The following is just a small excerpt from my latest Weekly Strategy Session (please click on that hyperlink for details about trying it out). which I published for members and 12631 subscribers this past Sunday.
Gold, silver, and their miners all rallied sharply last week, which is a strong step in the direction of the weekly chart bullish RSI divergences we have been tracking for months on end in these Strategy Sessions.
At issue now is whether we have just seen a fast but doomed, short-lived bear market rally, or instead the beginning of a new bull for the precious metals and miners.
First and foremost, we know that gold, silver, and most miners still have declining 200-day moving averages (yellow line on my charts), giving us the presumption of a bear market still intact. Recall that the slope of a major moving average tends to be more important, generally speaking, than whether price marginally breeches the moving average. Here, the slope remains lower.
As you can see on the first two charts below of the daily timeframe, gold and silver (ETF’s) both popped above their 200-day moving averages last week, as well as above their upper daily chart Bollinger Bands (indicative of short-term overbought status).
While it is true that they are now overbought, generally speaking a new bull market off a major bear market low will see price ignore these conditions and push higher yet, whereas a mere bear market rally is likely to now fail at the declining 200-day and roll back over in an abrupt manner.
Thus, should the metals and miners remain stubbornly overbought in the coming week, it should be taken as another strong step in the right direction for bulls in this space, not just on a standalone basis for that price action itself, but looking out several weeks if not months.
Also note that…
Please click here to continue reading
Comments »
