Gold finally got a little relief, but is this just a little relief rally aka a DEAD CAT BOUNCE or the start of something better.
So sayeth the BULLS.
Silver posted an outside bar to the upside. I have often mentioned that "outside bars" need to be closely watched as these bars can signal a change in the market.
If the BULLS can take out today's HIGH then that very well may signal a change in trend. However, if the BEARS take out today's LOW then the action today is a "bull trap" and the metals are heading for further lows.
The HUI, index of unhedged gold mining stocks, posted a powerful bar to the upside. Although for the past week NONE of my target numbers have been hit so I am flying a little blind right now and have nothing to share. The pattern of the last five sessions is of a Higher high and a Lower low, so that is bullish.
What happens next is huge, so pay attention!
The BULLS need to follow through with today's action and the bar is high. I need to see a significant rally to believe the worst is over. What does that mean? The last HIGH was at 338.04, if there is any follow through that falls short of this mark then HOUSTON "we have a problem".
Easy. The Stock Market is causing fear and FEAR makes people fly to "safety" and "safety" for some folks means BONDS.
When money flows into bonds the "interest rates" fall. When the "interest rates fall" the value of the Federal Reserve Note also falls.
When the value of the Federal Reserve Note falls, GOLD and SILVER rise in price.
So there is my speculation. Keep an eye on the interest rates!
Simple enough, the ten year yield is far below the rate of inflation which means gold shines.
So there is my speculation.
Peace out and Stack On!