Well here we are…..the S&P has broken down out of the up-slanting wedge I have been mentioning for the past couple of weeks. Now I know I should be celebrating but I have learnt over the past eighteen months or so that “they” have been able to thwart breaks in the market by being very aware of what is happening. So, I suppose I am just a wee bit cautious about claiming it is all over simply because there has been so much “pride” running on the performance of the market. Oh sod them - the S&P has broken down and the game is over. Now pass me that champagne!
But look at the performance of gold. “They” did try to break it down as I was worried they would do, but the support held fast at 1400 – such a wonderful sight on the six hour chart this morning. I am really excited that we might now head off to my next target of $1500. And remember what I have said about gold recently – it has been a paper market for years but if it turns into a real commodity – and by that I mean investors starting taking delivery – then there is just not enough gold to go around. If that starts to happen my first major target of $1800 will only be a stopping point.
And silver – isn’t it amazing. Gold couldn’t get on with the next move until silver sorted itself out. I do always like silver to actually lead gold so now I am happy.
But not so happy about crude – sitting just above my important support of $56.
And watching lumber prices again. Has had a big fall - down 100 whatever lineal it is measured in – that is a fall of a third in price. Remember – need lumber to build houses to push the economy along etc…..
So what does all this mean for us. Interestingly, yesterday I mentioned that our market needed the big boys to show up and BHP and RIO got the message and put their shoulder to the wheel extraordinarily well which helped sentiment along. I have a “secret” chart on the XJO and one down day will break the uptrend from the low at the end of last year. So will need those “big boys” and “big girls” as well today. If they don’t show up – it is finished.
However, as I mentioned yesterday, have lots of interesting charts at the bottom end of the mining market, and water for that matter, so should be enough opportunities around to keep quite a few of us out of mischief.
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