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Bullion Charts and Commentary
posted Apr 1, 2006 at 03:07PM

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Bullion/USD Ratio

HUI Daily

HUI/Gold Ratio


The price action of the sector since the ADX crossed over has been tremenously bullish. Should one be selling now that the HUI is pressing into resistance, or wait and see if it morphs into something even more substantial.

I would stick with things here. I would not sell "in anticipation of a top, but develop critieria for letting the market take you out. If bullion's channel break-out is negated is the one thing that would give me pause here.

Bullions price action looks impulsive and definitely looks to challenge the large number resistance at 600. I think the usual truism of "stocks lead" will be reversed for this phase of gold's bull market. That is, bullion will lead and gold stocks will follow.

Unhedged stocks are definitely outperforming here. The HUI looks ready to reach for new highs. The XAU and DJUSPM indexes are not so enticing.

It is possible that the HUI has just completed an upper leg of a triangle and will now do a downwards leg to the 285 to 290 level. But I no longer would bet on that.

I think we get a little sideways movement here and then one more surge up to complete an impulse. We will take things from there.

I don't follow silver but one gets the feeling a important IT top is coming there.

In the end perhaps the best guage is your portfolio total. Is it moving in the right direction? If it is, then I would not be overly eager to change things.

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