Gold: Switch Off Your Targeting Computer
April 13th, 2007WARNING: This is not a recommendation to buy, sell or hold any financial instrument.
I don’t like calling the action in the pits of the most diabolical casino that the world has ever seen, but I’m being forced to pay attention to this. I’m just trying to hold on to as much of the little bit of money that Becky and I have been able to save.
What happened as the U.S. dollar sold off (again) today? Gold gapped down, but then what happened? Gold came right back. This nonsense might be institutions dumping their gold bets to cover their losses on funny money trades involving the U.S. dollar. The immediate bounce back in gold might indicate that there is substantial accumulation interest lurking just below the market. Shaking the apple tree is resulting in people picking up the apples.
Pull the gold charts yourself. Do you see the triangle formed by the higher lows approaching that ominous overhead resistance?
Read about ascending triangles, if you don’t know about them already.
If you’re a gambling person, this might be good bet. (Hint: We’re all gamblers now, whether we like it or not.)
Of course, the U.S. dollar has been clobbered and may be technically oversold. While the U.S. dollar is in a descending triangle pattern now (bearish), it has also formed a creepy double bottom on weekly charts (bullish). So, what is it: a double bottom, or a descending triangle?
Let me consult my Magic 8 Ball…
My best guess is that this is not a bottoming formation on the dollar, and that the downtrend will continue. Why? The subprime mortgage paper apocalypse is spreading to “lower” risk paper in the Alt-A liar loan category. That might be bullish for the dollar is some weird Plunge Protection Team kind of way, but I doubt it otherwise. I wouldn’t be surprised if we see a fakeout bounce on the dollar before the long red candles start bleeding down computer screens everywhere.
Place your bets, boys! It’s make or break time. The Cryptogon Magic 8 Ball shorts U.S. dollars on any upside and buys gold on dips. These times are always full of fakeout moves, so there’s no point in quoting support and resistance numbers, since those will be fiddled with as part of the routine.
As usual, don’t listen to me. Switch off your targeting computer. Does the Force whisper anything in your ear as you speed through the trench at full throttle?
It’s going to be over soon, one way or the other. That’s the beauty of critical make or break points in trading.
[…] This guy’s Magic 8 Ball is saying the same thing as mine. […]
Critical support on the greenback has been broken today. We’ll see if they can get their act together and stop the slide before the mid 70’s or not.
Thanks for the interesting read.
RS
[…] in Gold: Switch Off Your Targeting Computer, I wrote: The U.S. dollar has been clobbered and may be technically oversold. While the U.S. dollar […]
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The IMF has a S%*#-load of gold. 3,217 metric tons.
Who owns the worlds gold and who controls its production?
http://www.imf.org/external/np/exr/facts/gold.htm
I need more information and as fascinating as this article is, we need better info than Rense.
http://www.rense.com/general75/wrus.htm
“Today, only five countries in the world are without a central bank: Iran, North Korea, Sudan, Cuba and Libya. All of these just happen to be on George Bush’s “Evil of Axis” list.”