Thursday, April 16, 2009

Chart Talk: Gold

I'm no chartmeister [but you play one on the internet? -ed], preferring the "Low I.Q. Approach" [which you've refined to .999 purity -ed], something that drives dyed-in-the-wool technicians* crazy. I can talk the lingo in very short bursts, at great effort. Here goes:

Gold double-top setting up test of $800 support, if the nascent head-and-shoulders should form, a retest of the October 26, 2008 spike low of $681 is possible.
Whew. I won't be doing that for a while, I think I hurt myself.
Here's the one year chart from Kitco:

See also: "Hey Gang, Is That a Double Top in Gold?"

*I am reminded of the analyst I mentioned in early February:
It's all about money flows. (and information asymmetries)
Some years ago I knew a retired analyst who had been able to make a meagre living by tracking the flow of funds in smaller western U.S. equity markets, Spokane, Salt Lake City, Denver, etc.

He was insane by the time I met him.

He'd made up his own language to describe what he was doing, the gist being that it is the marginal dollar going into (or coming out of) a market that makes the move.

His problem, well two actually, was that:
a) no one knew what the heck he was talking about and
b) there wasn't enough data to really capitalize on what he had been trying to do....
Here's Kitco's daily chart for Oct. 26, 2008, you can see that AU was only under $690 for a couple hours and actually closed up on the day:

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