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Friday, February 8, 2013

Gorilla Still Pushing Around Gold

The 800lb gorilla continues to wreck havoc on the trading floor.  Early and late morning "displays" (price attacks) reflect him pounding his chest to maximize fear.

Yet despite these impressive displays, signs of fatigue have emerged.  The 13ema WA has fallen below 20% (chart 1). This indicates downside concentration. Also, the window of opportunity (TIME) for the B-wave consolidation is beginning to close.

The shrinking ranks of paper longs, highly fragmented and fearful, are still no match for the organized gorilla.  This setup could push the 13ema WA as low as 0%, so patience is still required.

A big surge in gold's DI towards or above 60%, however, turns patience into action (chart 2).

Chart 1: London PM Fixed Gold and GLD (ETF) Total Assets WA Stochastic Exponential Moving Average (13DEMA)


Chart 2:  Gold London P.M Fixed and Gold Diffusion Index (DI)



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