20THJAN2010GOLD
Gold is still bounded in sideway consolidation in tight range for the moment and intraday bias remains neutral. With 1119.2 support intact, another rise could still be seen and above 1163 will bring stronger rebound into 1169.3/1227.5 resistance zone. However, upside should be limited there and bring another fall to continue to consolidation pattern from 1227.5. On the downside, below 1119.2 will suggest that recovery from 1075.2 has completed already and will flip intraday bias back to the downside for 1075.2 and below.
In the bigger picture, rise from 681 is expected to develop into a 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 has possibly completed at 1227.5 after missing 100% projection of 681 to 1007.7 from 931.3 at 1258. Considering that weekly MACD is staying below signal line, consolidation from 1227.5 is expected to extend further, either in form of sideway consolidation or a deeper pull back to 1026.9/1072 support zone, or even further to retest 1000 psychological level. But after all, downside should be contained well above 931.3 support and bring up trend resumption to another high above 1227.5.
SILVER
At this point, silver is still limited below mentioned 18.925 resistance and sideway consolidations could still continue. But after all, with 18.055 support intact, rise from 16.675 is still expected to continue. Break of 18.925 will bring rally resumption towards 19.05 high next. On the downside, though, break of 18.055 support will indicate that rise from 16.765 has possibly completed and will flip intraday bias back to the downside for retesting this support first.
In the bigger picture, medium term rise from 12.435 could still be in progress and another high above 19.50 cannot be ruled out. However, note that whole medium term rise from 8.4 is is treated as part of the long term, wide range, consolidation pattern that started at 21.44 back in Mar 08. Hence, even in case of another rise, upside is expected to be limited inside 19.55/21.44 resistance zone and bring another medium term fall. So, we'll continue to look for reversal signal on next rise. On the downside, break of 16.765 support will revive the case that silver has topped out in medium term and will bring deeper decline towards lower medium term trend line at 14 level.
