Acting Man Pater Tenebrarum: The biggest positive is in our view the false break highlighted above. Selling thousands of contracts in the off hours has this time not been enough to actually break support. When a market isnt going down when it should, it often goes up instead. This is an excellent example for this rule. However, bullish traders require some follow-through buying at this juncture to produce a decisive trend change. There is strong lateral resistance in the 1340-1350 area, and it needs to be overcome to pronounce the trend truly changed... Yesterday the HUI gapped up above its 20-day moving average. We have become a bit wary of such gaps, but want to point out that the action so far looks quite similar to what happened in early July. Even todays pullback is reminiscent of the action following the gap up in July. Whether the similarities will continue we cannot say, but we do like the fact that the index has done what it was expected to do in view of the wedge-like decline that preceded the recent rally... As before, we cannot yet say whether a trend change is definitely in the bag. However, considering how absolutely dismal sentiment on gold is, considering the many similarities to the 2008 retest that could be observed recently (back then, gold was also declared dead by the mainstream) and given the fact that for a change, the gold market has not acted in the way that was widely expected, it continues to make sense to look for more signs of a trend change to emerge. Ideally declines should continue to be kept in check by support at $1275, while any rally that manages to exceed the $1350 level on a closing basis and confirmed by the gold stock indexes can probably be interpreted as a sign that the short to medium term trend has finally reversed for good. #gold #stocks #HUI #GOFO #PaterTenebrarum #ActingMan
Posted on: Sat, 19 Oct 2013 00:26:34 +0000
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