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Gold Stock Insiders & Patience

Stewart Thomson
Mar 26, 2013

  1. Please click here now . That’s a link to a nice article published by Canada’s Globe & Mail newspaper. It shows that gold company insiders are aggressive buyers of their own stock, at current price levels.

  2. In the big picture, that’s great news for gold stock investors!

  3. Unfortunately, while long term market fundamentals and technical indicators suggest that gold offers tremendous value to investors, the daily charts of gold and related assets… seem to be presenting quite a different picture.

  4. Please click here now . You are looking at the daily T-bond chart. Quantitative easing is a big factor in this crisis. Generally speaking, as long as QE is in play, when bond prices rise, gold prices rise.

  5. So, unless the T-bond can rise above HSR at about 145, gold will likely have a very hard time making upside progress.

  6. Please click here now . That’s the daily gold chart, and I’d like you to make careful note of the position of my “stokeillator” (Stochastics 14,7,7 series).

  7. Technically, gold is beginning to become overbought, in the short term. If you make the assumption that the T-bond can make it to the 145 level, it’s reasonable to project a little higher gold price, too.

  8. That would make gold even more technically overbought than it is now, and quite vulnerable to a more substantial sell-off.

  9. A week ago, as the gold price arrived in the $1615 zone, I suggested that it had broken out upside, from a symmetrical triangle. I said that it was due to pull back, immediately, to about $1585.

  10. Gold’s rise did stop there, in that $1615 area. Yesterday it fell to $1590, and then blasted higher, to about $1608.

  11. My concern now is not that it pulled back to $1590, but how it did so. Please click here now . That’s the hourly bars gold chart, and you can see that a head & shoulders top pattern formed.

  12. The neckline has broken. To abort the pattern, and put the bulls back in control, gold needs to rise over the right shoulder high, which sits at about $1615.

  13. That hasn’t happened. Instead, gold has started a fresh decline this morning, and is doing so against the background of that overbought “stokeillator”, on the daily chart.

  14. Gold needs an immediate-term fundamental catalyst of size, to “blast” it over daily chart HSR at $1617, and $1627-$1640.

  15. There are quite a few key economic reports scheduled for release today; hopefully one of them is just what the gold doctor has ordered.

  16. Silver is also having a tough time right now, and a lot of market timers are becoming increasingly frustrated. It seems to be almost incapable of mounting a significant rally.

  17. Please click here now . Silver is trading within the boundary lines of a near-perfect symmetrical triangle.

  18. Aggressive traders should watch for a move beyond those lines, as a breakout signal.

  19. The triangle suggests that silver should either fall to the $27 area, or rise to about $31.

  20. Technically, the odds are about 67% that the break comes to the downside, but there is another technical event that needs to be considered, before you get too glum!

  21. Please click here now . That’s another look at the daily silver chart. Note the bullish wedge pattern that is forming. It’s defined by the converging blue trend lines.

  22. This wedge indicates that regardless of how the triangle pattern is resolved, a trending move to the upside is becoming much more likely.

  23. Please click here now . That’s the weekly GDXJ chart. It’s very possible that after breaking out from a huge bull wedge, junior gold stocks (and silver stocks) have simply pulled back to the supply line (in green here) of that huge wedge, and done so in a narrow drifting parallel channel. Watch the upper blue supply line for a breakout. It may hold more significance that it appears!

  24. I’m more net long gold & silver stocks that ever, and company insiders clearly are taking a similar approach, at this point in market price and time! Be aware that insider buying doesn’t necessarily translate into an immediate parabolic move to the upside. Patience continues to be the gold stock investor’s very best friend!

Mar 26, 2013
Stewart Thomson
Graceland Updates
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