Wednesday, May 24, 7:35 am EST. What was the last post? “Not much to cheer about”? You can say that again! So, Tuesday was a sell-off. We were bumping up against resistance, and it did not punch through. On the volume the ‘rally’ was generating, how was it ever going to?
So, now, what’s the damage? Is the selling on volume? We need to fall-back, regroup and re-set. We need to put in a true base, a support level. December is there. March is there. These need to hold, and prove to be even stronger support. From off of these levels, a new rally can certainly come, but it’s sure not looking like it was this time, since the May 4 low. Best now if that would hold, as we would have December, March and May bottoms as a real picture of bullish support… from which, one day, will emerge that rocket-rally that will make us all a good deal of money. The key is simply to continue to watch and to wait, and to not quit or give up… or, you’ll surely miss it!
Now, pay close attention to this, as gold, in the form of GLD, only fell back to its 50-day mov avg… and, just beneath the 50-day, is its 200-day, which means a “Golden-Cross” has occured, where the 50-day has just crossed up from under the 200-day, and price is still sitting atop both! This, in itself, would be considered a bullish sign… but, it would have to hold, and prove itself, so perhaps we’ll watch some epic struggle unfold here! That would take on this appearance… near-term resistance is not far above, and the support I just described is where gold is at right now. To go sideways here, and form a sideways, consolidative base would be helpful, and put in another support level, higher than the previous ones since December. Did I confuse you? Sorry, but that’s the picture being painted, technically speaking.
Then, and I’ll close on this: The metals have been behaving better than the miners, so they are still correcting their large outperformance from this time last year… and, the chart of all of them are creating a bullish wedge pattern, which would suggest that after this correction finally finishes; and that wedge is tightening, and getting smaller, the greater likelihood is that prices will break out to the upside, and the miners would outperform again!