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Strategies & Market Trends : VOLTAIRE'S PORCH-MODERATED -- Ignore unavailable to you. Want to Upgrade?

To: Jim Willie CB who wrote (50620)	4/26/2002 5:42:47 PM
From: stockman_scott	Respond to of 65232

Here are John Murphy's latest thoughts on gold....(sorry no charts)... GOLD HITS TWO-YEAR HIGH... Gold prices bottomed just over a year ago near $260 -- and have been rising pretty steadily since then. This week, gold prices touched the highest level in two years. The first chart shows that the next upside target is in the $320-325 zone. The monthly chart puts the gold action into better perspective. First of all, it shows that the low of last year was actually a retest of the previous low formed during 1999 -- setting up a potential "double bottom" reversal pattern. It also shows the next upside resistance barrier near $325 formed by the late-1999 peak. That looks like the next upside target. To actually "complete" a major bullish breakout, however, gold would have to exceed the $325 level. In other words, the major bull market in gold could be just starting -- and may have a long ways to go. There are usually two ingredients that support a rising gold price -- falling stock prices and a weak dollar. We all know stocks have been dropping. How about the dollar? DOLLAR DROPPING FAST... The first chart shows the dollar falling under its 200-day moving average this week -- and dropping to the lowest level this year. That's certainly helping gold prices. The second chart is even more ominous for the dollar. Depending on how we read it, the weekly chart could either be a potential "head and shoulders" top (with 3 peaks) or a "double top" which would include only the last two peaks. In either case, it's potentially bearish. We've drawn a rising trendline under the lows of the past year (which sits near 114). A decisive break of that line would, in our opinion, be even more bearish for the dollar -- and even more bullish for gold -- since they usually trend in opposite directions. GOLD STOCKS LEAD BULLION... Another factor supporting higher bullion prices is the rising Gold (XAU) Index. That's because gold stocks have a history of turning up before gold. The first chart shows the XAU Index breaking through its highs of last April earlier this year to initiate a new uptrend. The XAU is now trading at the highest level in more than two years. The green relative strength line along the bottom shows that gold stocks have been outperforming the S&P 500 for the last year and a half. Some may be wondering if it's too late to commit some funds to the gold sector. We don't think so. Chart 6 shows why. The Gold Index is in the very early stages of an apparent new uptrend. The six-year bear market (red) trendline was broken this January. The XAU has to climb 25% just to reach its next upside target near 95. We think there's a strong chance that next target will be reached -- and eventually exceeded. We've said it before -- and we'll say it again. We believe everyone should own some gold stocks -- either individually or through a gold mutual fund. GOLD STOCKS AS A STOCK MARKET HEDGE... One of the hallmarks of gold (and gold stocks) is their tendency to move inversely to stocks. Gold has been in a twenty year bear market. At the same time, stocks have been in a twenty year bull market. If stocks have completed an important top that won't be reached or exceeded for several years (which we believe is the case), the bullish argument for gold (and gold stocks) gets even stronger. And since gold shares rise faster than the price of bullion (which they've been doing), gold shares are a better way to play a gold rally than bullion itself. The last two charts show the Gold Index and the S&P 500 trending in opposite directions for several years. The XAU Index broke its bear market trendline around the same time the S&P 500 broke its bull market trendline -- that is, at the start of 2001. At the moment, the XAU is trading over its rising 40-week moving average, which is our definition of a bull market. The S&P 500 is trading under its falling 40-week average, which is our definition of a bear market. We prefer the bull market in gold shares to the bear market in stocks.

To: Jim Willie CB who wrote (50620)	4/27/2002 7:30:44 AM
From: Clappy	Read Replies (2) \| Respond to of 65232

JimmyJaqass ominous 3-yr USdollar chart, topped & rolling over It certainly is falling hard and could very well be the early warning sign of the doom you've been screaming about. Big Al can rev the printing presses to save the markets. M3 has been on decline since March. So has this market... If the Fed can't pump then it finally will get to seek it's natural level... The one thing that keeps effin' with my brain is the positive gold and PM articles and posts that are flying about. It's almost becoming a mania among message boarders. Will it make it's way out into the public. Will I soon hear landscapers and deli owners telling me about the gold stocks and bullion they've been buying? Or are we approaching a temporary buying climax. Is my mailbox going to be filled with those trashy "Get Rich with Gold Stocks" infomercial periodicals like I used to get during the internet bubble? $XAU and $HUI have been blowing up past every oversold indicator I can think of. Even the candle sticks were telling me it was done on Thurs but Friday they were negated. My morning news radio station has even started telling me what the price of gold is, now. Anyhow, the market can certainly use a good wash out. It's clearly ignoring all the good data coming out. Chips sector looking like a possible rebound... GDP numbers showing growth... etc... With out the Fed's printing presses going full bore, it seems that the market will finally seek out it's own level. I just wish I could figure out where that might be. As negative as I feel about the market right now, the VIX, $BPCOMPQ, $CPC and other indicators does not reflect my same outlook... May take some more bloodletting... -JohnnyJackass