This is from another board, let us ( hope) GWGO will time there move.
chevy56
Posted by: muleofkintire
In reply to: None Date:3/19/2007 2:49:06 PM
Post #of 21923
full report with link.
'But in reality, due to various technical and fundamental factors, gold and gold stocks are actually in a better position to move up now than they were six weeks ago.'
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'Gold stocks tend to lead the action in the metal. That means when gold stocks outperform the price of gold it is bullish for both but when gold (the metal) outperforms gold stocks it is often a warning that the rally is not going to last. We just saw this happen in February. Gold stocks didn't go up faster than the metal during this rally and, not surprisingly, a dip was the result. I thought we were going to pause a bit, but not drop as much as we did, But I can see the reasons why.
During the previous three major periods of consolidation in the gold market gold stocks lagged the metal. You can see this in the downward plot of the XAU/gld ratio in the above chart. However, once this condition came to an end and the XAU/gld ratio broke out of its downtrend resistance lines, new bull runs in the gold market began that led to riches for gold and gold stocks investors.
I'm expecting a rally over the next few weeks. One that will take the XAU up to its upper 200-day bollinger band. If that rally is accompanied with the XAU/gld ratio trending up to its downward resistance trendline then I will take this as confirmation that a new bull run is right around the corner. Once the XAU gets up to the 150 area I'd expect it to pause for a few weeks. This should be the final calm before the big move and it is during this time that I'd expect the XAU/gld ratio to breakout and give a major intermediate-term buy signal.'
