Market Insights for Friday, February 13, 2015

Sitting in while Roy Friedman is out for two weeks, is Peter Aan, a Dillon Gage Metals Trader. Here are his Market insights:

Gold traded without much sense of direction on Thursday, with the entire range within Wednesday’s range. The fall from January’s high has brought the market to an oversold condition on the Bollinger Bands, and Thursday’s reluctance to work lower may reflect that oversold condition. Also, the fall of recent weeks is an approximate 50% correction of the uptrend from the November low. If the market wants to trend lower, the first notable support area is the Jan 2 low of 1168.30 (basis the April contract). On the bullish side, a penetration, especially on a closing basis, of this week’s high of 1245.90 would be the first solid indication that a new leg to the upside might be underway.

Silver also lacked direction on Thursday, settling a little higher. The range of the last four days is completely within last Friday’s range. Short-term support is clear here—Friday’s low of 16.545 (basis March). If that is penetrated, we could see movement towards the support formed in the latter half of January in the 15.51 to 15.54 area. If the bulls take control, the first resistance level to watch for is the February 3rd high of 17.75.

Platinum formed an inside day on Thursday, and like gold, may have found some support at the lower Bollinger Band. If we work lower, we could test the January 2 low of 1187.70 (basis April) and the massive support at the December low of 1176.30, the lowest low for Platinum since mid-2009.

Palladium was likewise trendless Thursday, a term that could also describe the action of the last few months in both Platinum and Palladium. Thursday’s range was inside of Wednesday’s range, which was inside of Tuesday’s range. Early action today shows a breakout of the highs of the previous two days, short-term bullish. Minor support exists at the Tuesday low of 763.60 (basis March), 758.0, and more important support at the January low of 746.0. If we break to the upside, look for movement towards the February high of 799.

Peter Aan joined Dillon Gage in 1983, and is currently a metals trader for their metals division. He is the author of numerous articles for Futures magazine and Stocks and Commodities magazine. He is the author of The Relative Strength Index: A Comprehensive Research Report and a co-author of Trading Tactics: A Livestock Futures Anthology, published by the Chicago Mercantile Exchange.