- If something is broken, it can
often be repaired. If your car is in an accident, you take it to the
- If you go to the repair shop and
see it on a hoist with mechanics working on it, the odds are good
that repairs are being made.
- Junior gold stocks are the
passion, and arguably the lifeblood, of the gold community. They have
been broken, like a car in a bad accident, but there is now a beehive of
activity going on at the "technical analysis repair shop".
- To view GDXJ on the hoist with
mechanics working on it, please click
- As GDXJ has risen from the lows,
volume has started to grow. A key breakout over a downtrend line
occurred on Friday, and Monday's price action helped confirm it.
- Many individual junior gold
stocks have exhibited geyser-like price action over the past few days,
and I think that's a precursor to what is coming to the entire sector.
- The bottom line is that your
junior gold stock "vehicles" are being technically repaired
and put back onto the racetrack.
- Before this rally pauses, the
resistance zone created by the early June highs of $22.18 and the late
2011 low of $22.58 should be taken out on the upside.
- The $22.18 high is also the
neckline of a very significant double bottom formation. GDXJ and its
component stocks could stage a powerful rally from there, taking it to
the $30 level.
- Please click
here now. The Dow has a possible flag pattern on it. Flags have been
appearing on quite a number charts in various sectors over the past few
- These technical patterns tend to
be harbingers of near-vertical price movement. They could be indicating
that immense global easing is coming soon.
- Mario Draghi
and Tim Geithner have both recently indicated their extreme
dissatisfaction with the global "recovery". The FOMC meeting
begins today, and the US Department of Labour release the Employment Situation Summary
report on Friday.
- These are arguably the two most
important reports to be released in the past several months. All
institutional money managers are keenly awaiting them. The bullish GDXJ
and Dow charts suggest that whatever is coming, it is likely very
bullish for stocks.
- I often refer to silver as
gold's "wild little brother". Please click
here now. If silver manages to close to the upside today, that will
make it 5 consecutive days in a row of rising prices.
- I view the $28.50 price mark as
equivalent to about $1625 for gold, and gold has already tested
resistance there. Solid support has been created around $27.50, and I
would expect any pullback to be halted there.
- Please click
here now. The dollar had been rising in a parallel upchannel, but that is rapidly degrading into a
bearish rising wedge formation.
- It's important to realize that a
small move to the downside on the dollar index can be accompanied by a
very big movement in the gold price, on the upside.
- US elections are not far away,
and telling America's unemployed that "I'm a strong dollar man"
is probably not at the top of President Obama's campaign statements
- It's very difficult for the
stock markets of the debt-laden United States to rally, while the dollar
also rallies. Tim Geithner seems to be hinting to Ben Bernanke that now
is the time to unveil more accommodative Fed policy, to help the
nation's financial "risk-on" markets.
- Gold itself seems to agree. It
is displaying extremely bullish price movement. Please click
here now. That symmetrical triangle belongs in every technical
- Symmetrical triangles often
usher in powerful momentum-based price movement, and I think that's
what is coming soon to the gold market.
- The target of that triangle is
at least $1700, and such a move would open the door to a test of the
highs near $1923.
- The breakout occurred well ahead
of the apex, and it feels like gold has Fred Astaire's dancing shoes on.
- The question is, would you care for a dance?
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