| | | I see similar reversals in gold the stocks indexes.
Simply said, yesterday (thursday) we had basic reversal days in the XAU, GDX and GDXJ. The HUI didn't make it on the high by a few notches but still closed lower on the day. This was a first bearish signal, but usually one that need confirmation.
Today, we have long bearish bars in all 4 XAU, HUI, GDX, GDXJ. The indexes either mover above or very near yesterday's highs, and close below or very near yesterdays close. All negative on the days. As you mentioned gold reversed as well (but keep in mind that gold was not particularly strong in the last two previous days closing nicely down form the highs.).
This behavior signals danger. But, again, the signals need confirmation.
Another pattern that has been suggesting a sell-off into end if August possibly end of September is the presence of a 4-month cycle that is in the bearish phase of the bullish trend.
That being said, there are other forces in play, for instance the seasonals.
321gold.com
September is most of the time a very strong month. But not always.
August is more often up, but occasionally, it goes up in the first few weeks of the months and then down into the first week of September. Last year gold lost 6% in that period. It also happened in a few years over the last 16 years.
The reversals in stocks and gold may not be confirmed. The fact that they could, spells danger. If you look at some individual stocks that have been strong, you will find out that the bearish signal can be stronger.
We will find out in the weeks ahead.
All this to say that I am bullish long term, but cautious short term.
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