3 things.......before the bears start smiling

Firstly, on the daily gold chart draw a trendline from the March 08 peak ($1030 odd) and the July 08 peak ($988 odd) and extend it to the current action.

You will notice that (obviously) we broke through that trendline recently, but of note is that tonights action has taken us right back onto that trendline, tested it and as of now has marginally moved away from it. If the price can continue to respect that trendline and move higher from here, I would consider it a bullish signal.

Secondly if you draw another trendline, this time from the lows of Nov 08 (not the ultimate low in Oct) and the higher low reached in Jan of this year you will also find that this line intersects almost perfectly with the lows of tonight AND the downtrend line mentioned above

Thirdly, attach the RSI (7) indicator to the chart and note the higher low of the RSI tonight compared to four days ago and the lower low in the price. Classic bullish divergence (if it holds!)

So while I agree the action of late has looked a little shaky, if we can hold above the $890 level, I think we can look forward to higher prices. If not, well, things will suck......

All the best
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