Thomas
DeChastelain
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Bullion Charts and Commentary
posted May 28, 2006 at 12:38AM

Bullion Daily



Bullion Weekly



HUI Daily



XAU/Gold Ratio



US Dollar




Thoughts

Well the deep probes south on the candles (HUI)along with trend-line support holding, suggest that stocks should dig in a little here.

As well bullion looks it has completed an impulse and will try to rebound here. What I would like to see is a move back up to 700 and then go on to form some kind of sideways consolidation pattern.

If the bounce does not go that high then we are looking at a B wave type affair, which means at least one more major leg down.

I know there are some pretty big names saying that the USD has hit a major intermediate bottom and that it will now rally to new highs. So far though, the price action looks like nothing more than a technical bounce off of very oversold levels. It would take a move back into the channel before I started thinking otherwise.

From strictly a trading point of view I would be thinking short term bounce trades. If an individual stock is hitting major support levels you might think about some strategic "accumulating" as long as you understand that this consolidation period may last through the summer.

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