--Gold Charts R Us--

+ WWW (When We Wait)

Welcome to GCRU #235 on Nov 29, 2006 (in our 5th year). •••• Cheery gold action this week! J. It started curiously, with gold bullion giving back a $6.00 intraday gain last Wednesday to close up just 30 cents on the day, in spite of a sharp decline in the US$. This unusual action was most likely a mix of gold cartel antics (selling) at crucial neckline resistance of the 3½-month reverse H&S base, weakness in crude oil & aggressive profit taking prior to the long US holiday. Whatever the reasons, uncertainty evaporated Friday as the US$ crashed to a new 5½-month low, breaking key Dec 84.50 support. This helped to propel gold to a new 2½-month high & 2-day closing breakout above the Feb 642 neckline resistance of its 4-month R/H&S base (723.50 theoretical target). •• The Comex cartel ‘boys’ must have had trouble digesting their turkey this Thanksgiving, with a major breakout occurring on the CBOT exchange last Friday, & this on the first occasion the CBOT was open whilst the Comex remained closed. Perhaps the turkeys weren’t the only ones who got ‘stuffed’ this Thanksgiving! •••• Silver popped above resistance of its Sept peak, on volume, to close at a new 6-month high. Spinner lines are bullish on the weekly & daily charts. Lead R/S in silver is a bullish omen as it has such a strong tendency to lead gold. •••• Global stk mkts have been rising for months & now look vulnerable to a pullback (already begun on Monday?). The last stk mkt correction in May, helped prompt a ‘killer’ correction in gold shares, as weekly momentum indicators were heavily overbought at the time. Things are different today, with the majority of weekly indicators rising in the lower range of overbought territory. Thus a slide in equities may have a less harmful effect, but gold shares won’t be immune to a pullback. So keep a close eye on global stk mkts & be ready to grab profits &/or tighten stops in gold shares when mid-year uptrends (in stk indexes) start to crumble. •••• This burst of strength in the gold mkt will offer us an opportunity to ‘filter’ gold shares & seek those with the best Relative Strength, separating the strong from the weak. And pull the weeds from our portfolio & replace them with top R/S stks (& why not add a few silver & uranium shares which are currently leading sectors). We rant incessantly about the value of relative strength & regular portfolio upgrading, because we believe it’s a key element to successful trading. If U aren’t convinced, take a look at some of the charts we’ve dropped recently from GCRU (a la FMM-T, VGZ & Cameco, etc) & compare them with the charts herein. Which would U rather be holding? •••• Note that UBS (Union Bank of Switzerland), the big one, estimated on Oct 26 that speculator involvement in gold globally stood at a 15 month low. That’s amazing, & wonderful news. It means gold has been able to climb back well over the 600 level without much speculator participation. Thus, when they DO get back in the mkt, gold will escalate in size. ●●●● Last weeks breakdown in the US$ was no doubt amplified by empty trading desks & thin volume due to the long US holiday, & a bunch of stoploss/mkt buy-sell orders sitting at the same levels. The $ bears may encounter stronger headwinds as liquidity returns, but fundamentals & chart action warn US dollar weakness is unlikely to end in the short term. As mentioned last week, the rare occurrence of negative crosses in both the weekly & monthly momentum indicators suggests last week’s breakdown could mark a major sea change in the US$. It’s early days, but a makeshift US$ roadmap could include an oversold rebound towards the Dec 84.50 neckline resistance, before a new dip & re-test of May-June 2006 lows/support, & finally a down-leg towards multi-decade support at 80.50. We can decide what to do when we get there. In the meantime, & as advised in this weekend’s HSL, traders should lower (&/or hedge) US$ exposure of their total portfolio/assets (meaning house, car, biz, bonds etc) to 10% at mkt &/or into any strength below Dec 84.50. ●●●● Bellwether Agnico Eagle broke above 40.50 resistance to close at new multi-year highs & validate a bullish ascending triangle with 55.00 poss upside target (basis L/O/C). This is in stark contrast to Newmont Mining, our former (R/S) bellwether of many moons ago that is currently languishing at 21% below its May peak! ●●●● With the breakout in gold bullion cautiously confirmed, traders should look to increase exposure to gold & gold shares, but remember the gold sector is the most volatile sector of them all, so trading is the only way to play it. ●●●● See U in the Wednesday AM PS. ●●Blue skies ahead, for gold advocates that buy/sell/buy/sell J. ●●●●Best wishes from Uncle Harry & Paul.

 

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PS: •••• Gold shares continue to make headway, with most now developing healthy & seemingly sustainable uptrends from recent lows. Tuesday’s action was mixed, but any shorterm hesitation is a likely side effect of faltering stk mkts, the lack of momentum in gold bullion, & the need for euro currencies to consolidate their recent breakout action & for the US$ to work-off its current oversold condition. •••• The CRB commodity index closed at a new closing high ystdy & is set to break above pivotal 400 resistance. Trading range action of the last 7-months hints a 40pt upside measured move may be in the winds. •••• The Schultz Gold Share index (SGI) reinforced its bull flag breakout, but now faces resistance from it May peak. Bull flags at this stage are said to be at ‘half-mast’, as they generally form at the midpoint of a rally-leg. Their price targets are derived by adding the height of the preceding ‘mast’ rally, to the upside breakout point of the flag -- which gives a potential target of 29.00 in SGI. •• The XAU gold index has finally made a closing breakout above resistance of its May downtrend, & HUI looks set to do the same. If the HUI does rise to join the party, it will kindle a new wave of technical buying as threats of potential H&S tops (seen in the weekly charts) dissolve. •••• Spinner lines have made a positive cross in the weekly crude oil chart, which suggests the reaction lows of the July sell-off may have been put in. ••Our gold share Advance/Decline line has risen nicely above support of its May downtrend & is now positioned to pop above neckline resistance of a newly formed 4-month reverse H&S base. •••• Spinner lines have improved across the board via positive hooks in red timing lines, but sustained price strength (1-week or more) is still required to reverse negative downturns in blue confirming lines. ●●●● Bonds gave buy cue. Is major signal. ●●●● Bullish Consensus shows gold at 66%. US$ at 33%. Their forecast neutral/bearish short-term, with intermediate trend neutral/bullish.” We are a shade more optimistic both short & intermediate term. ●●●● Top picks of the week: both are new picks to spice up the portfolio. Altius Minerals (TSXV: ALS); its mainly nickel with exposure to gold & uranium but the chart is too sexy to resist. And Hecla Mining (NYSE: HL); silver&gold. •• All boats rise in bull mkt rally-legs, but GCRU guidance helps U make a lot more money via ‘surgical’ chart picking in top relative strength stocks. ●●●●  Currency moves are spectacular & the failure for the US$ to develop even a dead rat bounce is ominous. It seems the $ coffin lid has been nailed. The currency sharks will use any strength to short at higher levels so don’t be too fussy where U unload (or hedge) US$ exposure. •••• All in all a rosy picture for gold J. Keep milking the cash cow via our buy/sell/buy/sell strategy, which allows U to bank regular profits whilst riding strength & minimize draw down if sudden weakness appears. If the gold updraft gains traction, give some positions more leeway by banking smaller amounts (1/3) at profit targets, & letting profits run on the rest. But don’t forget to move stops up as prices rise, daily if necessary. Stay cool & disciplined & laugh all the way to the bank. ●●●●  Gold opened up $2.30 in Europe today but now down 60 cents. Call it unchanged. The US$ is down 10 cents. A good start to the day J. ●●●● If it’s Wednesday, its Gold Charts R Us!

 

 

Altius Minerals (TSXV: ALS); nickel/gold/uranium; CAD$:

Open trades:

Long at:         

Stop:

Profit targets:

Traders not in yet.

1-dc below 6.80.

9.38 &/or 9.95 &/or 10.56 &/or 11.20.

New Recom:

Buy at mkt &/or if dips to 8.36 &/or 8.20; stop: 1-dc below 6.80.

Comment:

Broke above 7-month bullish ascending triangle on rising volume; theoretical upside target is: 11.20. Spinner bull cue. Elements in place for sustained rally leg.

 

Hecla Mining (NYSE: HL); silver/gold; US$:

Open trades:

Long at:         

Stop:

Profit targets:

Traders not in yet.

1-dec below 5.70.

7.98 &/or 8.90 &/or 9.85.

New Recom:

Risk-takers buy bit at 7.10-stop; stop: 1-dc below 5.70. And/or all buy big on 2-dc (or decisive rise/close) over 7.10.

Comment:

Potential 8-month bullish reverse H&S base; theoretical upside target is: 9.85. Spinner bull cue. On starting blocks.

 

 


IN THIS ISSUE

 

 

 

Agnico (NYSE & Tor)

9

Altius Minerals (Tor)

10

Anglo American (Nas)

10

Aurizon Mines (Tor & AMEX)

11

Freeport Mcmoran (NYSE)

11

Fronteer Development (Tor)

18

Gold daily (NY)

6

Gold tick chart (NY)

7

Goldcorp (NYSE & Tor)

12

Hecla Mining (NYSE)

12

High River Gold (Tor)

13

Int'l Secs (NYSE)

21

Lihir (Sydney & Nas)

13

Mega Uranium (Tor)

19

Miramar Mng (AMEX & Tor)

14

Paladin Res. (Tor & Sydney)

19

Rio Tinto (NYSE)

14

Seabridge Gold (AMEX & Tor)

15

SGI

8

SGS (A/D line)

8

Teck Cominco (Toronto)

15

TREND INVESTORS

20

USD (NYBOT)

9

Viceroy Explor. (Tor)

16

Xstrata Plc (London & Zurich)

16

Yamana Gold (AMEX & Tor)

17

 

To read the entire issue, click here!