Week 28: Market Update & Gold trading journal

Disclaimer: All information shared is solely for learning purpose and it does not constitute to a buy/sell call.

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Market updates 5th Jul 2020:

Overview: Markets remain caught between the positive sentiment stemming from the data optimism and the caution still transpiring on the back of rising Covid-19 case. Looking ahead, a relatively quiet week lies ahead after the series of Chinese PMIs and US jobs report release, but the data watch continues as the market await fresh impetus.

 

  1. Covid-19 infection growth remains the single biggest dampener for market sentiment as investors continue to ponder the chance of a V-shaped recovery. This week reports suggesting record daily cases for US states such as Florida occupied headlines while Australia and Japan had also noted fresh hotspots for Covid-19 spread. The watch continues with expectations that this rise may not be quelled so quickly moving into July.
  2. Reopening efforts meanwhile remain underway with UK expected to reopen pubs from Saturday, July 4, along other non-essential services such as restaurants, hotels, cinemas that were previously shut. PM Boris Johnson nevertheless warned of potential return of restriction should the pandemic runs out of control again. UK market one to watch, though the broader Covid-19 conditions suggesting caution could be retained.
  3. US data to track in the coming week will be few and far between though watching the ISM non-manufacturing on Monday with the return of the US market from the long weekend. High frequency jobless claims due Thursday will also be key for the US market to watch following tightened restrictions in certain states into end June.
  4. China’s June inflation reading will be due Thursday, expecting the factory gate deflation conditions to continue. CPI is expected to stay little changed at 2.5%. Q2 GDP, retail sales and industrial production will be ones to note in the following week.
  5. Australia’s RBA meeting decision will be due Tuesday, July 7, with no change expected for monetary policy seeing the limit here for interest rates without any intention by the central bank to head into negative territory. AUD/USD largely trading to the tune of the macro picture.
  6. Bank Negara Malaysia is expected to cut overnight policy rate by 25 basis points to 1.75% in their Tuesday, July 7, meeting to further shore up support for the Malaysia economy amid the dire economic outlook. This could be the last seen in a long while but would join the other EM Asia central banks to continue providing support in Q3.
  7. Advance Q2 GDP for Singapore is expected in the coming week with extensive decline expected according to Bloomberg consensus at -10.0%. This will be a first look for Asia economies, one for Asia markets to track. Singapore Press Holdings will also be releasing quarterly earnings on Wednesday, July 8, one for the local bourse.

Source: external

 

Gold trading plan:

 

Weekly Chart:

Gold have been bullish for 2 weeks (refer to earlier posts) and the upward trend is currently still intact.

As the risk to reward is now not as good as 2 weeks ago, I would now be more cautious and not be adding new positions unless there is a pull back. It is also important to monitor the price action closely in case the trend is broken.

(key weekly support level to look out for: 1,758 range).

Note: MACD, RSI are still trending up

 

Daily chart:

When we zoom into daily chart, the trend is clearer with the support and resistance level as indicated in the below chart.

Similar to weekly chart, MACD and RSI are still positive.

Support levels would be 1,730 -1,758 range. However, i would still be more bullish biased as of now.

 

4 hours Chart:

In the 4 hours chart, the bullish momentum is kind of weak due to independence day early closure of market. As it is a long weekend, volume and price action movements would generally be lower. It would be important to monitor how the chart moves on Monday morning.

 

 

As no trading/investments are guarantee sure win, please do your own due diligence and always look at risk to reward and trade with guaranteed stop loss.

Note: Due to the bullishness of Gold, we are also seeing gold mining companies moving up.

One of the stock spotted by Investwhizz member’s personal screener is CNMC Goldmine (5TP) where a “dark horse” bullish pattern is seen. Please DYODD.
(Investwhizz has sizable position in CNMC hence is biased to the upside)

 

Do PM me if you would like to understand how I trade with guaranteed stop loss.

 

Regards,

Ernest Koh