Nymex Crude Oil (CL)
After some initial choppy sideway consolidation, Crude oil's fall resumed last week and dipped to as low as 75.57, just inch above 38.2% retracement of 65.05 to 82 at 75.53. Initial bias will remain on the downside this week and further fall should be seen to 61.8% retracement at 71.52. On the upside, while some recovery might be seen, short term outlook will remain bearish as long as 80.51 resistance holds.
In the bigger picture, we'd continue to slightly favor the bearish case as long as 80.51 resistance holds. That is, a medium term top is formed at 82.0 on bearish divergence conditions in daily MACD as whole rise from 33.2 has completed. Break of trend line support (now at 69.39) will add more credence to this case and bring deeper fall to 58.32 cluster support (50% retracement of 33.2 to 82 at 57.60) for confirmation. However, break of 80.51 will indicate that price actions from 82.0 are merely consolidations in the medium term rise only. FUrther break of 82.0 will bring medium term rise resumption. However, as we expect such rise to conclude inside resistance zone of 76.77/90.24 (38.2% and 50% retracement of 147.27 to 33.2), focus will remain on loss of momentum and reversal signal even in case of another rise.
.In the long term picture, there is no change in the view that fall from 147.27 is part of the correction to the five wave sequence from 98 low of 10.65. While there rebound from 33.2 is strong and might continue, there is no solid evidence that suggest fall 147.27 is completed and we're still preferring the case that rebound from 33.2 is merely a corrective rise only. Having said that strong resistance should be seen between 76.77/90.24 fibo resistance zone and bring reversal for another low below 33.2 before completing the whole correction from 147.27.
Comex Gold (GC)
Gold's uptrend was still in progress and reached new record high of 1123.4 last week before retreating mildly. Upside momentum is clearly diminishing with bearish divergence conditions in 4 hours MACD. But Friday's strong rebound argues that 1123.4 might not be the top yet. INitial bias is neutral this week. Above 1123.4 will bring rise resumption to next fibonacci target of 61.8% projection of 681 to 1007.7 from 931.3 at 1133.2. On the downside, however, below 1098.5 support will confirm that a short term top is at least formed and deeper fall should be seen to lower channel support (now at 1053) first.
In the bigger picture, the long term up trend in Gold is still in progress. Rise from 681 would likely develop into another set of five wave sequence with first wave completed at 1007.7, second wave triangle consolidation completed at 931.3. Rise from 931.3 is treated as the third wave and is expected to extend to 61.8% projection of 681 to 1007.7 from 931.3 at 1133.2 first and then 100% projection at 1258 next. On the downside, break of 1072 resistance turned support will suggest that a short term top is formed and bring consolidation. But we'll hold on to the bullish view as long as 931.3 key support holds.
In the long term picture, as discussed before, rise form 681 is treated as resumption of the long term up trend from 1999 low of 253 after interim consolidation from 1033.9 has completed in form of an expanding triangle. The strong break of 1033.9 resistance affirms this case and should pave the way to 61.8% projection of 253 to 1033.9 from 681 at 1160 and then 100% projection at 1460 level. However, break of 931.3 support will indicate that medium term rise from 681 has possibly completed. This will also open up the case that long term consolidation from 1033.9 is not completed yet and has just started the third falling leg.
Comex Silver (SI)
Silver continued to engage in choppy sideway trading last week but the development so far is slightly favoring the case that rise from 16.12 has completed at 17.78 already. Initial bias should be mildly on the downside this week and break of 17.16 support again will bring deeper fall to retest 16.12 low first. On the upside, however, break of 17.78 will indicate that rise from 16.12 is still in progress and has resumed for a test on 18.175 high.
In the bigger picture, as long as 17.78 resistance holds, we'd slightly favor the case that silver's rise from 12.435 has completed at 18.175 already. Also, silver could be forming a head and shoulder top reversal pattern for the moment. Break of 16.12 support will confirm this bearish case and target lower trend line support at (now at 13.5) first. On the upside, however, break of 17.78 will dampen this bearish view and in turn suggest that medium term rally is still in progress. Further break of 18.175 will target 19.55/21.55 resistance zone. But after all, rise from 8.4 is treated as part of the long term, wide range, consolidation pattern that started at 21.44 back in Mar 08/. Hence, upside is expected to be limited inside this 19.55/21.44 resistance zone and bring another medium term fall.
In the longer term picture, the up trend from 01 low of 4.01 topped out at 21.44 and subsequent price actions are treated as correction/consolidation to this up trend. Fall from 21.44 completed after drawing support form 8.5 key level. However, subsequent rally from 8.4 is not displaying a clear impulsive structure yet and hence, we'd prefer the case that it's just the second wave of the wide range consolidation pattern. Another medium term fall should still be seen for retesting 8.5 before completing the consolidation. Nevertheless, strong support is still expected at 5.45/8.5 support zone to conclude the consolidation.
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