Monday, June 20, 2011


I've said it before, gold will do everything in its power to draw traders in at intermediate tops. Then it will kick them off at  intermediate bottoms.

There are a couple of dependable signals that almost always occur during an intermediate degree decline. The first one is a MACD crossover on the weekly charts. Second; gold almost always dips below the 10 week moving average (50 day moving average).

You can see in the above chart the divergence that is forming in weekly momentum. Gold is now starting to hug the 10 day moving average, possibly in preparation for a move down into the next intermediate cycle low. As the current cycle is now 21 weeks old gold is due, actually overdue, for an intermediate degree corrective move.

Another tell that occurs is a break of the intermediate trend line. That also has yet to occur.

Until we have confirmation that gold has completed its intermediate decline we will remain on the sidelines.

1 comment:

  1. So much for this doom and gloom. This has to be the most violent rally I've seen in my life time. Although I'm not that old (34) 7% in 5 days has to set some kind of record.


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