Thomas
DeChastelain
Memorial Archives

Bullion Charts for June 28
posted Jun 26, 2004 at 12:45PM

Price Action



Daily Chart



Weekly Chart



Yield Spread



Stocks vs Bullion



China



China had many "soothing" things to say which kept miners happy. But governments are always saying "soothing" things. The chart above is screaming "hard landing"


Currency Check



I think this current decline is the equivalent of the March 03 delcine in equities which had all the perma-bears clukking that the next down leg was underway.




The entire market trade is still revolving around interest rate hike expectations.

When the durable order numbers came up soft all the rate sensitives went up...gold, housing and financials, all on the basis that the Fed wouldn't hike rates agressivily.

If the market was concerned about a slowing economy the Nasdaq wouldn't be now breaking out of a bullish pennant.

If the fed does what is expected...i.e. raise rates by .25 percent - with the promise of more in a "measured" manner then the charts are foretelling a move to 411..before rolling over.

The gold stocks are lagging bullion which implies that we are in a countrend rally to keep perma bulls interested. As such all long positions I take are of short term nature with tight stops


If the Fed doesn't raise rates at all (more likely than people think) then we can expect vigourous northwards action in gold stocks and retesting of old highs. If he raises by .50 (very unlikely)...then everything equity will get gutted.


Breaking Free

I wrote my first "formal" commentary because I wanted to shoe horn some comments about the industry and the philosophy around gold. It was never my intent to become an "analyst guru"..... I make my money trading...not giving opinions and writing a weekly column has become a bit of an albatross.

The real reason I set up this site was so I could store annotated charts for my own use and to post on various trader boards to discuss with other traders.

I also want to keep the freedom to change my mind on a moment's notice....which is not compatible with weekly columns.

So just to say that formal commentaries will become much more irregular events..and only when I feel I can actually add some value to the plethora of commentary which is already available on the net.

Until then good trading.

Bullet Bullet Bullet