Fibonacci: Gold Stocks Thermometer
by Morris Hubbartt
& Bond Synergy Chart
The US Bond
market is a debt market. Evaluating the US bond from a fundamental
view point shows there are several things that make the US bond
a long term investment to avoid.
is being diluted by the Federal Reserves quantitative easing
programs. Upon maturity, bond investors are set to be paid with
a currency worth much less than when the bond was issued.
seem to be hopelessly addicted to spending money. The debt in the
United States is now nearing $16 trillion, which is an amount too
large to be honestly repaid.
is now growing by roughly $1 trillion every year. It overwhelms
GDP growth. For every dollar collected in tax revenue, an additional
dollar is being borrowed. Higher taxes cant fix the economy.
They will slow it down and create even bigger deficits.
From a technical
stand point, the bond is overbought, yet it could become even more
The gold &
bond synergy chart that I am highlighting this week shows how the
bonds price action can signal the end of a gold market correction.
Note the bullish
rectangle technical pattern on gold in 2008, and how similar that
is to todays market. When bond prices are substantially extended,
as they seem to be now, gold can begin a big move higher.
a creditor and buy debt you probably cant collect on, when
you can buy gold instead?
Triangle Trigger Chart
to be completing its correction. A triangle formation is very bullish,
and the MACD indicator at the bottom of this chart will likely be
the trigger that shoots the gold bullet up and out of this triangle.
price pattern is most prominent on the weekly chart, it carries
more technical weight than if it only appeared on a
Fibonacci retracement line of the move from about $1309 to $1923
has been the main support for gold at the lows of this correction.
Substantial commercial buying has occurred each time the price has
declined towards $1544.
of the Slow Stokes and the CCI indicator are also bullish.
Major Bottom Chart
stocks are arguably now leading the precious metals sector. GDX
is doing battle at the important Fibonacci 38% bull market retracement
level. The number I have been watching closely is $47.25.
As of today,
we have now had three closes above that level. The three
day close is an event which confirms technical strength.
My work targets $53.50-$55.
A move above
$48.50, if it comes on strong volume, would be further confirmation
of a new bull phase.
the rest of the article
© 2012 321 Gold