Another positive week ahead?

Some minor bullish development for gold can be spotted among the charts I follow.

Australian Gold Index

Aussie gold chart is interesting to watch because it topped before the other did (Nov 2010) and it went deeper in red than the other did. On the monthly chart it is more oversold than it has ever been since 1997 including the 2008 crash. All my trading  positions are in Aussie stocks, currently 50% long. At present it is on a true 16-20 buy and is about to sell for profit if today closes around $5000. I am not going to sell a single share before I see the 35-39 buy and probably rise to challenge the 92-96 echo. $5433 is the major level and it needs to break above it to establish new long term bull trend.

UUP dollar long

Since I reported last time on this chart its action was mostly sideways but with short to medium term bearish bias.  The true bull signal is not under threat but the behaviour around the 35-39 is not confirming so far. When it seemed it was going to avoid a double sell it dropped sharply to violate the 35-39 echo and sell it for a double sell. It, then, tried a recovery and two days rally produced a new 35-39 buy but it wasn't long lasting because on Friday it collapsed again and it now seems it will sell to confirm a medium term bearish period that should lead to the 92-96 support test. I interpret this behaviour as not confirming the true 92-96 buy from 50 days ago. It is still not too late but this bearish behaviour should stop and it must produce a convincing 35-39 buy that is going to last and lead to a new high. For this to happen Monday and Tuesday should keep it above $22.50.

In my last report I thought that chances were 60:40 for the bullish scenario to develop but now I think this is going further down to test the 92-96 echo. That test would be in line with a bottom in gold and is going to decide if this chart has a potential to transform into a real bull.

S&P 500

Since my last report S&P has had another failed true bull signal but it maintains the up trend and it seems it will be able to follow the 92-96 echo to the top around $1420. What happens after that is the question? To me it still looks like topping out but if it can be at 1420 mark in about a week the structure of the 92-96 echo can give it another true bull signal but this time with a much better chance to keep it alive even if a significant correction ensues. This is  especially interesting in conjunction with the SLV chart which could give a significant buy signal just at the same time when S&P reaches the previous high and produces a true bull signal.

SLV

The SLV chart has shown some serious resilience in the last 2 weeks by avoiding breakdown and slowly building a base for a move higher. It has sold a 16-20 echo but keeps grinding higher so it is now, 10 days into the signal, almost 3% in green. See how all is happening while breaking the resistance line from the Apr 2011 high and touching breaking the 35-39 resistance. This looks bullish and if it buys the 35-39 echo in a week time at the same time when S&P reaches $1420 it could be a signal that the S&P is not going to top out as everyone is expecting. 

GLD

The GLD is moving sideways and breaking the immediate resistance from the Feb high but more importantly it seems stuck in-between the 35-39 as a support and the 92-96 as a major resistance. This can last only till the middle of Sept when it will be forced to break through the 92-96 into the bull territory or to follow it down and break bellow $150. 

The development over the last two weeks seems positive for the bulls. Grinding slightly higher or sideways for another month is setting up for a major decision event in a middle of Sept 2012. I am happy to keep my 50% long position at least until the prices of different indices reach the 92-96 echo. The stops for all my positions are now in place and they are set below the recent lows. For Aussie shares that is mostly July lows. For those interested I have positions in NCM, RSG, OGC and IGR.

Good luck to everyone.