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Gold/Mining/Energy : Gold Price Monitor

GDXJ 106.70

-0.3%

Dec 5 4:00 PM EST

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To: Zardoz who wrote (23479)	11/27/1998 11:20:00 AM
From: Little Joe	Read Replies (1) of 116796

Hutch: I have reviewed your chart. I have likewise been following what you refer to as a pennant, but which I would refer to as a triangle. (To be a pennant it would have to appear after a sharp near vertical upmove) this is important because pennants are almost always continuation moves. Triangles on the other hand can be continuation moves or reversal moves. The breakout from the triangle is inconclusive because as Magee points out in his books breakouts that occur near the apex of the triangle are unreliable regardless of the direction ot the breakout. I was interested in your observations regarding the cup and handle formation. In my view the formation is too short to be of predictive value, but I am unaware of any theory that relates to the neckline of these formations. I would be interested if you know of any writings on this point. Your observations on MACD are interesting, but I just do not think the divergence you refer to is significant. I think you are wrong about the H&S. The formation is quirky, but it is there. It is also difficult to decide where the left shoulder begins. However viewed on a weekly chart it is more evident. Also, as I pointed out in my post. The formation is not confirmed until there is a breakout to the upside on high volume. Absent this, all we have is a possibility. Your observations regarding the currencies are interesting, but I am not sure whether this technique has been established to have predictive value. At any rate, I did not mean to imply by my previous post that I think the next move is up. I will let the charts make that decision for me. While I certainly do believe that those who buy gold here will do well in the long term. The short term is "iffy". Live long and prosper, Little joe

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