Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Stocks, Bitcoin and Crypto Markets Breaking Bad on Donald Trump Pump - 21st Nov 24
Gold Price To Re-Test $2,700 - 21st Nov 24
Stock Market Sentiment Speaks: This Is My Strong Warning To You - 21st Nov 24
Financial Crisis 2025 - This is Going to Shock People! - 21st Nov 24
Dubai Deluge - AI Tech Stocks Earnings Correction Opportunities - 18th Nov 24
Why President Trump Has NO Real Power - Deep State Military Industrial Complex - 8th Nov 24
Social Grant Increases and Serge Belamant Amid South Africa's New Political Landscape - 8th Nov 24
Is Forex Worth It? - 8th Nov 24
Nvidia Numero Uno in Count Down to President Donald Pump Election Victory - 5th Nov 24
Trump or Harris - Who Wins US Presidential Election 2024 Forecast Prediction - 5th Nov 24
Stock Market Brief in Count Down to US Election Result 2024 - 3rd Nov 24
Gold Stocks’ Winter Rally 2024 - 3rd Nov 24
Why Countdown to U.S. Recession is Underway - 3rd Nov 24
Stock Market Trend Forecast to Jan 2025 - 2nd Nov 24
President Donald PUMP Forecast to Win US Presidential Election 2024 - 1st Nov 24
At These Levels, Buying Silver Is Like Getting It At $5 In 2003 - 28th Oct 24
Nvidia Numero Uno Selling Shovels in the AI Gold Rush - 28th Oct 24
The Future of Online Casinos - 28th Oct 24
Panic in the Air As Stock Market Correction Delivers Deep Opps in AI Tech Stocks - 27th Oct 24
Stocks, Bitcoin, Crypto's Counting Down to President Donald Pump! - 27th Oct 24
UK Budget 2024 - What to do Before 30th Oct - Pensions and ISA's - 27th Oct 24
7 Days of Crypto Opportunities Starts NOW - 27th Oct 24
The Power Law in Venture Capital: How Visionary Investors Like Yuri Milner Have Shaped the Future - 27th Oct 24
This Points To Significantly Higher Silver Prices - 27th Oct 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Gold and Stocks, When it Breaks, It's Going Somewhere In a Hurry...

Stock-Markets / Financial Markets 2010 Mar 22, 2010 - 07:18 PM GMT

By: J_Derek_Blain

Stock-Markets

Best Financial Markets Analysis ArticleGold and silver are both in a fairly tight consolidated trading range over the past several weeks, keeping both metals bound within a compressed psychological battle between mid-term bulls and mid-term bears.


This range is extremely important, and is probably the largest hurdle that needs to be overcome before a sizable move to either the upside or the downside.  Our opinion is still that the downside is more probably than the upside, and if the range is broken down it should usher in a move to the $950 area at minimum, with our downside target somewhere around $650.

On the other side of the coin, a break to the upside would make this small multi-week uptrend in gold an impulsive-looking move rather than a corrective one.  This would indicated that there was still a larger degree impulsive move to the upside, which would probably take gold on to new all time USD highs at the $1300 mark or so.


Aside from that, the technicals on gold stocks themselves are looking long-term over-extended, with the Advance Decline level on the XAU hitting a level 75% higher than it has ever in the history of the index, despite the lower-high made in December 2009.  See here:

What's more, we are at what I would call a "very respectable" level of complacency in market investors of every ilk, with fund managers holding less than a 4% cash position at the beginning of 2010 (a record beat only by the market top in 2007 @ 3.6%), and the VIX just recently moving down to what I call the "relax" range.  The RSI reading on the VIX is also extremely oversold, to a level hit only twice previous since 1988 - this in itself is not indicative of an immediate "market crash" or anything, as the VIX can stay "oversold" and have a slowly trending upward price movement momentum against a slowly falling actual value.

Here is the VIX portrait for March 2010:

While we still think downside is the higher-probability in the markets, irrational exuberance and "hope" takes a lot longer to fizzle out than raw fear does to bottom and reverse.

Keep your stops fairly tight out there.

By J. Derek Blain

http://www.investophoria.com

© 2010 Copyright J. Derek Blain - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in