George S. Cole,
I must disagree George, after all, we are possibly talking about the indicator the thread named the George S Cole, where the underlying commodity (gold) performs poorly while the index of those commodity stocks does well (XAU), or at least flat.
Flat is my addition, as I think flat is acceptable off of what may be a major bear market bottom for the XAU.
What the XAU is doing here is just the right thing, so far.
It is forming a right shoulder (probably inner), it has bounced off of its first try against resistance after taking out two lines of it. But MORE importantly, it is challenging a couple of major resistance lines, the 200 DMA being one at around 200.
MOST important is the downtrend line formed from the Sept 99 spike through this week, which has contained all XAU rallies till now. To break this major resistance, the XAU only has to close this week above 51, next week above 50 and the pinch point will be the following week above 49.
A weekly close above that line would indicate a likely XAU bull. A weekly close under 45 may negate.
BTW, I just noticed a new fractal pattern in the OSX weekly. It will be a good one if we close the week under 113 but above 106. If we have two weeks (less likely, three) down from there and then a reversal, the OSX could run up to old highs (140 range).
This could occur in response to a general market reversal or an extraneous event.
Best Regards,
Roebear |
