Best of the Week
Most Popular
1. TESLA! Cathy Wood ARK Funds Bubble BURSTS! - 12th May 21
2.Stock Market Entering Early Summer Correction Trend Forecast - 10th May 21
3.GOLD GDX, HUI Stocks - Will Paradise Turn into a Dystopia? - 11th May 21
4.Crypto Bubble Bursts! Nicehash Suspends Coinbase Withdrawals, Bitcoin, Ethereum Bear Market Begins - 16th May 21
5.Crypto Bubble BURSTS! BTC, ETH, XRP CRASH! NiceHash Seizes Funds on Account Halting ALL Withdrawals! - 19th May 21
6.Cathy Wood Ark Invest Funds Bubble BURSTS! ARKK, ARKG, Tesla Entering Severe Bear Market - 13th May 21
7.Stock Market - Should You Be In Cash Right Now? - 17th May 21
8.Gold to Benefit from Mounting US Debt Pile - 14th May 21
9.Coronavius Covid-19 in Italy in August 2019! - 13th May 21
10.How to Invest in HIGH RISK Tech Stocks for 2021 and Beyond - Part 2 of 2 - 18th May 21
Last 7 days
US Economy and Stock Market Addicted to Deficit Spending - 17th Oct 21
The Gold Price And Inflation - 17th Oct 21
Went Long the Crude Oil? Beware of the Headwinds Ahead… - 17th Oct 21
Watch These Next-gen Cloud Computing Stocks - 17th Oct 21
Overclockers UK Custom Built PC 1 YEAR Use Review Verdict - Does it Still Work? - 16th Oct 21
Altonville Mine Tours Maze at Alton Towers Scarefest 2021 - 16th Oct 21
How to Protect Your Self From a Stock Market CRASH / Bear Market? - 14th Oct 21
The Only way to Crush Inflation (not stocks) - 14th Oct 21
Why "Losses Are the Norm" in the Stock Market - 14th Oct 21
Sub Species Castle Maze at Alton Towers Scarefest 2021 - 14th Oct 21
Which Wallet is Best for Storing NFTs? - 14th Oct 21
Ailing UK Pound Has Global Effects - 14th Oct 21
How to Get 6 Years Life Out of Your Overclocked PC System, Optimum GPU, CPU and MB Performance - 13th Oct 21
The Demand Shock of 2022 - 12th Oct 21
4 Reasons Why NFTs Could Be The Future - 12th Oct 21
Crimex Silver: Murder Most Foul - 12th Oct 21
Bitcoin Rockets In Preparation For Liftoff To $100,000 - 12th Oct 21
INTEL Tech Stock to the MOON! INTC 2000 vs 2021 Market Bubble WARNING - 11th Oct 21
AI Stocks Portfolio Buying and Selling Levels Going Into Market Correction - 11th Oct 21
Stock Market Wall of Worry Meets NFPs - 11th Oct 21
Stock Market Intermediate Correction Continues - 11th Oct 21
China / US Stock Markets Divergence - 10th Oct 21
Can US Save Taiwan From China? Taiwan Strait Naval Battle - PLA vs 7th Fleet War Game Simulation - 10th Oct 21
Gold Price Outlook: The Inflation Chasm Between Europe and the US - 10th Oct 21
US Real Estate ETFs React To Rising Housing Market Mortgage Interest Rates - 10th Oct 21
US China War over Taiwan Simulation 2021, Invasion Forecast - Who Will Win? - 9th Oct 21
When Will the Fed Taper? - 9th Oct 21
Dancing with Ghouls and Ghosts at Alton Towers Scarefest 2021 - 9th Oct 21
Stock Market FOMO Going into Crash Season - 8th Oct 21
Scan Computers - Custom Build PC 6 Months Later, Reliability, Issues, Quality of Tech Support Review - 8th Oct 21
Gold and Silver: Your Financial Main Battle Tanks - 8th Oct 21
How to handle the “Twin Crises” Evergrande and Debt Ceiling Threatening Stocks - 8th Oct 21
Why a Peak in US Home Prices May Be Approaching - 8th Oct 21
Alton Towers Scarefest is BACK! Post Pandemic Frights Begin, What it's Like to Enter Scarefest 2021 - 8th Oct 21
AJ Bell vs II Interactive Investor - Which Platform is Best for Buying US FAANG Stocks UK Investing - 7th Oct 21
Gold: Evergrande Investors' Savior - 7th Oct 21
Here's What Really Sets Interest Rates (Not Central Banks) - 7th Oct 21
CISCO 2020 Dot com Bubble Stock vs 2021 Bubble Tech Stocks Warning Analysis - 6th Oct 21
Precious Metals Complex Searching for a Bottom - 6th Oct 21
FB, AMZN, NFLX, GOOG, AAPL and FANG+ '5 Waves' Speaks Volumes - 6th Oct 21
Budgies Flying Ability 10 Weeks After wings Clipped, Flight Feathers Cut Grow Back - 6th Oct 21
Why Silver Price Could Crash by 20%! - 5th Oct 21
Will China's Crackdown Send Bitcoin's Price Tumbling? - 5th Oct 21
Natural Gas News: Europe Lacks Supply, So It Turns to Asia - 5th Oct 21
Stock Market Correction: One More Spark to Light the Fire? - 5th Oct 21
Fractal Design Meshify S2, Best PC Case Review, Build Quality, Airflow etc. - 5th Oct 21
Chasing Value with Five More Biotech Stocks for the Long-run - 4th Oct 21
Gold’s Century - While stocks dominated headlines, gold quietly performed - 4th Oct 21
NASDAQ Stock Market Head-n-Shoulders Warns Of Market Weakness – Critical Topping Pattern - 4th Oct 21
US Dollar on plan, attended by the Gold/Silver ratio - 4th Oct 21
Aptorum Group - APM - High RIsk Biotech Stocks Buy, Sell, Hold Investing Analysis for the Long-run - 3rd Oct 21
US Close to Hitting the Debt Ceiling: Gold Doesn’t Care - 3rd Oct 21
Powell: Inflation Might Not Be Transitory, After All - 3rd Oct 21
Original Oculus VR HeadSet Rift Dev Kit v1 Before Facebook Bought Oculus - 3rd Oct 21
Microsoft Stock Valuation 2021 vs 2000 Bubble - Buy Sell or Hold Invest Analysis - 1st Oct 21
How to profit off the Acquisition spree in Fintech Stocks - 1st Oct 21
�� Halloween 2021 TESCO Shopping Before the Next Big Panic Buying! �� - 1st Oct 2
The Guide to Building a Design Portfolio Online - 1st Oct 21
BioDelivery Sciences International - BDSI - High RIsk Biotech Stocks Buy, Sell, Hold Investing Analysis for the Long-run - 30th Sep 21
America’s Revolving-Door Politics Behind the Fall of US-Sino Ties - 30th Sep 21
Dovish to Hawkish Fed: Sounds Bearish for Gold - 30th Sep 21
Stock Market Gauntlet to the Fed - 30th Sep 21
Should you include ESG investments in your portfolio? - 30th Sep 21
Takeda - TAK - High RIsk Biotech Stocks Buy, Sell, Hold Investing Analysis for the Long-run - 29th Sep 21
Stock Market Wishing Away Inflation - 29th Sep 21
Why Workers Are NOT Returning to Work as Lockdown's End - Wage Slaves Rebellion - 29th Sep 21
UK Fuel PANIC! Fighting at the Petrol Pumps! As Lemmings Create a New Crisis - 29th Sep 21
Gold Could See Tapering as Soon as November! - 29th Sep 21

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Gold in Blow-off Stage or a Lot More to Come?

Commodities / Gold and Silver 2011 Aug 21, 2011 - 11:24 AM GMT

By: Merv_Burak


Best Financial Markets Analysis ArticleBoy, you leave for a few days and all hell breaks loose.  Gold is up some $200 since I last looked.  Is this a “blow-off” stage or is there still a lot more to come?





Long term gold bugs should have been into gold long time ago.  At the present time if one wants to buy gold this is a very risky time for that.  The chart sure does look like a blow-off stage where gold goes sharply through the roof and that is the end of the bull for some time.  The latest move is the sharpest rise (with the highest long term momentum reading) since May of 2006 after which gold took a year long lateral breather followed by a roller coaster ride into late 2008 before it finally started a new bull move.  The “investor” who panicked and jumped in to get in on the gold move in May of 2006 found himself holding a non-performer for over two years.  This type of “investor” probably got out in frustration before the next move, missing the next bull.

Trend:   The gold price remains comfortably above its positive sloping long term moving average line.  It is also far above its up trending long term channel (shown here in Commentary for week ending 29 July 2011) support line.  It has also broken above its upper resistance line suggesting further a blow-off stage.  Only time will tell.

Strength:   The long term momentum indicator is deep inside its positive zone and above its positive sloping trigger line.  As mentioned above, this momentum indicator is now at its highest level since May of 2006.  Strong strength, maybe too strong.

Volume:   The volume indicator is moving higher into new high territory, far above its May of 2006 level.  It is comfortably above its positive trigger line.

At the Friday close the long term rating can only be BULLISH.


Over the past couple of months the intermediate term has taken a sharp upward direction.  As yet there is no clear indication of a turn around.

Trend:   Gold remains well above its positive sloping intermediate term moving average line.  It is also well above an intermediate term up trend line from its first of July low.

Strength:   The intermediate term momentum indicator remains in its positive zone above its positive trigger line.  It has entered its overbought zone so one can expect some hesitation in the price move but as yet no turn around is being noted.

Volume:  As noted in the long term section, the volume indicator has entered new all time highs and remains above its intermediate term positive trigger line.

As of the Friday close the intermediate term rating remains BULLISH.  This is confirmed by the short term moving average line remaining above the intermediate term line.



Looking at the short term chart one can get either overly enthusiastic or very cautious at this point.  Is the action a sign of things yet to come or is it a blow-off ready to disintegrate?  Not being a fortune teller I’ll stick to what IS happening and leave the fortune telling to others.

Trend:   There is no denying, the trend is most definitely to the up side, at least as far as the Friday close is concerned.  Gold remains above its short term moving average line and the line is sloping upwards.

Strength:   The short term momentum indicator is showing continued improvement in strength to the point that it is now entering its overbought zone.  It has been there before, just a week ago.  This time around, although the price is into new highs the momentum is now holding back and not yet into new highs.  This may be a negative divergence but it’s too early to say.  You need a reversal to know if in fact we had a divergence.  I guess one might see the latest action as strength starting to diminish as the price continues to rise.

Volume:   Remember my caution about volume action.  One likes to see the volume increase as the up trend gets going BUT not increase after it has been going for some length of time.  The lather suggests the masses getting in late and is too often near a top.  This seems to be what we might have had here last week.  This week the price continued higher but the volume dropped off, never an encouraging sign.

Despite all the cautionary signs, at the Friday close the rating remains BULLISH.  This is confirmed by the very short term moving average line remaining above the short term line.

As for the immediate direction of least resistance, that should be to the up side but I just think things are too positive and a surprise is somewhere ahead, maybe immediately ahead.  I’ll go with the lateral direction as a compromise.


Although the silver point and figure chart shows a bullish upside break a month back the price has really gone nowhere since.  It has been in a basic lateral trend since the May plunge.  The $43 level would be the next upside break and possibly more potent.  Although silver closed on Friday at a new recovery high the intermediate term (my preferred time period) momentum indicator is still not at its new recovery highs.  The price move seems to be ahead of the price strength.  Something’s gotta give.


Trend:   Silver remains above its positive sloping long term moving average line.

Strength:   The long term momentum indicator remains in its positive zone and once more above a positive trigger line.  As noted above with the intermediate term momentum indicator, the long term momentum indicator is lagging the price action and remains below its previous recovery highs.

Volume:   The volume indicator continues to move in a long term lateral path but has moved above its positive sloping trigger line.  As with the momentum indicator the volume indicator is lagging the price action.

Putting it all together, at the Friday close the long term rating remains BULLISH.  However, there seem to be too many warnings of weakness in the move so one just might wait for better confirmation of the long term trend before jumping in with long term commitments.


Trend:   Silver continues to move above its positive sloping intermediate term moving average line.  The price has broken into new intermediate term highs but it remains to be seen if this is a true break or a false one.

Strength:   The intermediate term momentum indicator is moving higher within its positive zone and above its positive trigger line.  It is, however, lagging behind the price action indicating a loss of strength behind the move versus earlier moves.  As always, this is only a warning and not a prediction.

Volume:   As with the long term, the intermediate term volume indicator is moving slightly higher and is above its positive trigger line.  However, it still remains below its actions from the past few months.

Still, despite the warnings and weakness shown by some of the indicators the intermediate term rating, as of the Friday close, remains BULLISH.  This is confirmed by the short term moving average line remaining above the intermediate term line.


It’s always instructive to compare one commodity against another.  It’s more instructive just to compare the chart performances of the two.  Here we see the under performance of silver, since the plunge, versus the performance of gold for a similar time period.  Silver has closed at a new recovery high but this is not yet confirmed by either the momentum or the volume action.  

Trend:   Silver closed above its positive sloping short term moving average line.  The trend seems to be to the up side but it could use a little more strength behind the move to provide more confidence in its longevity.

Strength:   The short term momentum is back in its positive zone and above its positive sloping trigger line.

Volume:   The daily volume action remains low and not as yet an encouragement for further upside price action.  Maybe the volume will pick-up but we will need to see it.

Despite the warnings, at the Friday close the short term rating remains BULLISH with the very short term moving average line confirming by remaining above the short term line.


Despite the very strong upside moves in gold and silver during the past week and a reasonable upside move by the various North American Gold Indices the Merv’s Indices held back on their moves.  This suggests that as far as the stocks were concerned “investors” were in the game on the “quality” buy side but speculators were still holding back as far as the majority of stocks were concerned.  THIS is not the actions of a bullish stock environment, at least not yet at this time.  One should be very cautious when the speculators are holding back or not speculating.  THEIR buying actions are suggestive of a bullish environment while the actions of “quality” “investors” are the actions of fear and worry (not long term sentiments).  At the present time we have worry suggested from both camps.

As the gold chart earlier showed, gold is screaming “new all time highs”, “new all time highs”, BUT none of the major North American Indices, or any of the Merv’s Indices, are making new all time highs.  As I have often suggested, the stocks are often the leading indicator of what the commodity is expected to do in the not too distant future.

Looking at the various Merv’s Indices they all have been going through a year long wide lateral trend with a few of them showing very clear potential head and shoulder patterns.  Only the Penny Arcade Index is not following this scenario.  It, however, is in a well definite down trend although it just might be ready to move sideways for a while.

Merv’s Precious Metals Indices Table

Well, that’s it for this week.  Comments are always welcome and should be addressed to

By Merv Burak, CMT
Hudson Aero/Systems Inc.
Technical Information Group
for Merv's Precious Metals Central

For DAILY Uranium stock commentary and WEEKLY Uranium market update check out my new Technically Uranium with Merv blog at .

During the day Merv practices his engineering profession as a Consulting Aerospace Engineer. Once the sun goes down and night descends upon the earth Merv dons his other hat as a Chartered Market Technician ( CMT ) and tries to decipher what's going on in the securities markets. As an underground surveyor in the gold mines of Canada 's Northwest Territories in his youth, Merv has a soft spot for the gold industry and has developed several Gold Indices reflecting different aspects of the industry. As a basically lazy individual Merv's driving focus is to KEEP IT SIMPLE .

To find out more about Merv's various Gold Indices and component stocks, please visit . There you will find samples of the Indices and their component stocks plus other publications of interest to gold investors.

Before you invest, Always check your market timing with a Qualified Professional Market Technician

Merv Burak Archive

© 2005-2019 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

Post Comment

Only logged in users are allowed to post comments. Register/ Log in