posted Apr 14, 2004 at 11:13PM
(Note:the circle showing price coming back into the triangle should be red)
As one would expect some buying came in at 200dma/40 week moving average level. time to be alert..but right now I am of the mind that lower prices are coming.
The breakout of a triangle only to disintegrate is the key feature of the charts and has ominous implications if you use standard measurements. From an elliot wave theory persopective it smacks of "throw-over"..an excessive exhaustion of speculative fervour..which is reinforced by the COT figures for the time
Again, the real possibility of a change in interest rates and the continuing news on the economic front make this correction different than past ones in my opinion. Another good job reports means stronger dollar means lower oil prices...means greater purchasing power for USD = stronger dollar. Little to do with fundamentals...but there are some huge carry trades that may have to be unwound and that takes time.
If background memory is correct the current account deficit decreased yet again...another warning shot to the gold permabulls
Although some respected names are calling for a top in gold, my way of viewing the charts says not yet. The monthly for gold is still fine and no major trend-lines have been broken and the USD has yet to break, test and move off its 200 dma. so I look at this as a correction, with the potential to be a big one.
The US is spending money like no tomorrow, but not on anything of direct benifit to citizens or infrasture or knowledge. They are wasting money...perhaps a definition of inflation you won't hear too often.
I will become more interested if HUI gets to major trend-line support around 200 and maybe a litlle lower. The breaching of 200 and trend-line support should get a lot of technical traders out of the system.