Merry and Bright - by Gary Wagner

Merry and Bright

Well, not so much gold and crude. Pricing continues under pressure for those two leading commodities and the end of the downward push is nowhere in sight.
Oil is a bit more complex than gold, but here is the short version on today’s slide. Supplies are building. No major producer has cut production and it is going into storage. They’re doing this in hopes that prices will turn around. The perverse effect is that such tactics only drive the price down lower. As you probably well know, this is a tactic that other commodity producers use when prices are low. Coffee is notorious for that game play. You probably also know that eventually it catches up with the commodity in question. A glut is a glut is a glut.
Gold, of course, has an assigned value, more or less agreed upon in the marketplace by traders and investors. It moves in relation to money; equities and outside markets such as oil. The relationships are clear. How those relationships move mechanically is not always clear.
Fundamentally at the moment we have some clear signals that do not look bullish. The U.S. economy is bellowing and snarling, a pent-up beast finally unleashed. So, a need for safe haven is out of the question. Crude keeps dragging gold with it. Unless consumption somehow ramps up and production is ratcheted down, there is no good reason why the price should rise anytime soon. And if oil rises, it won’t rise much.

Some analysts and think-tankers are saying that the Saudis and a few of their cohorts in league with the United States are keeping prices as low as possible to hurt ISIL/ISIA and to punish the Russians and other pro-Assad forces in Syria. It’s a sort of win-win for the forces of stability at any price.
Just as an aside, the Saudis have about $1.4 trillion in reserves. They could stop producing oil tomorrow and have 10-years’ worth of money in the bank.
Let’s be reminded that volatility is our main watchword in the holiday season. Today has been extraordinarily quiet, as will be Friday and much of next week.
Wishing you as always, good trading, and to all a good night…
Gary Wagner

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Quiet Ahead Of Santa - by Peter Hug

Quiet Ahead Of Santa

Markets are very subdued, with a shortened session in North America, and London gone for the day, as you slip into the office this morning.  May be a bit more volatility before the egg nog breaks out, but by noon the tapes should be begin to flat line as the futures shut down after lunch.
I wish everyone a safe and happy holiday.

By Peter Hug

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Where are the Stops? Wednesday, December 24: Gold and Silver

Editor's Note: Professional traders have a very good idea of price levels at which buy and sell stop orders are located on a daily basis. And now you will, too! If pre-placed buy or sell stop order are triggered, bigger price moves can immediately follow. Most stop orders are located and placed based upon key technical support or resistance levels on the daily chart, which if breached, would significantly change the near-term technical posture of that market. Having a good idea, beforehand, where the buy and sell stops are located can give an active trader a better idea regarding at what price level buying or selling pressure will become intensified in that market.

Below are today's likely price locations of buy and sell stop orders for the active Comex gold and silver futures markets. The asterisks (**) denote the most critical stop order placement level of the day (or likely where the heaviest concentration of stop orders are placed on this day).
See below a detailed explanation of stop orders and why knowing, beforehand, where they are likely located can be beneficial to a trader.

February Gold	Buy Stops	Sell Stops
	$1,184.90	$1,181.20
	$1,190.00	$1,173.40
	**$1,200.00	**$1,170.70
	$1,203.60	$1,150.00
March Silver	Buy Stops	Sell Stops
	$16.00	$15.69
	**$16.175	**$15.53
	$16.50	$15.35
	$16.81	$15.085

Stop Orders Defined
Stop orders in trading markets can be used for three purposes: One: To minimize a loss on a long or short position (protective stop). Two: To protect a profit on an existing long or short position (protective stop). Three: To initiate a new long or short position. A buy stop order is placed above the market and a sell stop order is placed below the market. Once the stop price is touched, the order is treated like a “market order” and will be filled at the best possible price.
Most stop orders are located and placed based upon key technical support or resistance levels on the daily chart, which if breached, would significantly change the near-term technical posture of that market.
Having a good idea, beforehand, where the buy and sell stops are located can give an active trader a better idea regarding at what price level buying or selling pressure will become intensified in that market.
The major advantage of using protective stops is that, before a trade is initiated, you have a pretty good idea of where you will be getting out of the trade if it's a loser. If the trade becomes a winner and profits begin to accrue, you may want to employ "trailing stops," whereby protective stops are adjusted to help lock in a profit should the market turn against your position.
By Jim Wyckoff

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Wednesday's Analytical Charts for Gold, Silver and Platinum and Palladium

Understanding the charts:

Due to popular demand, we have added Palladium to the list of Analytical Charts that Metals Analyst Jim Wyckoff features.

Sharpening Your Trading Skills: Using Bollinger Bands

Sharpening Your Trading Skills: The MACD Indicator

Sharpening Your Trading Skills: Moving Averages

Sharpening Your Trading Skills: The Relative Strength Index (RSI)

"Wyckoff's Market Rating" System Explained

By Jim Wyckoff

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