...well the price of Pom-Pom's has fallen over the last 24 hours (vbg).
Confirmation, confirmation, confirmation...
Earlier in this move when many, if not most; were still very doubting of bottom being formed into late April and early May, as well as the inevitable "V-Bottom" Rally for the HUI - I talked about the importance of the HUI then "confirming" with 3 consecutive closing prints above HUI 178.63
It did and we promptly ran to 205.
... giving some of us the spoils of a +40 point Index move that occured in just 20 trading days.
I'll repeat my earlier comments that the HUI like most sectors, moves in broad 40-60 +/- point legs that occur over weeks and months... not days, or hours.
Dancing in and out as the tape turns from red, to green and back and forth 27 times in 34 days and leapfrogging over each other to see who can make the biggest, or timeliest bottom & top calls - that also changed 27 times in 34 days... is NOT how any successful Hedge Fund, Mutual Fund, or Institutional Manager trades... let alone any successful Individual Trader.
After that "V-Bottom" Rally up off of the bottom (that so many of our self-agrandizing Pom-Pom's Wavers nay-say'd), the HUI move hit a 7 week Wall of Resistance and traded in a very narrow 11 point trading band and the rally was unable to penetrate overhead resistance - signaling a prudent time to cash in profits... "if" one really had any (vbg).
Presently we once again find the Goldstocks needing to "confirm" any further sustainability and extension of this move - by taking out the HUI 207ish level with 3 consecutive closing prints above that level.
Nothing has changed vis a vis... "confirmation" being needed to endorse both "sustainability" and "further continuation.
But, in this environment, RISK potential has escalated and REWARD potential has contracted....a concept seemingly lost on many individuals who seem to want to leapfrog atop one another to see who can be the most "in" at the TOP...instead of at the BOTTOMS - when RISK:REWARD and HUI:GOLD Metric's are exponentially more favorable and profitable.
Occassionaly we get "Triple Confirmation" inflection points like the one we now have, where a HUI confirmation can simultaneously take out the Prior High of the current move, the 200 dma and the upper resistance trendline.
Presently, the HUI is sitting right on the "pivot point" for such a confirmation.
However - confirmations, even rare "triple's"...are NOT guarantee's that moves will continue... they are merely technical indications that the odds have changed in the favor of continuation.
Positive TA aside, one can not ignore the fact that "market forces" (especially important in the Gold Sector) are not static and thus TA should only be a "part" of an overall trading strategy.
We are in an Economic & Political Environment - where the recent explosive moves in commodity's other than Gold - will need be explained away as a "positive" endorsement of a robust economy and cooresponding strong demand for Industrial Commodity's, which are a sign of Economic Growth yada, yada, yada...
The message that Gold rising to new highs transmits to the Markets - is now, more than ever.... NOT the message "market forces" want transmitted.
Given, that the Commercials have recently been closing out their short positions.... we should anticipate the cooresponding re-arming to potentially be re-deployed on Gold at these levels.
Either the International Currency Players step in here and make a major statment endorsing Gold as a THE Safe Haven "Currency" - or the Commercials will pound POG once again....and when that happens you will see nothing but abandoned Pom-Pom's and innumerable posts after the fact.... "that they were glad they took profits prior to this rollover"...yada, yada, yada (vbg).
REALITY, a state of mind seemingly escaping many Pom-Pom wavers here... indicates that we are less than +2% from where we've literally traded for 2 out of every 3 days for the last 7 weeks !?!?!?!?
Again I ask ?
- just what are they celebrating ?!?!?!
In case I have not made my point clear:
PUT YOUR POM POM's AWAY....and check back into REALITY.
IF... and that's a pretty big "if" across SI for goldbugs... "if" you got this bottom and have already put those 40 points in the Cash Register - CONGRATS... you traded like a Pro.
If you broke out your Poodle Skirt and Saddle Shoes and starting doing Cart Wheel's and Waving Pom-Pom's ...again, please do a reality check... we're + 2% of where we've been trading virtually every day for the last 7 weeks (22 out of the last 34 days !?!?!) ?
Just WHAT are you celebrating ?
We need a strong reversal into the close people...
Slider`
PS: NEM can't hold it's 200 dma... whodathunkit ?
As wrong as it is.... non-speciality Fund Mgrs still hold onto the view that as "NEM goes - so the goldsector goes"...
NEM is a laggard, not a leader....but, nonetheless - because it is still the INSTITUTIONAL vehicle of choice... it must confirm any extension, or continuation of this move.
No reason for any individual goldbug to own NEM imho - as it is and will continue to be nothing but a laggard; but it is still a primary INDICATOR for the reasons stated above... |
