aktony ...re: support
There were 4/5 key trading days last year that were signifcant in the HUI, but only 1 really stood out as real support imho.
We had a massive HUI run from the 60's in Jan to the intra-day high of HUI 154.99 on June 4th.
That was where the High Reward - Low Risk; Big & Easy Money was made in this Gold cycle.
For those "buy & holders" here... go back and see what happend & how fast it happend...once we peaked at 154.99 on June 4th.
How about 7 week 62 point HUI collapse to the intraday low of HUI 92.82 on July 26th ?
Where I like to peg "real" support is where I see realworld blood, capitulation and carnage on the tape... where I see "massive" high volume intra-day turns...directly into the face of carnage....not rally lift off points; but huge reversal points.
I remember watching that; the most significant shakeout in this cycle back last July... when we saw an intraday high of HUI 129 on Monday July 22 and cratered to a low of HUI 92 by that friday... a brutal 37 points lost on the HUI in 5 days.
Buyers stepped in large on that friday - plugging the HUI dike at 92-94. Monday the HUI saw support established and the HUI turned on a dime at HUI 94 to close the next day on tuesday July 30th at HUI 109.24.
A "war" was fought at HUI 95ish.... large volume stepped in on the buy side there and the index turned +16% in 24 hours - ending a 37 point/5 day carnage.
...that my friends; is S-U-P-P-O-R-T ...and you don't be needing any fibbanocci's, or any other technicals to recognize it (vbg)...you only had to be there and have watched the war on the tape.
Here is where I think people are making huge mistakes in Technical Analysis on identifying support on the HUI charts.
Aug 1 had an intra-day low of 102.64 and rallied 10%+ to close the next day on Aug 2 at HUI 113.
Aug 6th showed an intra-day low of HUI 107 and rallied 10%+ to close the next day on Aug 7th at HUI 116.84 another near 10% turn.
Aug 7th had an intraday low of 112.92 and tunred & ran 10% to close the next day on Aug 8th at HUI 123.
Chartwise; a lot of people are going to see these bounces at HUI 102, 107 and 112... and see a support trendline building....which saw a rally run thru HUI 129 and finally broken with that prior 112 low violated with Oct 8ths close of HUI 110....and finally bottoming at an intra-day low of HUI 102.99 on Oct 10th - where it turned and popped 10% to HUI 112.68 the next day on Oct 11th.
Charters will peg those turns at 102, 107, 112 and then again at 102.99 as key support.
I don't.
I don't, because those were "turns" that resulted in nice 10% rallies; but they were NOT turns that ended major indice collapses such as the Friday July 26-Monday July 29 bottom support that HUI 92-94 did... ending a 37 point, 5 day sector collapse that then turned and ran back up to HUI 138 in a straight line.
War was fought and SUPPORT was created at HUI 92-94... blip rallies "turned" at HUI 102, 107, 112 and again at 102.
Buyers may step in sub 105ish imho...but key Carnage-Reversal/Support on the coming HUI pullback isn't found untill HUI 92-95ish imho.
Also, mid, or late cycle; I don't think you ever jump in at the prior support level if you took profits anywhere near an interim top... I think you MAKE the stocks come BACK to you & penetrate to that 2nd underlying, shakeout level.... or to where a real blood & guts Tape War was fought...as we had at HUI 92-94.
If we see a mid-cycle profit taking pullback here and I think we will... unless something significant changes fundamentally in the currency markets, or geopolitically; I would NOT be re-adding untill that HUI 92-105ish level.
PS: anyone in the media who mentions the XAU chart here based on any historic Gold cycle comparisons - needs to be e-bitch slapped.... as the XAU is now IRRELEVANT... it's been polluted with hedgers and copper plays.... use the HUI - lose the XAU.
PS S
jimsoi;
CIBC seems to think the recent move in Gold and the cooresponding potential pullback to near $300 is "all about War in Iraq"....(yes the intial move thru $300 was due to reduced hedging, economic drivers etc... but, not the last leg of this rally in POG,or Gold Stocks).
cbc.ca
...it's now past my bedtime and I've used my quarterly allotment of ink.
Good night |
