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Gold/Mining/Energy : Precious and Base Metal Investing -- Ignore unavailable to you. Want to Upgrade?

To: crustyoldprospector who wrote (17411)	8/20/2003 9:10:23 PM
From: Little Joe	Read Replies (4) \| Respond to of 39344

CHART UPDATE A few days ago I posted that I thought that we were in for a short correction of a few weeks, due to the over bought condition of the market as well as the strong seasonal tendency for the market to break in late August. I am no longer sure we are going to see that seasonal break and given the strong tendency of gold to follow its seasonal pattern, if we do not see the break, I think the implications are very bullish. In reviewing my charts tonight I noted the following: CRB – Look at the attached chart which clearly indicates that this this important index of inflation just broke out of a consolidation area today and cleared its July and August highs. stockcharts.com[m,a]dahlyyay[pb50!b200][vc60][iUb14!La12,26,9]&pref=G Dollar The dollar appeared to have broken out to the upside recently but I think yesterday’s hammer candlestick makes the breakout suspect. stockcharts.com Lets look at a few charts of some of the important gold stocks to see what is happening. Newmont As the following chart shows, Newmont has broken to the upside from a short tight flag formation. This is the second formation in this move. I think we can treat two formations this close together as one and assume this is the midpoint of the current move. Hard to project this kind of a formation, but I think it will be a short term move to 46. stockcharts.com[m,a]dahlyyay[dd][pb50!b200][vc60][iUb14!La12,26,9]&pref=G Glamis is similar to Newmont but I can only see a move to the 16 or 17 area here. stockcharts.com[m,a]dahlyyay[dd][pb50!b200][vc60][iUb14!La12,26,9]&pref=G Goldcorp Gold Corp has almost cleared the resistance that formed between Dec and Feb and I think the breakout is imminent . I intend to buy calls on this one if it does break out on good volume. Also, this will portend well for the market, it should run a good way after the breakout and I don’t see other gold stocks reversing when this bell weather is moving. stockcharts.com[m,a]dahlyyay[dd][pb50!b200][vc60][iUb14!La12,26,9]&pref=G Talk about breakouts look at this chart of ABX. It broke out today on heavy volume and certainly this will help to underpin the bulls in the gold stocks. Like Gold Corp if ABX is moving up, I don’t think the rest of the gold stocks are going down. stockcharts.com[m,a]dahlyyay[dd][pb50!b200][vc60][iUb14!La12,26,9]&pref=G Anglogold is another bell weather gold near a breakout point. stockcharts.com[m,a]dahlyyay[dd][pb50!b200][vc60][iUb14!La12,26,9]&pref=G Placer Dome is another bell weather which is in a well established trend. Until the uptrend line is broken we are on track for higher price. stockcharts.com[m,a]dahlyyay[dd][pb50!b200][vc60][iUb14!La12,26,9]&pref=G Gold it appears to me that gold has broken out of the symmetrical triangle. I can’t draw trend lines on the chart but I think you can see that the downtrend along the February highs and the May highs has been broken. stockcharts.com[m,a]dahlyyay[dd][pb50!b200][vc60][iUb14!La12,26,9]&pref=G I saved the best for last, and that is the long term (weekly) chart of the HUI. Unfortunately I can’t show you the chart that I analyzed, but if you can get a longer term chart of the HUI, you will see what I mean. HUI has formed an up slanting (the most bullish kind) tremendous inverted head & shoulder bottom. The chart that I am using shows a Left shoulder which completed at 100 in late 1999, the head was formed at about 35 in late 2000 the beginning of the right shoulder began in mid 2002 at 155. It is currently on the verge of breakout. READ THIS IF YOU READ NOTHING ELSE. The breakout projects to a long term target of 269. I calculate the midpoint of the trend line between shoulders to be 115 subtract from that 36 which is the bottom of the inverted and shoulders formation and you get 79. The approximate breakout area is 190 to which is added the 79 and you get A TARGET OF 269. The chart below which is a weekly chart that starts in October of 01 and shows the bottom of the head. The rest of the chart shows only the right side of the formation. In other words the formation is so big you can’t see it on a chart that goes back to 2001. stockcharts.com[m,a]wahlyyay[df][pb50!b200][vc60][iUb14!La12,26,9]&pref=G To summarize, the short term is bullish in my view because the bell weather gold stocks have either broken out, are in established up trends and today gave strong evidence of a continuation of those trends or are on the verge of breakouts. Gold itself has broken out of its symmetrical triangle, ALTHOUGH SOME GOOD FOLLOW THROUGH IS REQUIRED because the breakout is “iffy”. (Normally, I like to see a 3% penetration of the trend line). Added to the above is the upside short term breakout of the CRB today and the possibility that the short term dollar breakout has failed.. What could change this view. Probably, the most likely scenario, would be a failure of gold to follow up on its breakout and/or that my interpretation that the dollar breakout was a false breakout is wrong. Other than that I would need to see strong and convincing downside moves and/or some topping formations before I will be worried. I will ride this pony till then. My analysis of the Long Term condition of the market just confirms my long held position that a huge major bottom in gold has occurred, I have previously posted on this and the HUI analysis is just a further confirmation. Of course the breakout of the neckline has not occurred yet and we will need that to confirm the analysis. If the HUI goes up another 10 points I would think the confidence in the long term analysis in this post will be greatly enhanced. Sorry for such a long post, but I saw a lot in the charts. Little joe

To: crustyoldprospector who wrote (17411)	8/20/2003 9:10:59 PM
From: gold$10k	Read Replies (2) \| Respond to of 39344

Crusty, HUI and XAU are flying and the POG is on the verge of breaking out towards $400+ and you're selling based on (IMO) a low probability future event? There's no indication that things will become extreme and even if they do it could be just as likely that rallying gold will be used as a refuge. Zeev Hed thinks that the downward pressure on the general markets will likely intensify in September, but he is not predicting a "Nassacre" as he has in the past... at least not yet. investorshub.com I think that your concerns are somewhat premature, BWDIK. "I'm an old man and seen many troubles, but most of them never happened" - Mark Twain Best, vt