Anyone who thinks that we can sound the all-clear when it comes to the economy, please raise your hand!  Now, if you truly believe that then please send me an e-mail and explain how you have come to that conclusion because I am amazed at all of the talking heads that seem to believe that the light at the end of the tunnel is NOT a freight train coming the other way.  The equity markets seem to believe that as well.  I certainly expected a decent bear-market rally.  And that’s what we got over the last six weeks.  But , in my opinion, the longer this one goes the bigger the decline is going to be when it ends.  And that’s why I want to be LONG Gold before the cracks in the stock market dam become evident.  Gold has certainly had its problems over the last few weeks.  The April low of $865.00 seems to be a strong area of support.  With the June futures contract trading higher by about $15 today and the weakness in the stock index futures testing major support we could see a major turn of events this week.  The last time Gold closed above the Bollinger Bands moving average was on April 1st.  In case you are looking for a very good technical indicator to watch just take a daily chart of Gold and add Bollinger Bands to the chart.  The MA is a tremendous indicator for where the market is today and where it will probably head in the future.

I can trade any market with just this one indicator and have a decent chance of making money doing it.  Currently, the Bollinger Bands moving average on the daily JUNE Gold chart is just slightly above the $886 level.  Today’s intraday high is $887.10.  The market really needs to post a close above the MA to give traders and the Gold market a technically-based shot in the arm which could push the market back above $900 and then, ultimately to new all-time highs.  I know there are a lot of people out there that think that Gold is dead in the water and advocate that you sell all rallies.  I’m not one of those analysts.  They may be right but I don’t think so.  I think new highs are in the offing and that we should take this opportunity to take positions at these prices because there’s nothing more frustrating than missing the trade and having to chase prices higher.

Good trading,

Dale F. Doelling, Chief Market Analyst
info@Bullion.com
1.888.453.4614  Ext 2

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