End of Day Note: A Strange Absence Amidst a $200 Rally
Triples do not last
There is no Gold research coming from the big boys after an almost $200 rally in 2 weeks. Fancy that…
We think1 that is because they are all buying it. Which, if we are right, is because they will all be recommending it in their EOY notes.
In a business as usual environment, the fresh buying next month runs into these buyers taking profits in the first week in January.
Other than Middle East Peace breaking out or a deflationary crisis, we don’t see how Gold does not at least test ATHs of 2089.20 on the continuous monthly chart attached.
***NOTE: IT IS HAZARDOUS TO SEE THIS AS PREDICTING ANYTHING BUT BEHAVIOR. Price is harder to predict than behavior.****
Rules for Technical and FlowTrading: “Triples do not last”
Triple tops are made to be broken. This means, the 4th time up will create a *new* high historically in almost all markets. Before you get crazy… that means the high is taken out. Which we expect to happen if recomendations are sent out by banks in acouple weeks.
Everybody tyalks about Monthly Highs… Monthly Closes may matter more now…
We also believe there are buy stops above this area.. in fact we are pretty sure of it.
The question that remains is:
How aggressively will the current batch of longs be in taking profits if that high is breached and those longs take profits. Wil lthey let it breathe, or will they stomp on it.
Remember the other rule:
Funds detrmine direction, Banks determine magnitude of the move. If they step in front for any reason at all, that will stop it cold at least temporarily. if they let it breathe, heaven help the shorts…
All that said: This is not business as usual. The battle has only just begun
Bonus:
Hartnett: The main focus is: He has a contrarian signal to buy stocks and lays it all out.
3 out of 4 trading rules currently give contrarian "buy signal"…
Gold: He likes Bullion as stocks drop and Bonds rally.
The other focus is the boom in spending and how it creates a big nominal GDP, but not a very productive one
"Populists want to spend more money & the "unpopulists" want to spend even more"…
RaboBank: Daily