Thomas
DeChastelain
Memorial Archives

HUI Weekly
posted Apr 28, 2004 at 10:36PM



Being in cash has been a prudent thing to do. All the markets look to me to be in deep doo doo. The only exception is oil...but it appears to me that we are reaching a point where everyone is on the same side of the trade..over very close to it.

The HUI? I find myself still cautious at this stage despite the fact that a lot of the gold currency metrics are where you would think a bottom would form.

One is the break of the long term trend-line...not something to be taken lightly. The other is that fact that it IS so oversold, reaching levels not seen throught out this market. You would think with the USD reaching major moving average resistance that speculators would be stepping up to the plate.

The fact that they are not suggests underlying market weakness.

Today the index plunged from oversold levels...which is where crashes originate.

A bounce of course is inevitable at some point. I find myself wanting to let it play out and see the pull-back from that to see how it unfurls...I would very much like to see some positive technical divergences develop. (As well I am planning a trip in the next week or so, and I definitely do want to be holding ANY stock while away fromt he computer)

The spectre of rising rates and China's public declarations to get growth rates under a tighter rain are overhangs gold did not have to contend with at past corrections

And remember gold is not oil...if all the gold in the world just disappeared..most people would not notice. It is a trading vehicle and right now the gold sector is giving all the signs of a market that has topped.

Any long trades at this point are strictly short term.

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