to be held hostage with our perception of what’s going on in Greece,” said Art Hogan, chief market strategist at Wunderlich Securities. The major averages struggled to hold gains amid reports that…
SEP 16, 2015 @ 04:24 PM It’s going to be a hard row to plow for a number of emerging markets if the Federal Reserve Bank raises interest rates on Thursday as some expect. Moody’s said on Wednesday that at least two BRIC markets, namely Brazil and Russia, were in for an even ruder awakening…