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Dear Baa Baa,
I am really enjoying the content of your posts
and the numerous exchanges with others on this forum, and am
hoping you'll be around for a while.
Why 'Baa Baa'?
Regards,
Cris
----- Original Message -----
Sent: Monday, January 26, 2004 8:54
PM
Subject: [sharechat] POG TA
Price of Gold (POG), in USD.
Still keying off the USD,
although increasingly the Euro too, the POG
remains in a corrective phase
from 6/1/04 $428 high. This correction has
retested and failed at the
high, eased quickly to 417 then gapped down to
close at 408 on 15/1,
followed the day after by a first test on the 50MA
around 405. Last week,
the POG range traded between 413 and 408, but, today
(Aus/Asia) on renewed
USD strength, tested and broke the 50MA moving to
404.50 - currently about
406. This could be either wave 5 of A down, or more
likely wave 3 of A
down. Some might consider the leading US mining stocks as
a lead
indicator, esp the mid/large cap NA's in the HUI, for example BGO, &
NEM, both of which are well advanced in their correction (anticipated gold
weakness).
Price action since the 13/1/04 is in a well formed PDT
(power down trend).
Key indicators show weakness -%R in oversold, STO
perked up, but has crossed
over again to ovesold, MACD oversold and
recrossing MTM/CCI weakening.
Volume has risen but in the sell
side.
Projections:
Plan A - assuming USD strength continues (my
TA on USDX says 89-94 range is
target resistance trendline - currently
86.5), then, expect to see the POG
100MA at $395 and that'll be enough to
spook the weak hands for a retest of
the all important S2 line at 378, and
below that the 200MA about 373 ...
always a strong. Response: Buy
progressively into weakness, accelerating
accumulation as each support
fails and if a turn occurs, convert all dry
powder for the ride back
up.
Plan B - assuming USD weakens, unlikely imo, but anything can
happen and
often does. Look for key resistance at 413 and gap filler at
417. I hate
buying strength, but if it pops through 425, pile in but keep
a finger on
the sell trigger. If 428 falls, hang on for the ride. I am
using a
5SMA/14EMA crossover to confirm the trend change.
Finally,
"bear" in mind the 'Prechter Zone'. Widely maligned the perennial
bears
insist the failure at 428 was a 8 year top -wave 5 or (5) of
[C]circled,
which in english is OUCH! The Prechter zone for the current move
is
$50-$75 decline to the range 377-353 (ergo the 200MA!). Alternatively,
consider the Sinclair zone ... somewhere near the moon, but even Jim is
suggesting a decent correction if we can't break out of the trading range
to
the upside This
Week..
JMO,
BAA
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