Technically Precious with Merv

Gold bottomed and looks to be moving higher BUT the volume is just not there to be
encouraging. The next week or so will tell us if it is going towards higher levels or if the
downside will continue.
Time constraints and no chit chat this week, just the facts.
GOLD
LONG TERM
Well, the P&F advice to wait for the $1320 support to be broken, with a move to $1305, before
going P&F bearish is working, so far. The final support is still holding so we’ll keep our fingers
crossed hoping that now we can go into higher ground. With the turmoil in the Middle East I
would have expected a more exuberant gold move but it does what it has to do to confuse
most traders.
My normal indicators are still giving us a positive reading. Gold bounced off its long term
moving average line and remains above the line. The moving average line itself is still in a
positive trend. The long term momentum remains in its positive zone although it has decline
quite a bit from its high and remains just a hair below its negative sloping trigger line. The
volume indicator continues to drift sideways and is sitting right on top of its still slightly positive
trigger line. All in all the long term rating remains BULLISH.
INTERMEDIATE TERM
Unfortunately the intermediate term is not as positive as was the long term. Gold is still below
its negative sloping moving average line. The momentum indicator is, however, in its positive
zone (just slightly) and above a positive trigger line. The volume indicator is zigzagging above
and below its trigger line ending the week just below the line with the line continuing in a
negative direction. Putting all this together we are neither bullish nor bearish but are at a –
NEUTRAL rating for the intermediate term. The short term moving average line is still some
distance below the intermediate term line and not yet ready to confirm any upgrade in rating.
SHORT TERM
One might be encouraged by the actions of gold to stage somewhat of a bottoming and rally
event but I’m not yet fully convinced that the turn around is here. The biggest worry is the lack
of upside volume action. Bull moves rarely last without the backing of increasing upside
volume action. As we see in the chart the recent volume is below is average volume from the
past 15 days, which included a good portion of the downside trend. But let’s look at the
indicators and see if they might give us a more encouraging assessment. (more)