Hourly Action In Gold From Trader Dan
Posted: Jun 11 2010 By: Dan Norcini Post Edited: June 11, 2010 at 1:58 pm
Filed under: Trader Dan Norcini
Dear Friends,
Dismal retail sales were apparently shrugged off by the equity markets today as they seem reluctant to move much lower after yesterday’s decent performance. What is happening is that would-be short sellers in the equities are coming in on weakness expecting follow through to the downside and instead are getting squeezed out and shredded to pieces in the process. There is just enough wavering of conviction among these shorts that the market will not take out downside support below 1050 in the S&P. They are sick and tired of getting burned and having to cover as they watch profits turn into losses. I find the inability of the S&P to break down mighty suspicious I might add.
Either way, that is bringing a bit of selling into gold as safe haven allure dims a bit; however, the fact that the Euro is weak alongside the other major currencies, is lending support to gold on dips. What we have is a classic setup for a consolidating market where bullish forces and bearish forces for the near term are in a relative state of equilibrium. I say “relative” because as I mentioned yesterday, today’s markets have become schizophrenic in nature with fear giving rise to greed and back to fear and then back to greed so rapidly that it is difficult to gauge the true psychology of any market with any degree of confidence on a day to day basis. One day risk is in; the next it is out. On a day like today, it seems to be both in and out. Traders are running so fast that the short term charts are almost useless for formulating any sound views of what is coming next. The longer term charts are much better during periods like this as at least you can see the major trend. When it comes to gold, that remains strongly bullish.
The HUI will need a closing push above this week’s high near 470 to get anything going in there to the upside. As long as it stays above 440 on a closing basis it will range trade. A drop below that targets a move down towards 425 while a push through resistance at 470 sets it up for a move towards 480-482.
The Dollar continues to hover near the 88 level on the USDX. A drop through this week’s low should send it to 86.25 while it needs a closing push through the recent peak at 89.10 to send it into another leg higher. The Euro will need to maintain its footing above 11900 to keep from dropping down towards 11700.
DAN'S CHART:
http://jsmineset.com/wp-content/uploads/2010/06/June1110Gold.pdf
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