Stocks, Gold Flat

q0912.pngThe stock indexes were all on the flat side today, as was gold. Stocks had many false starts and attempted to make good gains mid-day, but faltered somewhat to close mixed to slightly higher. However, it was enough to turn the very short-term momentum indicators up on all broad indexes and the remaining sectors that I follow that did not turn up yesterday. Most indexes and sectors are showing a longer term downtrend, with an up to flat medium term trend, and now with up momentum. It is not the strongest situation for the long side, however QQQQ still look as if it wants to go higher. It did sell off near the end of session a bit more than the S&P or Dow, and left somewhat of a upthrust bar. It is nicely higher than the three day pivot (yellow dot), and as long as the three day pivot holds, longs should be favored. The weekly chart looks constructive for the bull case. There is obviously much anticipation about the potential rate cut next week, so there could be much volatility. Most are expecting much volatility, so it may turn out to be quiet until that announcement. There is also quad witching at the end of next week. With all momentum pointing upward, even with the mixed trend picture, it is reasonable to expect a challenge of the upper error band. As always a move below the three day pivot would negate the above scenario.
gld0912.pngThe gold market tried to sell off today, but regained its footing to close near the highs of the session, although still off slightly for the day. The three day pivot held the lows almost to the tick. The short term momentum kinked down to paint a second red dot on the indicator in the sub-graph, but trends are obviously pointing up sharply. I still favor holding off on new purchases until after a shake out. The new multi-year lows in the dollar is getting much press. It seems to be the main driver of gold right now. Some of the major gold mining shares that did not participate as much as one would expect in the previous upmove in gold, but are now gaining ground nicely, which leads me to believe there is still more to the upside longer term. In the short term there needs to be a pullback. Chasing a market up can be very dangerous, especially in the gold market. This market is known for knocking traders off the bandwagon, just when everything looks the most bullish. Be careful.

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