does volume mean anything to you...?

G'day all,
Just looking through some charts and thought some may want to see this. Sticks out like a sore thumb to me.

Firstly two charts of GLD - a daily 2 year and a daily 6 month



On the two year, you can see that technically speaking, we have had a move of equal proportion. A move up, a triangle consolidation then a move of approximately equal price and time. It would be quite normal for their now to be a bear move to complete the full bull/bear cycle. A full cycle includes both an up and a down move



On the 6 month GLD chart above, you can see the two arrows pointing to the volume. The first of these was the bar that broke out of the triangle consolidation and more than doubled the volume preceeding it. Now look at the volume last Friday. Big price moves accompanied by huge volume increases should be respected. Buying at the first arrow where big up volume and a big move up in price occured would have netted you a $200+ move. It would be reasonable to expect that Friday's move is suggestive of the start of a decent correction.


Now UUP, which is the bullish USD ETF, again a 2 year and 6 month chart



The 2 year shows a few things. Firstly the move down in the USD which has supported risk assets for 9 or so months. If you dont believe that the move down in the USD has been the driver of the move to take on risk then you might as well stop reading. That move has taken the USD index from 90 down to 74, a move of almost 22%. Thats a huge move for a currency. It is only natural that some of the move now needs correcting. Secondly the chart shows the price is back on long term support. Thirdly as noted in a previous post of mine, there has been a huge increase in volume. Can anyone say 'intervention'



The 6 month chart shows the huge increase in volume over the last month or so and the two days of extreme volume which align with two large up days.

Volume in both GLD and UUP is telling you something. If you don't want to listen, so be it, but as far as I'm concerned its shoutig it from the roof tops :)

Finally GDX. It has bothered me for a while and I think I've even commented on it a couple of times, that while Gold and GLD have risen heaps, even starting to go parabolic briefly, GDX has lagged behind and while I haven't calculated it, has moved only equally or maybe evn less in % terms than GLD. Thats not normal. Its a divergence that indicates that the move in Gold is not 'the big one'. If it was GDX would be leading from the front. Mining companies have leverage and as such in any serious move they will move by a larger % than the underlying commodity.



Again you can see the noticeable changes in volume. A large increase a few months ago signalling an up move, and now huge volume which (IMO) signals a down move beginning.

All that said and done, maybe Mr Market proves me wrong, but to me volume and price action are sending the same messages.

If your not a long term investor its time to be very cautious I believe.

Its my belief that after a major correction in the equity & risk markets driven by a USD rally, gold equities really will be at the point where the move that the long term gold bulls have been waiting for will finally arrive, and it will probably arrive before the rest of the equity market rallies, just like they did in Nov 08 where the general market didn't move until Mar 09.

Hope your all well

Cheers
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