Checking in on Bullion's Progress
posted Aug 13, 2006 at 02:00PM
I am still of the mind that bullion has one more leg up before a a more serious correction takes place. The pattern still fits the hypothesis that it is currently in a minor consolidation before. The breaking of trend-line resistance would be a confirmation that this leg is underway.
I think this consoldiation will take the form of a triangle. A move below and then back above the 50 dma whould be interpreted as me as a buy signal.
The down day despite the terror incident at the UK is a bit of red herring.
Anyone who has followed gold has recognized the past pattern of bullion "spiking" in reaction to an incident only to quickly give back its gains. Since the plot was foiled, buyers couldn't be bothered. Indeed the incident probably kept buyers from entering the market until the threat of whip saw had dissipated.