InvestBaboo's  Instablog

I hate to say this but both Gold and Silver developed sell signals today on their daily charts while the US$ developed a buy signal on its daily chart. However, there are no sell signals for either Gold or Silver on their weekly charts and US$ is still a sell on weekly charts.

I will say though that weekly charts are MUCH MORE RELIABLE than daily charts if you are in for the medium to long term. Let us look at GLD (ETF that tracks Gold) as an example.

GLD developed a Buy signal on its weekly chart when it was trading between the prices $81.59 and $85.79 during the week of 12/22/2008. Ever since then GLD has not had a sell signal on its weekly charts while it developed a sell signal on its daily charts on 01/12/2009, 03/03/2009 and today 06/15/2009. The daily sell signal on 01/12/2009 was cancelled with a buy signal on 01/23/2009. The daily sell signal on 03/03/2009 was cancelled by a buy signal on 05/04/2009. As I noted before the weekly charts meanwhile did not develop a sell signal even once. In the case of GLD the sell signal on 01/12/2009 was cancelled less than two weeks later when it got a bullish jolt. However, the sell signal on 03/03/2009 took almost two months before getting its bullish jolt. For those that are in Gold and Silver with a short term perspective this may time to lighten up on your positions.

Clearly this wall that Gold and Silver have hit is due to the strength in the US$. This shocks me. With trillions more in debt still to be issued I can not but believe that this strength in the US$ is anything but a short term phenomenon. But then the markets can defy fundamentals and the short term could be as many as a few weeks or just a few days.

I am sticking with Gold and Silver until such a time when they develop weekly chart sell signals. You see, when you get a sell signal on a weekly chart you are almost always toast for months. I will be watching the price action in Gold and Silver very carefully over the next few days and let you all know if it appears to go off its tracks on the weekly charts. Until then happy trading and/or investing!