From Dan's Blog on gold, ... traderdannorcini.blogspot.com
A quick look at the mining shares as evidenced by the HUI - Bulls, powered by Yellen's comments from last week (which feeds Dollar weakness and lower rates) and continued nervousness over events in Iraq, have pushed the miners further away from that 200 level. There does not seem to be too much in the way of overhead resistance on the chart to this move until one nears 244-245, with heavier resistance coming in near round number 250. The mining shares continue to lead the metal higher, which is exactly what one wants to see when gold prices are moving up. Say what one wants to about those mining shares, they still, lead the gold price, whether it is up or it is down.
It should be pointed out that GDXJ chart, has shown a bit more hesitation than its cousin listed above over the last couple of trading sessions. Both indices registered strong gaps higher last Thursday but the junior's index actually has lagged the larger-cap HUI since then. The juniors are obviously more of an indication of risk sentiments towards the overall sector so bulls will want to see the latter index outrunning the HUI. Let's watch the gaps on BOTH of these charts.
Gold meanwhile continues to flirt with $1320 and while it has not been able to push convincingly past this level, it is also not retreating very much either. Some light profit taking by longs is occurring, as well as some shorting from some bigger players, but buyers are also stepping up as the price sets back. Dip buying is something that one wants to see if sentiment has indeed shifted from one of selling rallies to one of buying dips. We'll see how things go the remainde of this week.
Referring back to that Saturday post I put up detailing the very large spec long side exposure to crude oil, I am keeping a close eye on its price action. It has not yet been able to penetrate resistance near $107.50 but looks like it has stalled out here for the time being.
I am not yet picking up any negative divergence signals but given the massive long positions in this market, it may not generate one before undergoing a downside correction in price. So much hinges on geopolitical developments and as we have said many times here, such things are very fickle and quite fluid by nature and as such, markets can react violently to changes, or even perceived changes, with little to no warning whatsoever. Sentiment towards this market is very lopsidedly bullish but the trend is still strong. It could very well be a market that is just resting before kicking off another pop higher. I do not know but am watching it very, very closely. |
