NASDAQ_400
04-16-2003, 04:03 AM
How about gold?
Richard Russell
Dow Theory Letters
April 16, 2003
Extracted from the 15 April 2003 issue of Richard Russell's Dow TheoryRemarks
Gold -- How about gold? I continue to believe that gold is going through basing action, and it's been very laborious action so far. June gold (the active contract is June) hit a closing low of 322.20 on April 7. Since then it's been trying climb out of that low area. I note that gold closed higher than its opening on seven of the last eight days, and that's a mild plus suggesting quiet accumulation.
On my MACD chart gold is in an oversold area, and the MACD studies are beginningto turn bullish. The stochastics are also turning positive.
The 200-day moving average for June gold stands at 331.18, and that would be the first upside target for the yellow metal.
HUI, the unhedged gold average, is looking quite strong, and has formed an ascending triangle just under its 200-day MA. The 200-day MA for HUI stands at 126.10, while HUI as I write is trading at 124.33. A close by HUI above 126.10 would be very constructive for gold. Let's see if it happens.
So there are an unusual number of "ifs" in this market, including:
"if the Dow can better its March 21 high,
and if gold can better 331
and if bonds can hold above their recent lows.
And let's not forget the Dollar Index, which has dropped below its 200-day moving average, so if the Dollar can hold --- ?"
As far as the US economy is concerned, there are a carload of stories, but one that came out today was that industrial production was down .5 percent in March. Furthermore, plant use in the US is down to 74.8%. Inventories are rising, and more stuff is being piled up than is being sold. But that doesn't seem to be worrying the market. After all, the stores can offer the excess stuff at half-price with nothing down and no interest to be paid for the next three years.
Or at worst, the Fed could pay you to take the stuff, no charge, and cart it away to pile it up in your garage for maybe future use.
More follows for subscribers. . .
Richard Russell
Apr 16, 2003
Dow Theory Letters
© Copyright 2003 Dow Theory Letters, Inc
Richard Russell
Dow Theory Letters
April 16, 2003
Extracted from the 15 April 2003 issue of Richard Russell's Dow TheoryRemarks
Gold -- How about gold? I continue to believe that gold is going through basing action, and it's been very laborious action so far. June gold (the active contract is June) hit a closing low of 322.20 on April 7. Since then it's been trying climb out of that low area. I note that gold closed higher than its opening on seven of the last eight days, and that's a mild plus suggesting quiet accumulation.
On my MACD chart gold is in an oversold area, and the MACD studies are beginningto turn bullish. The stochastics are also turning positive.
The 200-day moving average for June gold stands at 331.18, and that would be the first upside target for the yellow metal.
HUI, the unhedged gold average, is looking quite strong, and has formed an ascending triangle just under its 200-day MA. The 200-day MA for HUI stands at 126.10, while HUI as I write is trading at 124.33. A close by HUI above 126.10 would be very constructive for gold. Let's see if it happens.
So there are an unusual number of "ifs" in this market, including:
"if the Dow can better its March 21 high,
and if gold can better 331
and if bonds can hold above their recent lows.
And let's not forget the Dollar Index, which has dropped below its 200-day moving average, so if the Dollar can hold --- ?"
As far as the US economy is concerned, there are a carload of stories, but one that came out today was that industrial production was down .5 percent in March. Furthermore, plant use in the US is down to 74.8%. Inventories are rising, and more stuff is being piled up than is being sold. But that doesn't seem to be worrying the market. After all, the stores can offer the excess stuff at half-price with nothing down and no interest to be paid for the next three years.
Or at worst, the Fed could pay you to take the stuff, no charge, and cart it away to pile it up in your garage for maybe future use.
More follows for subscribers. . .
Richard Russell
Apr 16, 2003
Dow Theory Letters
© Copyright 2003 Dow Theory Letters, Inc