Technical observations of RossClark@shaw.ca
It goes without saying that the volatility in the markets is at levels not seen in decades. In the case of the gold market the slide to $740 on September 11th generated short term oversold buy alerts that we assumed would give an immediate lift back towards immediate resistance at $795 to $810. However, the move straight through to $915 without any hesitation created a pattern we have previously identified and labeled as isolated lows.
The RSI(14) is into overbought territory so look for a quick two to four day correction followed by a churning market. The midpoint of the August 11th to September 8th consolidation ($815) is the critical support over the coming months.
Isolated lows identified with red box. Subsequent midpoint support identified with Blue line.
(Click on images to enlarge)
CHARTWORKS - SEPTEMBER 25, 2008
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