Robert J. Cote, Jr.
Thirdeyeopentrades
www.thirdeyeopentrades.com
September 12, 2006
After the Precipice, Back To Ice?
Now that the gold stocks have decided to fall from The Precipice, we would like to examine the charts for clues as to how steep this pullback may be. We aren't able to make predictions and that's not our objective. We simply enjoy using tools to try and anticipate where areas of support may come into play.
Richard Wyckoff first demonstrated the principle of jumping the creek and coming back to ice. We have indicated both for you in the accompanying chart. We're also noting the formation of a potentially bullish falling wedge evolving from the head and shoulders topping formation. We are also drawing a new trend line across the tops of the $XAU:$GOLD ratio.
If the 65 week moving average fails to offer support, then we think a test of 119.11 or even a test of ice is in the XAU index's future. It's quite possible that the June low was an insufficient test of ice.
So, for now we wait.
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Thirdeyeopentrades wishes you Health, Wealth, Wisdom and Happiness!
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