Keep on sowing your seed, for you never know which will grow -- perhaps it all will.
Albert Einstein,1879-1955, German-born American Physicist
The dollar has rallied very strongly easily taking out the lower end of the targets we projected several months ago. It almost closed above 81 on a monthly basis. Had it done this, it would have made the outlook even more bullish. The dollar has gone on to put in series of new 9 month highs and thus by contrast one would have expected Gold and the other precious metals to do the opposite. However, this has not taken place.
If we look at the chart of Gold, we see that while Gold went to put in a 9 month new high, Gold did not even put in a 4 month low. This is a very strong development and suggests that there is a very good chance that Gold could rally to the 1170-1200 range before pulling back. On the longer time frames, Gold flashed several strong intra market negative divergence signals; the most important two are mentioned below. .
The most impressive metal, however, is Palladium. The massive rally in the dollar has had almost no impact on the price of Palladium; it is still trading very close to its highs. If the precious metal's sector continues to hold up like this, one can expect it to literally explode upwards once the dollar rally fizzles out. From late 2008 to early 2009, when no one was paying attention to Palladium, we were strongly pounding the table on it. Palladium turned out to be the top performing precious metal last year and is still holding up a lot better than the rest.
About the Author's Newsletter
At the Tactical Investor we combine Mass Psychology (analyses of the mass mindset) , Technical Analysis (Multi time frame analysis, standard deviation analysis, inter market and intra market positive divergence studies, phase shift analysis, Esoteric Cycles and several of our key proprietary market timing indicators.) to prevent us from being…...read more
Sol Palha is a self-taught Student of the Markets, having widely read conventional and non-conventional texts on all aspects of technical analysis and market timing. He has been studying the markets for over 16 years. He specializes in mass psychology, technical ana…
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