However, the expected intermediate-term correction has been taking on an increasingly more serious appearance.
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The big rally, however, leaves the gold contract vulnerable to modest backing and filling or correction very short term.
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So did U.S. and European markets top out mid-February into an intermediate-term correction, or was it just a five-week pullback?
Big declines in both the yen and crude oil may be giving the market a sneak peek at a near-term correction.
Rallying for six days in a row, towards the upper limit of its trade range with low volume, Wall Street is ripe for a short-term correction.
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As such, the real test of the strength and longevity of this recent rally will not come from the first short-term correction of a few percentage points, for buyers will show up on these first forays down.
That signals a short-term top in the gold market and modest correction and or consolidation near term.
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This allows for a further correction within the positive intermediate-term trend.
In market corrections it periodically becomes short-term oversold and rallies back up some to alleviate the short-term oversold condition before the correction resumes.
After losing big time in the 2007-2009 bear market, and short-term in the current market correction, they are under pressure from their investors to take less risk.
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The near- and intermediate-term technical trends are bearish, but the market is overextended on the downside in the very short term, which leaves gold vulnerable to near-term consolidation and or modest upside correction.
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However, it is also very probable that the correction would have been shorter and the long-term economic trend more healthy.
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So summing up, the short-term oversold condition makes a short-term rally likely, but with the correction likely to resume to lower lows when it ends.
In the month since the stock reached new, 52-week highs, the stock pulled back to retrace about 25% of its August-July run as part of a five-day correction that took shares of NLS into short-term oversold territory.
The short-term technical outlook and increasing volume suggests the correction is over but are there any new opportunities for investors or traders?
When October 16 arrived, short-term MACD was on a sell signal indicating a correction was underway.
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This, in our view, would represent an intermediate-term top, with a 10% to 15% correction during the second half.
My long-term outlook for the commodity markets still suggests that this correction will be a buying opportunity, but not until we see prices bottom out.
The daily OBV has completed its correction by moving above its previous highs, and has held long-term support (line e).
Stocks still look more attractive than bonds on a long-term basis, except perhaps not this week, as a correction may be in store.
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Using a model that ties house prices to disposable incomes and long-term interest rates, analysts at Goldman Sachs reckon that the correction in national house prices is only halfway through.
The OBV broke its short-term downtrend in early November, line c, suggesting that the correction was over.
In March 2009 we had a bear market correction based upon cheap equity valuations, oversold technicals, and a long-term up trend with help from Fibonacci, the thirteenth century mathematician.
The gold market bulls can take solace in the fact that no longer-term chart damage has occurred, and from a longer-term perspective, the recent sell off is just one more downside correction in a price trend that remains solidly up.
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But of course for that positive for gold to be a factor, that it tends to move opposite to the stock market in its long-term moves, the stock market would have to go into another correction, extending its secular bear market.
The current downturn, correction, whatever, is an opportunity to add to the large, long-term, solid dividend payers in my portfolio at cheap prices.
Even the largest and strongest stock market of Europe, Germany, which had been making new highs right along with the Dow, has been in a correction over the last few weeks, now down 7%, with short-term support levels broken and looking like more downside ahead.
While the mid-term trend is still up, this increases the odds of a deeper overall correction.
Though it is still much too early, I will watch to see if any short-term positive divergences are formed that will help us identify the end of the correction.
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