After hitting a bit of supply last week our HUI chart appears to have absorbed it...

Tim Wood has entered the picture with talk of a possible green light on gold...
http://www.financialsense.com/Market/daily/friday.htm

gold has been playing catch up to silver

Speaking of GSS.. never thought it would ever arrive to support at 2.50 but the divergences that existed for a long time are obviously showing up now..

Friday did a good job of absorbing the supply of the prior days......

not unlike the other markets that have been under pressure the last two fridays....

That was a strange situation. There were divergences the last buck and a half down to the bottom.

Concentrate....

Gold knows...

"The way I am playing it is by looking for leverage to a falling US dollar exchange rate. The dollar may look strong right now, but it has severe structural problems. In the end I think the dollar is going to suffer… a lot. It is just a matter of time."

Paul Van Eeden
http://www.kitco.com/weekly/paulvaneeden/jun102005.html

90 huh....

From me.

I've believed in the metals for what seems like an eternity and so far with the exception of physical, this sector has been one fake out and disappoint after another.

So, color me as a disbeliever until my account turns northward from the prior years carnage. "Show me".

260 is a loooong ways away.

Well Old Habits I can feel your sentiment... just think... we didn't break 160 anyway...

Feargreed dude..
"The XAU touched our Fibonacci Cluster Support levels, and late Friday exploded up for another 5% plus gain.

We don't believe this is a run-a-way gold market, just yet.
Bearish momentum divergences are now building, and it will take a close at 90.95 on June 15 to neutralize.

A multi-year high in the XAU weekly Call/Put ratio implies a top is in the making.

We see the likelihood of another pullback to the 83-85 levels."
http://www.feargreed.com

now wouldn't that be unusual... a run-a-way gold market

Off to a good start. Gold is down 2.30.

The put call multi year high is very telling huh? Best to watch our asses.

I will be using a stop close under 185 HUI on longs.

GOLD:

Looking good as a trading vehicle for the next few weeks.

The first chart shows the decline off the 22 year high in December. There's no mistaking 5 waves down. As it's the first impulse, it is either wave A or wave 1. There's another impulse due later to complete the correction--wave C, or to lead Gold lower--wave 3.

But that's for later. As an aside, I've drawn a blue horizontal line on the chart to show how $428 is an attractor. I've alse drawn a blue channel to project the likely terminus of red wave C, and the completion of the correction up. Right now, it's at $450 and rising daily.

The second chart shows what's happened since the February 8th lows.

It certainly seems that we've completed waves a and b of the typical 3 wave correction that follows 5 waves down. Very short term, we've had a 12 point rally, and a 3 day pullback creating a bear flag. This could count as waves i and ii of 5 of C. Friday's powerful move may be the start of wave iii. It should correct a bit--possibly to the upper downtrend line at 423 or so. An overlap of 421.13 indicates wave ii is still in play and more complex. Overlap of 427.02 and a close above 428 would be very bullish.

Silver:

I've been bullish on the metal, despite the action of the stocks over the past month.

The main reason was my belief in a symmetrical triangle for Silver off the December highs.

A backtest of the descending upper downtrend line has, very likely. failed.

This portends the possibility of lower prices.

This is shown on chart 1.

Chart 2, Silver's weekly chart shows a potentially larger triangle. I'm not happy with the count as wave a certainly seems like an impulse--not an abc usually required for a triangle.

As the Red and Blue lower uptrend lines indicate, Silver could head lower without breaking its uptrend.

I'm considering hedging my long PAAS position.

PAAS:

This short term count says a pullback to $14.50 should be taken in stride. It wouuld simply be a natural pullback.

Anything much below that will destroy the ultra-short term impulse up.

Gold ask per ounce past 354 at 10.15 pm
It is going for the highest high in 4 years

http://www.munters.be/servlet/javaparser.c...st_or_new&lg=nl

Bear I think if we close under 6.80 in Silver we will see much lower prices as in a retest of 5.40 minimum.

Sorry I haven't posted the last few days as have been busy. New cousins wedding in Bandung amongst other distractions for the new groom.
Continued my strategy of $costaveraging into RecoveryGoldShares. Funds available early in the month (usually dates 5-10) allowed me to buy the pullback. My approach was to buy stocks off my wish list on a 50% pullback from the May 16 low to the late May/early June high. I also unloaded 2 partial positions RANGY and GPXM (near the high). (Not because I didn't like them but because I didn't get a full position originally and now have other fish to fry.)
Anyway this led me to buy CAU, GLE, NAK, OZN, SA and a partial position in BGO which moved me back to 100% invested. I now have 19 issues with a double position in CDE and the partial in BGO. With RANGY and GPXM going back on the WATCH list that leaves 10 still on that list. However, unlikely to be adding too much over the summer due to cash constraints. Still looking to add to position with no plans as yet to sell. If we break to new lows so be it, I will continue buying and maintaining 100% position. All positions are fully paid for, margin borrowing = zero.
Physical gold amounts to 8 to 10% of net worth but this figure will go down as no plans to purchase fizz at the mo.
I did start a new model which works like this. Buying a 10% position / issue on a move to a bullish short-term stance starting on May 1, 2005. First cab off the rank was GPXM in early May and I continued until I had 15 stocks. The last was MNG which was added just before it had the big run up (early June). The model bought at the opening price the day after the switch to bullish.
Meanwhile in reality space, the ThorAss account finally went green on Friday's ramp. So the nearly 25% drubbing in April and May has been recovered. Don't really want to comment on this but just thought I'd menshun it.
Meanwhile the 4 stock model profits leaped up last week on the RIMM decline. The other 3 stocks (VLO, NEM and KLAC) nett hardly contributed at all with NEM contributing some profits but KLAC and VLO getting whipped around a bit.
The Gold share technicals continue their modest improvement.

Second leg up just started

For you TCG
We are 10 euro per kilo below the highest high of the past 5 years

For you TCG
We are 10 euro per kilo below the highest high of the past 5 years

Watching Closely...


Best,

TCG

EGO was telegraphed a mile wide....SA should follow

Bought some SSRI (margin) just over 12, as a trade. Stop under the day's low. We'll see if it'll work out. If not, its a very small loss.

don't you find it refreshing....

gold up...
dollar up....

change of behavior....just waiting for some lasting implications...

Its amazing.

Up almost 2% in the SSRI trade already, in just an hour. Waiting for silver to return to 7.50...

PMS Technicals continue to improve, 4 weeks of improvement now. Bullish Percent has risen from 3% to 63% and Bullish LT from 3% to 24%. Ya gotta like dem apples! (Golden Delicious? )

Got up early today to work on my accounts. Worked out my physical holdings is a little over 8% of total. This is about where I'd like to be for now. Somehow I find having that much fizz comforting. Kinda like an insurance policy. By comparison fiat (by the end of the month) will probably be down to 2%. Debt is presently running at 0%. May at some point in the future run a margin debt position for swing trading but not while holding down a full time job.

Got a golden helmet (with horns)? Got a silver hammer (Maxwell)?

Anyway no Nuwrecks today but I see a lot of the old ones are doing well. Probably not a good time to be buying up Wrecks anyway but the 50% pullback strategy for this month working out well so far. Still no sell strategy. Probably should work on some kind of exit strategy that respects my present LT time horizon.

Charmin's feargreed dude post made me sit up and take notice. I see some negative divergences in the Gold Indices in some indicators I follow. Since I only get one chance per day to sell I thought it prudent to sell against the double top today. I think we might go higher but don't want to assume the risk from here. Out.

Dollar down gold down this evening, its wierd...

Its like gold is now acting as the inverse euro not the inverse dollar.

Gold and Dollar:

Dollar may have topped.

Gold may be breaking out.

Could this mean that Euro-based entities are now a force (or more of a force) in the gold market?

OldMan

Thor:

How do you calculate your Bullish Percent?

Each weekend I calculate $BPHUI -- my calculation--it doesn't exist at Stockcharts.com. I use the same methodology as the other $BP's--simply take the percentage of stocks on P & F buy signals.

Only 2 stocks are on "buys"--GOLD and MDG. That puts my nominal $BPHUI at 7.5%.

Four stocks remain on P & F "sell" signals--BGO, GSS, IAG, and KGC.

I use it in a totally inverse way. With only 15 stocks, that usually trend in tandem, it's an Dover Sole/overbought indicator.

It is also an early warning system for individual stocks.

A week or so ago, I commented on MDG's potentially bullish reverse symmetrical triangle and its possible megaphone bottom.

The other 9 stocks are neutral. CDE, GFI and GLG have "high pole warnings". This is not a "buy" signal. but a warning of a 50% retracement. It is an alert to a potential trend change.

Yes I was watching that double top yesterday and thinking that if I had a shorter timeframe I would have wanted to be a seller too. My caste of untouchables fell then recovered some but my model portfolio flatlined then went ballistic in the pm.
So I'd guess we may have a bit of to and fro for awhile but I think that the trend is higher and the danger for dislocations is to the upside. Better in than out, therefore.

Thanks Bear, I'm glad you asked.

I'm not a P&F guy. For my Bullish Percent, I use a simple 10/20 day exp. moving average cross and base it on my 100+ US traded gold stocks. I find this faster acting and suits my purposes. For my LT bullish indicator I use a 20 day simple moving average of the RSI(14) > 50, again based on my 100+ gold stocks.

Some interesting TA from Mr. Chan..

http://www.321gold.com/editorials/chan/chan061305.html

Summary

"Opportunities like this only comes along once in a blue moon..... whether this will turn out to be the big trade like we had in 2002 and 2003, remains to be seen; but the set up is here and we must be prepared"

Spoken like a soon to be married man. Give 'em hell Thor. U no what I mean.

You're wicked!

However the wedding is a done deal. June 4th is the date I have to try to remember annually.

Congrats.

SWC shows a breakaway gap and run on heavy volume. The move confirms the reversal that was first brought to our attention on the trendline break bac in May.

NYSE Chart of the Day
with Jeff Drake
http://www.signalwatch.com

ok, so everyone sees the supply line.... now what do they do with it.....
if the supply gets absorbed.....great...

Mr. Wallstreetwindow reports....

"The best news though is that the macro picture is lining up for gold. The biggest factor that has kept gold stocks down over the past year and a half is the Federal Reserves cycle of interest rate hikes that has given strength to the dollar. There are signs that we are seeing the end of this cycle, and once the cycle ends the next bull rally in gold stocks will be in full force."

some see a few more times in the rate raising.... and guys like Sy Harding says the fed usually doesn't stop till 5.5%

and another snippet...

"The important point is that the end of the tightening cycle will have significant implications for the global markets. Since the Fed began raising interest rates in the first quarter of 2004 the XAU gold stock index has been trapped between a range of 113 and 77. Once the Fed stops raising interest rates the dollar should drop down to its long-term 80 support level and will likely break it. The monetary cap on gold will be lifted."

well, don't know if there are any DX bears left....

There are some bears left Charmin.

thanks thor, and congratulations!
seems that i was stuck on last weeks thread, wondering why no one else was posting.
a few observations:( some of which have been addressed)
there has been a shift in the gold market. dolar up, gold up. gold has broken out in euros& rands. even though we have had a good rally, bearish sentiment prevails and uncertainty. the past correction was 50% of the previous move @ 84.2. raising rates is an admission by the fed that inflation is a problem(it wasnt rising rates that killed the market in 80). @ some point the rising rates will kill the economy, then i expect the foot to go from the brake to the accelerator. i used this correction to buy gold/silver. and i increased my position on the shares. almost all in, no margin. i think the 2nd 1/2 of the year will be bullish for the pms/au/silver. dharma

Thanks, Thor.

NEM

Will gap resistance yield and lead us out of the wildernees with this inverse Head and Shoulders pattern? Will we re-test the lower trendline at 37 or so first?

Or is your humble reporter simply full of stool? And the black abc portends further weakness.

Stay tuned tomorrow.

I think that the current confusing situation on world markets can best be summed up by the following equation:

ASSet/Zero=Undefined

where Zero is US$ and ASSet is anything else.


I have to admit I'm getting worried for the first time here about the gold rally. Maybe it's just a temporary thing. Might not hurt to ease up a bit.

Currently flat miners. I would be concerned if we can close below 184-185 HUI for the short term. We should be getting a tradeable bounce today or tomorrow. Today is 30 days from the May lows.

Normally I do not like to show one ounce prices because the coining cost or value over melt may change but it did not much yet

Kilo price is still 10 dollar away from the top

Come on silver. Time to bust out.

I never really gave the op ex theories much credence, but I suppose HUI 200 and XAU 90 would be good places to wipe out a number of option players.