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Gold Stock Trades Editor Jeb Handwerger is a highly sought-after stock analyst syndicated internationally and known throughout the financial industry for his accurate and timely analysis of the equities markets, particularly the metals and mining sector. Subscribe to his FREE Newsletter right... More
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  • Market Makes Move Above 200 Day on Higher Volume

     

    Today the major indices made an important move to regain the 200 day moving average and clear resistance on higher volume.  After making 2 previous attempts to cross the 200 day the markets are appearing to have made a successful double bottom.  The double bottom pattern would be more confirmed if the volume on today's breakout was above average.  Nevertheless, it was higher than the previous day which means the bulls have won the short term battle and are in charge.


    Also the Dow made a double top breakout on the point and figure and a break of a trend line.


    Many leading stocks are showing bearish signal reversals on today's rally which means it may have legs especially aerospace and defense stocks as the Middle Eastern Situation between Iran and Israel intensifies.  Any short positions need to be covered and additional buy recommendations will be coming shortly.

    The rally was good for gold today and I expect a breakout to new highs shortly.  Gold is making an ascending triangle and I expect a breakout to new highs in the short term.  $122.50 would be the next breakout with a measured move expected to $137.5.


     



    Disclosure: Long Select Gold Mining Stocks
    Jun 15 8:28 PM | Link | Comment!
  • Three Failed Attempts to Regain 200 Day Moving Average, Buyers Beware!

    In baseball if you swing and miss three times then you are out.  On a chart if you see three failed attempts to break resistance…get out or short.

    Each time the SP5oo tries to regain the 200 day moving average it fails and it is immediately hit with selling.  Sellers are in control and the market is still in correction mode.


    Today Moody’s downgraded Greece’s debt which caused the market to give back early leads.  The chart shows a picture of a move up to the 200 day on low volume.  This means there is very little buying going on.  In order for me to gain confidence in the markets I need to see a break through major resistance levels with conviction and that moment is not apparent yet.

    Quite contrary three failed attempts to regain major support has failed.  This causes me great concern because in a bull market the 200 day acts as support.  In this case it is acting as resistance, which is typical of bear markets..buyers beware!

     

    Jun 15 12:49 AM | Link | Comment!
  • Is Gold In A Bubble? Classic Cup and Handle Pattern.

    On the front page of all the media outlets is the question if gold is in a bubble. I ride bubbles and look for beginning signs of bubbles. Bubbles are irrational, but there is an old saying that markets are irrational a lot longer than one can stay solvent.

    I believe gold is nowhere near a bubble top and believe now is the time to profit on the next major asset class ready to run through finding the strongest mining stocks in the sector. I use relative strength to find those companies.

    Gold is in a classic cup and handle pattern. The cup and handle pattern has historically led to major market moves.
     


    You can see by the graph the major breakout from the six month saucer on excellent volume. Notice how the volume dries up on the handle. Now I expect a major breakout and a run to $136 on GLD or $1375 an ounce.

    Compared to other bubbles gold appears flat.


    This a chart of the oil index verse the gold and silver index. Notice the run in oil before the credit collapse. This run lasted almost 5 years before it topped. Meanwhile for the past 15 years the XAU has been relatively flat and yet it has had a nice run we have not seen the run up like other asset class bubbles.

    I believe there are signs that we may be moving into a peak gold area and would not be surprised if there is a global rush to gold as investors lose faith in fiat currencies.

    The recent collapse of the euro only preludes what will eventually happen with the dollar and treasuries. Now many people have run from the Euro to dollars, but I believe that is temporary. Now is the time, before the masses rush in, to buy gold and specifically the strongest mining shares which I highlight here. This is not the time to be bottom fishing other markets. I believe to stick to strength. This chart above gives me the confidence to know that we have not entered bubble territory yet.

     



    Disclosure: Long NGD and UXG
    Jun 11 1:24 PM | Link | Comment!
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