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ChartWorks
July 29, 2003
THE GOLDEN TRIANGLE
Technical observations of Ross Clark |
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A "symmetrical triangle" is in the midst of
being formed. The August gold contract formed a beautiful bottom two
weeks ago with gold stocks leading the way off the lows. Prices have now
tested the downtrend line from the February top. This rally to
resistance is typical of the moves we saw in July '78, March '87 and
July '94. From here we'd like to see a small 2.0% to 2.5% correction
($358.50 to $360.40) followed by a breakout.
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The upside objectives are $398 and $428,
based upon the height of the consolidation pattern. As outlined in June,
this next leg in the ongoing bull market should be at its price targets
by the end of the summer (i.e. mid September).
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The bellwether 10-year swap rate, which
broke out at 37 bp on July 15, rapidly widened to 41.5 bp on Friday.
Yesterday's remarkable jump to 45 bp is a warning on most financial
games. The action has followed through at 46.25 bp today.
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ChartWorks
August 28, 2003THE GOLDEN TRIANGLE
- CONCLUSIVE BREAKOUT MUST NOW HOLD
Technical observations of Ross Clark
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The
charts display Gold Corp, Newmont and the S&P as of now and the
examples of 1978, 1983, 1987 and 1994. Today's close of $374.10
breaks the December gold contract out of its six-month resistance line.
The four previous examples we have been following as guidelines now offer
important clues as we move forward: |
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Prices should not pullback inside the
breakout ($366.40)
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Closing prices should stay above the 20-day
exponential moving average until the next interim high is in place.
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Silver and platinum should rally along with
gold.
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The extent of the rally should be equal to
either the complete height or one half the height of the base. Targets
are $398 and $428.
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The time window for an interim top is no
earlier than Sept 9th and no later than Sept 22nd.
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Look for divergence in the RSI on stocks and
bullion as the targets are met.
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The mining stocks have been outpacing the
bullion since the April bottom. Look for resistance against the upper
channel lines with in the next few days.
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Once the breakout move in bullion has made
its initial run of two to five days, use the first 50-60% pullback from
the breakout ($366.40 basis Dec & $364.60 basis cash) as a new entry
point for bullion and stocks.
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This has been one of the most
publicly anticipated moves in years.
In the event that the rally
fails to take hold there will be some very overextended positions and the
market could become quite vulnerable. Risk should be limited to just below
the $364.60 breakout.
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ChartWorks
September 11, 2003 |
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The Golden
Triangle
One more leg to the upside next week
Technical observations of Ross Clark
The charts display
Gold, Newmont and the S&P as of now and the examples of 1978, 1983, 1987
and 1994.
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It is now ten trading days
since gold broke out of the major resistance line from the February high.
From a timing perspective, we are looking for a short term low on
September 11th or 12th followed by a 4 to 7 day rally to the interim top.
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When looking for upside
targets it is apparent that the initial 7 to 10 day thrust out of the
triangle tells us a lot
about the strength of the market. In the four examples below, this initial
move was generally about 60% of the
total rally. In the current instance the rally was $18.
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Therefore, we are revising
our upside target to the $394 to $398 range. Once again, stocks should
continue to under perform. Traders should look to be selling into the next
rally.
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Support (on a closing basis)
is now critical at the 20-day exponential moving average ($372). |
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COMPARISONS 2003 AND 1987
DJI ~ US$ ~ T Bonds ~ Gold |
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Chart Notes Below:
pink: XAU
yellow: Gold
blue: Value Line
green: U.S. Dollar
red: S&P 500
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Performance Comparisons
(March 2000 TO Oct 2003)The XAU gold index performance has been
handicapped by Barrick and Placer. Sadly, these are still addicted to
forward selling. |
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Bob Hoye
Editor & Chief Investment Strategist
www.InstitutionalAdvisors.com |
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