Robert J. Cote, Jr.
Thirdeyeopentrades
www.thirdeyeopentrades.com
November 24, 2006
Cracking the Code: Engines Ignite
The XAU weekly chart now sports the first of three triggers in a sequence that will portend a sustained rise for an undetermined length of time. We have noticed that the three stages in a sequence that completes within 15 trading days are:
- MACD crosses up and over
- Price crosses up thru resistance
- Resulting in a crossing up thru resistance in the $XAU:$GOLD ratio
If the second two stages fail to ignite then the trip would be postponed.
Tim Ord pointed out in one of his essays earlier this year on GOLD-EAGLE.com that he watches for the $XAU:$GOLD ratio to reach levels below 20 where he identifies a new impulse wave up begins and is a lower risk place to go long. That theory holds water as you can see in the following chart where the stocks bottomed last year at 19.
Armed with that information and the "Cracking the Code" signal, it becomes a bit easier for the gold trader to be properly positioned for moves higher in this generation GOLD BULL MARKET.
You can't keep a good thing down. Got Gold?
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