XAU Gold Ratio
posted Mar 6, 2006 at 02:50AM
One shouldn't read too much in my not posting "commentary" this past weekend. In this case I was bogged down with house painting. As well I genuinely didn't have very much to say beyond "trend is up, sector is overbought, be careful and the garbage has yet to fully participate so that is where you may want to place some bets" type stuff.
However I was just going through some charts when I noticed the one above. I must admit it came to me as a surprise, as historically a move below the 50 dma at these levels has been a signal that the sector is about to correct rather hard.
Surprise in that if this is a "Wave III" and all the evidence supports the thesis that it is, then one should expect that all retracements should be quite shallow and fleeting.
Anyways it is something to look at and keep in mind. It does suggest that having tight stops on any new or planned entries is not a bad idea here.
QRL.TO (triangle) and BZA (trend-line support) are two charts you may want to look at. I have no money to play but I still like looking at charts.