XSO (ASX) The Brains Trust

Originally posted by paddington bear ↑

Two markets stole the show overnight – gold and crude. First of all gold – wide range but closed near the bottom of the range which is a bit negative. Also left a little gap and I do like gold to fill the gaps as it goes along. But even though it touched the highest level in nearly two years, I still don’t think we can count this as the break-out everyone is waiting for.

Adding to gold’s woes, silver just did not participate as it needs to. As I have mentioned before, silver has been a real drag on gold prices. Silver tried hard initially in the session but came back to close near the low.

And crude – another big move – and got to the best price in three years but here again, came off its high. However, as with gold, we need to see a bit of consolidation along the way. Also – natural gas. I do like to see that move with crude and it isn’t so I suspect that natural gas prices might start to weigh on crude.

I keep one chart with just the closing prices of crude and gold – cuts out a lot of noise. What would be fabulous now on gold would be a little correction and then a blast through the old highs……

And of course Wall Street had to do the opposite to the previous day – something it seems to have got in to its trading plan at the moment. Still holding in this “potential” head and shoulders pattern but I am concerned that this potential pattern is getting a bit too much attention and as soon as that happens, even a topside breakout is likely to fail. The markets do not like to make things easy. So we have to just continue monitoring trading on a daily basis.

And what the hell is wrong with the coking coal price? Falling away quietly.

Australia eased back yesterday in the face of negative overseas news. Whatever has happened to AMP – looking a bit serious whatever it is. BHP and RIO together with a few other miners came to the fore to hold things together – something that has happened a few times in the last year. But our Gold Index stole the show and is likely to be a bit better again today. However, despite the fact that I have a bullish picture on one of my indicators - now higher than the last high in the Gold Index - I don’t think today is the day to suddenly discover gold stocks as if gold comes back again there will be further opportunities. However, the sentiment in the area is greatly improved and as I have mentioned many times, so good to see so many of the gold stocks hitting 52 week highs while the gold price itself was stuck below overhead resistance.

Talking of gaps in gold – our miners showed up a fabulous example yesterday of a stock filling a gap – SGQ gapped up from 12.5 to nearly 20 cents amidst lots of posts on the potential for this stock and ran to 49 cents. Has spent the last five months coming all the way back to finally fill the gap it left last year. Anyone new to charts should study this example very carefully. I do remember a huge amount of optimism about the stocks prospects when it ran – but the chart didn’t lie.

Expand

On the topic of silver PB, here's a chart you might be interested in.

https://pbs.twimg.com/media/Dag2GIuXcAAr_gL.jpg:large

Combined with this.

https://pbs.twimg.com/media/Dag-IgSVwAAboo3.jpg:large

Things may be about to get very interesting indeed.