[Charmin]

"The mining shares really put in a stellar day today. The HUI set a high of 349.48 before settling at 342.43, up an incredible 8.91 on the day. For the month of January, the HUI put on a staggering 65.53 points! That is a 23.7% gain in one month alone!

The XAU closed up an equally impressing 4.51 on the day at 154.19 after setting a high of 156.47. It closed up a whopping 26.16 points for the month of January for a gain of 22.2%. Yikes!

The big news of the day, if it really was big as far as anyone was really concerned, is that the Fed raised the benchmark Fed Funds rate by another 25 basis points bringing it to 4.5%. "
Tuesday, January 31, 2006, 7:42:00 PM EST
Gold and Dollar Market Summary
Author: Dan Norcini

XAU reaches old highs going back to 1987.

http://www.StockShar..._1138762857.png

[Whadda I Do Whadda I Do]

That is a good read by Dan N. at JS's site today. Talks about a consolidation pattern is as good as a correction or spike down. The mental picture I get is a stairstep pattern over the long term.
Link

[Charmin]

I should remain consistant and always think lower at the beginning of a month.. before moving on up to $800

that way it always goes up first.. lol

how about retesting demand to 540

http://www.StockShar..._1138768634.png

[bearvest]

Danger Zone:

The Gold/XAU indicator has reached extreme levels.

It's a warning signal that the re-synchronization may require a corrective decline in both the metal and the index price.

Attached image(s)

• 

[bearvest]

Charts:

Someone may be able to overlay these charts.

The initial decline on the index seems to be very impulsive (and scary).

Attached image(s)

• 
• 
• 

[traderfromhell]

While it is quite possible we reached a high of some significance today, I have chosen to hold all positions through any decline. We reached 10 Silver. We have doubled off the May lows in the XAU. We have gone up by a factor of 10 off the HUI bottom. Cramer. On second thought... Nah.

[Charmin]

Lets just call a top here and see if it comes to pass... lol

anyway.. with HUI meeting 345 area.. XAU hitting monthly tops going back to 1987.. gold at 570 and silver at 10

just maybe.. supply will enter.. not evident yet though.. and if it did.. probably things will move sideways in a trading range anyway...

[Charmin]

the 3:1 leverage in silver worked anyway...

silver went up like 12% and silver stocks up 30%

[Charmin]

I'm getting to wonder about a distribution phase after peaking in the sp500 market now.. and gold stocks been trading like stocks.. even when gold got shook out..

so there ya go.. lol

[Ander]

I think the chance is greater than 50% that yesterday marked an intermetiate term high.

[Old Habits]

BV, those are some charts that Hamilton follows quite closely as does Saville if I remember correctly. They definitely look ominous.

The difference this time may be the demand picture. That being said a correction is prolly in order, the question is how deep and how long?

If it is a vicious spike down over a week or so I'm going to start adding, if it is a slow bleed, then sidelines for awhile.

Then again, it could stay overbought a while longer or consolidate as Norcini says to correct the overbought situation.

If we do correct, I think the bigger names take the brunt.

One thing though, there has been serious volume coming in across the board in these stocks. I'll be watching the volumes on any decline very closely.

[Old Habits]

One more macro note. Obviously, the U.S. economy is slowing. The fact that the Fed is saying we're just about done, could give a temporary boost to markets but I kinda doubt it.

I would think the markets read this as "recession coming". I've noticed the 2 year and the 10 yr are back to the same yield after the 10 year was mildly higher for a few days. I expect the 10 year will invert in the next week or two.

Feb. might not be so good for the broads or the dollar. JMHO.

According to Mauldin - avg. market declines during recessions are 43%

[Charmin]

I wouldn't call anything unless I saw silver break back under the 9.20 area...

8.50 would be a gift probably never to be seen again..

[Hanky]

Bearvest,

Good observation on Gold/XAU but I believe we are entering a "wonder to behold" bull market here and just as PE ratios made no difference in the 90's tech boom, the mining shares may substantially decouple from POG as the crowd piles in.

Here is another ratio chart that to me has very interesting implications.
Gold:Industrial Metals
This latest rally in gold has not even been keeping pace with the inflation of
industrial metals! The first run up form 2000-2003 it did outperform them indicating in my opinion a "currency and safety premium" being priced in as well as inflationary run up. Could we still be in for the grand third of a third where this again becomes added into buyers motivations.

Gold:SP another important one to watch for the mo mo crowd (Cramer et al)
starts piling in...just starting to eeeek out. Lately I am seeing more reason the broads may be putting in a top here but not quite ready to try calling it again,
my HOM indicator is still on a buy and has a great track record.

Best to All,
Hank

Attached image(s)

• 
• 

[anjing bau]

Charmin, on Feb 1 2006, 01:40 AM, said:

I'm getting to wonder about a distribution phase after peaking in the sp500 market now..  and gold stocks been trading like stocks.. even when gold got shook out..

so there ya go.. lol

<{POST_SNAPBACK}>

QQQQ on the daily looks like a head and shoulders..... watch for a neckline break at say 41.00 ish......there was a two week tech rally to start the new year that looks like it has fizzled out......Jan 11 th is the high water mark and the recent rally has come up short of that mark

Looking at a decade chart monthly time frame you will see that 75 % of the time there is a rally from Nov to Jan... a seasonlaity to the tech space.... looks like the tech space has played true to form these past 3 months.

Seasonal trade now is in the WCSB ( Western Canadian Sedimentary Basin)stocks...... Feb to May...