The 60 and 135 minute charts have enough divergences to support a rally attempt as well. Any turnaround has about 1230 as the maximum upside limit. The Tricks Index shown yesterday argues against a ‘final’ low here, so I’m more inclined to look for a bounce now and then a retest a little later. Heck, it’s only mid September with all of October still in front of us.
I hope people saw my gold comments yesterday morning published when the metal basis the December future was at 816. It’s at 883 now! In past panics, U.S. treasury securities have always been the go-to safe haven. That baton seems to have passed to gold. I think this will be seen as a watershed event when viewed with historical perspective in the future.
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click chart to enlarge
click chart to enlarge
2 responses so far ↓
1 muellerjoerg // Sep 18, 2008 at 1:23 pm
Chris,
What do you mean by “watershed” event? Do you think that gold/silver will be viewed as the safe haven and not bonds going forward? How does that go together with deflation?
Thanks, Joe
2 deuxsous // Sep 18, 2008 at 5:21 pm
Christopher,
I totally agree with you on the “watershed” in rates. The apparent failed re-test of the 2003 long bond rate bottom this week–I’ll feel even more sure if we we close above that rate tomorrow–”guarantees” higher rates for some years. This has been the missing piece of the so-called Greenspan conundrum. Gold is indeed confirming its role for this up cycle.
Nevertheless I don’t expect a rapid return to the parabola up. Credit will be tighter for some time, and private investors have been frightened as they were in 1987. Fear and the end of parabolas take time to unwind and for people to forget how it felt and then to recharge their animal spirits.
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