Gold Miner Index Analysis
Red Alert? All Clear?
NOW WHAT? Its getting really bad when you can't trust criminals to do what you think they are going to do!
"The Sinews of War are Infinite Money." Cicero, 106BC-43BC And >>>>> so we see the inflow of funds into PM Assets peaking.
Above we see on the XAU chart that when the Close of the XAU gets more than 10% (GOLD LINE) ahead of the 50 Day Moving Average (TOP three RED circles make that abundantly clear), it becomes vulnerable to a correction, which is where we are now. In the GREEN box at the lower Right Hand Margin of the XAU chart, we see the entirely Unheralded GOLDEN CROSS(other than PM Bulls). Now for those of us in and loving "Hilly Billy TA", that is a perfect indicator EXCEPT that it comes at a time when the CLOSE of the XAU has gotten 10% ahead of its 50 Day Moving Average.
What struck me like a wind coming up was the number of writer/analysts calling an ALL CLEAR. It seemed Classic in that as we engaged the Third (3rd) Leg of a Bull Movement started in Early December, and have fueled this run as Early Adapters joined the run, that we now begin to lose power, momentum and accelration as the Last of the Crowd piles in, and we get a spikey top that leaves us RIPE for correction.
Where Should Investors Look Now?
Rather than be distracted by the smoke & mirrors so nicely provided, let us look at the back trail.
Analysis: Breadth Oscillator Daily & Weekly at the top of a 3rd Leg in a 3-legged Bull Advance started in Early December.
Two intermediate flat corrections in place, now possible a classic reaction-correction to the Feb 10 GDX Gap 23.94-24.23, HUI GAPS either 218.73-221.84 (scary) or 226.23-226.83.
Logical Stopping Points
The BULL will do everything it can to throw off as many riders as possible, while the Market collects its fee for educating the new comers, and those without savvy.
Keeping in mind that certain dates act like magnets, if you were surveying this terrain, and you knew that Income Tax Day was Monday, April 15, that Good Friday was April 18th, and the Full Moon peaked on the Night of April 15, plus that was the 1st Anniversary of the 2013 COMEX GOLD TAX DAY MASSACRE, what would you expect of the market action on that week?
Since corrections tend to occupy about one half of the time of the move they correct, and this rally has been on the move since Dec 10, might that week be the logical end point of any REAL Correction? Thats my hunch. I am not a stickler on tight counts, so I do think that a good look at approximate possibilities make it easier to visualize multiple outcomes, and then attempt to assess probabilities. Having seen all manner of breakdowns in technical formations, this seems at least possible, if not probable, since I do not discount anything.
In light of the great rally we have had, we then see it as possible that this rally will need to correct in solid fashion in order to establish a base from which to run up a new rally.
I have illustrated the GAP FILL ZONES below.