- OCT 6, 2010
Currency Alerts Suggest An Interim High in Gold Soon
Posted Oct 8, 2010
Both Friday and Tuesday generated downside Capitulation Alerts in the US Dollar Index and
upside Exhaustion Alerts in the Euro. In the eleven instances (dating back to 1975) where gold
was trending higher, above a rising 200-day moving average, and the US Dollar Index generated
a downside Capitulation Alert the bullion made an interim top shortly thereafter. The number of
days and percentage that gold moved higher following the alert had a direct correlation with the
depth of the correction. No rally extended more than eight trading days (Oct 13th?). Once the
top was in place the drop to the 50-day moving average occurred within 14 trading days. The
moving average sits at $1262 and is rising at $3 per day.
(Click on images to enlarge)
Capitulation Alerts in the US Dollar resulted in the following gold action
Other points of interest
- The summer consolidation produced a measured target range of $1330 to $1350, suggesting
that any price action beyond here would be into a blow off phase as most recently seen in
- Gold has moved out of the steady upward channel from the August bottom and has now
entered the exponential phase, generally seen in the final stages of rallies.
- Gold is now ten weeks into the rally since generating the first higher weekly low on August
6th. Uninterrupted rallies tend to last nine to twelve weeks.
- A weekly Sequential Sell Setup is occurring this week in gold. A price high within the
following week generally produces a decline to the 34-day ema.
- Daily Sequential Buy Setups are in place in the US Dollar and Sell Setups in the Euro.
Reversals can be expected any time and will be confirmed with moves through Monday’s
high in the Dollar and low in the Euro.
The percentage appreciation after the US Dollar Alerts is noted
Oct 6, 2010
in this report are solely those of the author. The information
herein was obtained from various sources; however we do not guarantee
its accuracy or completeness. This research report is prepared
for general circulation and is circulated for general information
only. It does not have regard to the specific investment objectives,
financial situation and the particular needs of any specific person
who may receive this report. Investors should seek financial advice
regarding the appropriateness of investing in any securities or
investment strategies discussed or recommended in this report
and should understand that statements regarding future prospects
may not be realized.
Investors should note that income from such
securities, if any, may fluctuate and that each security's price
or value may rise or fall. Accordingly, investors may receive
back less than originally invested. Past performance is not necessarily
a guide to future performance. Neither the information nor any opinion expressed constitutes
an offer to buy or sell any securities or options or futures contracts.
Foreign currency rates of exchange may adversely affect the value,
price or income of any security or related investment mentioned
in this report. In addition, investors in securities such as ADRs,
whose values are influenced by the currency of the underlying
security, effectively assume currency risk. Moreover, from time to time, members of the Institutional Advisors team may be long or short positions discussed in our publications.