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Yesterday we had a nice breakout in gold.
A similar but a more pronounced breakout took place in the Phil. XAU index. We broke the valley (B)in a medium term Double Bottom (Points A and B). this break has a minimum potential (in the D. Bottom) of reaching 77. Where we also reach a trendline going back to april 88. This is also a 200% retracement of wave C of 2 as well as the all important 78.6% retracement of wave 2 which is the last outpost if we are still in a bearmarket. If so we should turn lower from that area.
A break of that level, however, is VERY significant!
Given the elliotwave interpretation in enclosed gif, you could argue that we are in an impulse move. Especially since we yesterday broke an UP channel (even broadening!) on the upside. In my world, that's POWER.
which suports my Elliotwave count where we now should be in wave 3 of (3) - the most powerful of all waves.
If Arch Crawfords prediction comes true, this could actually be a correct interpretation....
An interesting point, is that the breakout came on the day of the solar eclipse - which by some astrrologers is a sign that the occurence will have an effect for, at least, a couple of months.
(Off subject (almost..) a danish astrologer (with a very good trackrecord) was interviewed in a daily newspaper and he gave an odd example of the effects in time by solar eclipses: Karl Marx was born on the day of a solar eclipse and tracking the way, over the globe, and the countries it touched - all became communist states - a solar eclips effect that has started to decline first in recent years.)
(I guess this is the part of my goldstock comment that will fill most of the list for a while.....)
Well, speaking of effects, I am not expecting such a long bullmarket, but given the seasonallity shown in my last post, we should at least se rising prices into the end of september.
Of the handful goldstocks I follow, Newmont Mining is a mirror picture if the XAU index,(now at the 50% retracement level of the recent decline (W:2)
Placer Dome is in a small uptrend channel after a downside failure brae of the 78.6% support, indicating a powerful upmove.
Hecla mining is my favorite with an upside break of a falling wedge at 2.40 and a potential in the Wedge of 7! This stock has had a positive or flat On Balance volume for years, in spite of falling prices (indicating "smart money" buying), supporting a really strong move when (if) gold get's going.
Homestake Mining also broke (on large volume!) a One year long trendline yesterday, after a downside failure break of a falling wedge and previous bottom, indication also powerful moves ahead.(several previous bottom resistances has also been passed on the way, leaving least way of resistance, to be UP)
for the more adventurous we had a minor break out in (the Penny stock) Bema gold at 44/64. this stock has had an almost 2 year long bottom formation and could be quite risaky, but look at the volume pattern: Large volume at the selloff in AprJul 1997 and the accumulation from June this year! Great potential in that one (if you can stomach the risk...)
Battle Mountain, has not yet broken out, but has had very promissing volume characteristic the last month.
The stock charts can be picked up almost anywhere on the Net so I won't clog the list with them but please take a look at the goldman sach index were we had a break on the "wrong" side of the Wedge. I think this development to be a good example of what can happen when we see such a break.
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