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Strategies & Market Trends : Stock Attack II - A Complete Analysis
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To: Paul Shread who wrote (33673)4/3/2002 12:54:51 PM
From: Rarebird  Read Replies (3) of 52237
 
Spot future Gold had a couple closes this week above its closing high for 2002 of $US 303.50 on February 8. When Gold last spiked right after 9/11, it subsequently gave all its gains back and returned to its uptrend line. During the last pullback, Gold found support at $290 and did NOT give all its gains back(only half).

There is no question that there is heavy resistance at $308-$310 on the June contract. That may have played a factor in the sell off in many gold minining stocks yesterday. But what is more important here is for Gold to consolidate and form a base above $300 so it can surmount that resistance.

It is actually very easy to determine short term and intermediate term tops in the Gold Market and you don't need a chart for that. The stocks lead the metal in a gold bull market. That is an axiom. Yesterdays action where the mining stocks fell as the POG rose $2.80 was a signal that the current rally was over for the short term. Since 1997, gold has not been able to hold above $300 an ounce very long. Before Traders will bid up the stocks here, they will need to gain some confidence that "this time is indeed different", that Gold can form a solid base and hold above $300 an ounce.

My opinion is that the odds are quite high that a solid base will be formed here. But that is the subject of another post.
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