The Dollar, Oil, Gold & Equities
Snippet from February 6, 2016 Chartworks
We have lived through many sharp rallies following multi-year downtrends in the gold market. The longer the preceding downtrend, the more dramatic the countertrend rallies have been. This downtrend is overdue for a significant countertrend move. Over the past three years rallies have straddled the commonly reported 200-day moving average and 50-week exponential moving average five times. The 1% envelope over the 50-week ema (currently $1170) has capped all of those rallies. While moving averages can serve us well during trending periods, it is the action on the first major violation of a trend that must be monitored closely. Moving through the $1170 to $1180 range could trigger substantial movement.
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