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Strategies & Market Trends : Strictly: Drilling II
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To: Frank Pembleton who wrote (25212)1/10/2003 1:02:24 PM
From: Little Joe  Read Replies (2) of 36161
 
Frank:

My perspective is somewhat different than his. Here is what I see:

1. Gold is at a very important resistance point. The fifeen year downtrend line is around 355.

2. Both XAU and HUI are at important although more recent resistance.

3. I am amazed that gold and gold stocks have held up so well in the face of such technical resistance, particularly after becoming so overextended.

4. It is beginning to look like the technical excesses could be wrung out of the market without a major price break.

5. It has to soon become apparant to the investing public that the government intends to print its way out of this mess.

6. The commodity research bureau index has now decisvely completed its double bottom implying a price objective of 281 which would take out the next resistance the '96 highs at around 260.

I am convinced that the odds strongly favor a strong upmove through all of the above resistance points when this correction is over and I don't think the correction will amount to much.

My only concern is that the bullish sentiment that I have seen is just too high. This probably needs to be worked off. However one thought I read on another board was that while it may be true that those who follow gold are very bullish. The general market participant is either bearish or unaware and that the sentiment figures could be misleading for that reason. This makes some sense to me because if gold is going to truly explode as some have suggested there needs to be a sea change in the attitude of the general investor.

Any thoughts on my comments?

Little joe
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