Blog

July 27, 2009 – I have updated the same chart of the Dow Jones Industrials Average presented in recent letters, but also made an important change by re-drawing the red line that had been marking overhead resistance. Please take a close look at the following chart. It is clear that the red line has becomeRead more

July 25, 2009 – The XAU Index is again testing overhead resistance at the 152-154 area, which has been discussed many times recently.  Like gold, the XAU Index may also do some ‘backing & filling’ over the next few weeks.  But the trend remains up.

July 13, 2009 – The chart below  presenting total US employment over the past twenty years was prepared by the Economic Policy Institute. The EPI is a Washington-based think tank that focuses upon the interests of low- and middle-income workers, with particular reference to their economic condition. This chart and an accompanying article about theRead more

Silver (and gold) have been pushed into an extremely oversold condition. Silver, for example, has dropped on 7 of the last 9 trading days, declining 10.5% during this period. That is extreme selling pressure.

Gold has been pushed into an extremely oversold condition. Fortunately though, and quite remarkably given this relentless selling pressure, little damage has been done to its chart. So while gold  dipped back deeper than I expected, I think the worst is over and further, it looks like both precious metals (gold and silver) will bounceRead more

July 13, 2009 – The countertrend rally in the price of long-term government paper is probably over. The reality of too much federal government debt that needs to be borrowed is about to overwhelm the debt markets and send yields higher. The 30-year T-bond is already showing signs of weakness. It is only a matterRead more

Beginning in April, the dollar fell pretty much in a straight line into early June. Since then the US Dollar Index has moved sideways on either side of 80, and it has clearly demonstrated an inability to rally, which is a sure sign of underlying weakness. It is also a good indication that the next major move for the dollar in all likelihood will be down.

I noted in the last commentary, the importance of resistance for the gold/silver ratio at 69. I even drew a red horizontal line at that level, which can be seen again on the accompanying chart. I also warned: “We simply have to stay alert for the possibility of a deeper correction.”

The DJIA could not climb above its 200-day moving average and has now slipped back below overhead resistance (the horizontal red line on the chart). The Dow looks oversold and could bounce, but for now, the trend is pointing lower.

July 10, 2009 – As is clear from the following chart, we can see that there was some technical damage to the XAU Gold Mining Index.  After finally climbing above the key resistance level around 134, the XAU dropped once again into the high 120s.  This outcome is of course disappointing, but the technical damageRead more