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

To: Jim Willie CB who wrote (50865)	5/2/2002 4:57:03 PM
From: stockman_scott	Respond to of 65232

The Speculator: Why the trend is not your friend moneycentral.msn.com

To: Jim Willie CB who wrote (50865)	5/3/2002 6:45:26 AM
From: Clappy	Respond to of 65232

Silvery Moon, I found this TA on gold and silver. I don't know what the dude's track record is, though. Might be as bad as mine... Anyhow: 321gold.com Crossing currents Clif Droke May 1, 2002 Gold and silver have reached temporary topping points and currently reflect the weakness of the falling short-term cycle in precious metals as the Dow and NASDAQ are poised to begin a 2-3 week bear market rally in May that could see the Dow as high as 8-10% off its April lows and the NASDAQ as much as 15% off its recent lows. The dominant short-term cycle in stocks has bottomed while the gold market cycle has peaked. Both cycles have traded at inverse correlation to each other this year as the crossing currents across the financial markets gradually come back into synch. U.S. Dollar Index futures currently trade around $115 and are showing considerable short-term weakness in inverse relation to gold's latest strength. A close below $114.50 means that the dollar has declined below two consecutive 40-week cycle bottoms and is therefore officially in a downward trend. On the charts this would also equate to the breaking of a long-term upward trend along the 40-week and 120-week cycle bottom lows and would open up the downside potential to the next lowest 40-week low between $105-$107. As we mentioned in a recent editorial, the dollar will experience a mighty fall later this year along with the equities market. Someone recently asked our take on the silver market and why we haven't been giving any coverage to it lately. The reason for this omission is that the white metal doesn't deserve any attention right now since it is weak relative to gold and has a lot more overhead supply to absorb than gold. Silver has been stuck in a trading range all year and doesn't look like it will be coming out any time soon. Once silver breaks decisively above $4.75 benchmark resistance we'll start paying attention but not until then. From the looks of silver's configuration of dominant short-term cycles, this won't be happening anytime soon. Currently, silver is being pressured by a 20-week parabolic dome which ends in May. For the next couple of weeks, however, silver will be hard pressed to mount a sustained rally and will be under strong selling pressure as the cycles come down hard over the next several days. It would not be surprising to see a test of $4.50 and possibly a double-bottom test of the April lows at $4.40. However, silver posted a definite bottom above $4 last fall and will definitely join with gold this summer as both metals commence the next leg up in their developing bull markets. Leading indicator silver stocks Pan American Silver (PAAS) and Silver Standard Resources (SSRI) are reflecting the short-term weakness in silver and have and will face selling pressure over the next several days as silver's latest short-term cycle enters the "hard-down" declining phase. The silver stocks have a great amount of overhead supply to contend with this spring and it could take until summer before it is all sufficiently absorbed. This is one reason why we favor gold stocks to silver stocks right now since most golds are in a far better technical position to the silvers and have less supply issues to contend with and better upside momentum. We advise avoiding the silver stocks right now. Most of your stock portfolio should be concentrated in gold stocks. (Editor's note: Well ok, that's silver out of the way. Clif doesn't beat around the bush, does he?) Among this year's prime gold stocks are Freeport McMoRan Copper & Gold (FCX), which should end up outperforming the general gold stock market. Other outstanding gold stock candidates are Durban Deep (DROOY), Placer Dome (PDG, once it overcomes its final layer of supply below $13.50), High River Gold (HRG), Meridian (MNG), and ASA Ltd. (ASA). The XAU index has near-term topped near the $77 level and should be turning down over the next day or two. A test of $74 is likely followed by a test of the nearby $70-$72 chart support is possible this week. This forecast is based on the converging cycle channels that all peaked on Monday and will be exerting force against prices into early May. Again, the 2-3 week trend in gold will be largely counter to that of the stock market which will rally in the first part of the month on the strength of the dominant short-term cycle. The Handy & Harman Cash Gold index is intermediate-term strong and projects a high later this spring to above $320. A parallel trend channel which was first predicated off the lows below $280 last October has served to contain the price trend ever since and is still fully intact. Cash gold is undeniably in an overall upward trend well into summer. Clif Droke May 1, 2002 ===== -GoldieHawnsSmile