The Black Box

[ItsAllCyclical]

Being long some gold issues myself (not NEM currently) just wondering if with your NEM short you've looked at gold and the US Dollar Index as well.

http://www.kitco.com/ind/Turk/aug152003.html

I pretty much agree with the above read. If you pull up a 1 year on gold the pennent is much easier to see. The breakout point looks to be around 364 currently, but I think it'll take a close above 368 to light another fire under the sector.

Gold 1-year

http://stockcharts.com/def/servlet/SC.web?c=$GOLD,uu[h,a]daclyiay[dd][pf][vc60][iUb14!La8,17,9]&...

I'm somewhat bothered by the strength of Dollar, but today gold is up with both the Euro down and the US Dollar up.

As long as gold holds above 350 the bullish scenario is still in place imho. I do think since gold stocks are way ahead of the metal that if gold does breakout the upside of many of the names will probably underperform the metal since a 1% rise in POG normally equates to a 3-4% move in shareprices.

On a rise to 400+ POG NEM could easily hit the high 40's as the market cap of the entire sector is very small. Institutional money has to go somewhere...and that's quite often NEM.