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Strategies & Market Trends : Strictly: Drilling II
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To: Frank Pembleton who started this subject1/12/2002 1:20:31 AM
From: gold$10k  Read Replies (2) of 36161
 
XAU - the big picture

Check out this monthly 10 year chart of XAU.

bigcharts.marketwatch.com

Notice that the Bollinger bands are now the narrowest that they've been since the start of 1993 and even narrower than they were then. Although the monthly chart in the 1st half of 1993 appears to move continuously upward, changing the frequency to weekly reveals that there were some weeks of rise followed by some weeks of consolidation. My point is that even a seemingly straight-up move like 1993 has its 2 steps forward, 1 step back aspect. And although it's true that gold mining stocks are the most under-owned of all which makes for a huge number of potential buyers, and although the sector market cap is very small so that there will be a greater price acceleration per dollar invested, it's also true that the process of taking profits, consolidation, and re-buying of the same stocks by those who took profits adds to the continued impetus for the prices to rise. I've heard talk about how the coming move (whenever it is) will be so swift that it will allow no entry points once the train leaves the station, but the weekly chart of XAU in 1993 indicates otherwise.

I wasn't paying attention in 1993, so this is my attempt to create a roadmap or scenario of what might be straight ahead now so that I can do a better job of understanding and dealing with it. Comments are welcome.

vt
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