Metals Are Parked In Neutral - Miners Rebound
I decide that today I would only post the Technical Charts to illustrate how remarkably orderly the markets are sometimes.
The Blue lines at the top and the bottom are called Bollinger Bands which is based upon an algorithm designed to keep the market trading range. In short for 95% of the time the market will trade within the Bollinger Bands.
The Blue line in the Center is the 18 day moving average which is essentially the NEUTRAL zone. Above the 18 day moving average is bullish, and below the 18 day moving average is bearish.
Now lets take a look at the charts. First up is GOLD.
Gold ended the session where?
How about $1956.35 per ounce versus the 18 day moving average of $1956.04. The stochastics are positive so lets see if tomorrow the BULLS can move out of NEUTRAL. If so the first area of resistance is the upper Bollinger Band at $2002.21 per ounce. If the Bears return then look for $1910.69 to be the support area.
Notice how yesterday GOLD traded down almost touching the lower Bollinger Band and then bounce right off of it.
For weeks I have been mentioning that the metals were trading in a more narrow trading range. Notice how the Bollinger Bands are coming together in a more narrow zone.
Why is that important?
From narrow ranges come big moves! The question is as always which way the market breaks.
Silver, after yesterday's action made it back fairly close to the 18 day moving average closing at $27.23 per ounce versus the 18 day moving average of $27.33. The HIGH of the day came in at $27.31 just 2 cents off the 18 day moving average.
The MINERS were slightly different.
Having touched the lower Bollinger Band yesterday, GDX burst well above the 18 day moving average.
If the Bulls are in control tomorrow then $43.08, the upper Bollinger band is resistance and the 18 day moving average is support.
As with the metals, GDX is trading in a more narrow band.
No real direction either way at this point although yesterday's action still makes me go HMMMMMM.
Until the market gives a clear signal CAUTION remains the word of the day.
Peace out and Stack On!
