To: freelyhovering who wrote (71698 ) 9/12/2011 10:39:07 AM From: bull_dozer Read Replies (1) | Respond to May be...Gold continues to look as though it is marking out an intermediate top area, with several additional bearish developments having manifested over the past week. One is the powerful breakout in the dollar, which was predicted on the site in the article The Great Dollar Shocker just days before it occurred. Could the dollar and gold rise at the same? yes, they could, especially if the dollar's gain is largely due to the demise of the euro, but a strong dollar does mean that gold will be battling headwinds. The other negative development was the appearance of a strongly bearish "gravestone doji" candlestick on the gold chart last Tuesday, visible on the year-to-date chart below, shortly after it made a new high intraday, on huge volume - the second highest for years. More generally the continuing heavy volume in gold and extreme "skitzo" volatility with big daily moves in both directions is viewed as a sign of an overheated market close to burnout. We can see all this on the year-to-date chart below, and also how gold has hit a trendline target, and is heavily overbought relative to its moving averages, having opened up very large gaps with them, and is still heavily overbought on its MACD indicator, although this has eased somewhat over the past couple of weeks. Earlier it had looked like a small Head-and-Shoulders top was completing in gold, but this now appears to have morphed into a small Double Top and it is clear that the resistance in the $1900 - $1930 area is a key level for gold. Volume is bearish as it remains at a high level with big volume on down days. clivemaund.com
