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March 16, 2010

Breakouts

Today's action was quite constructive toward our anticipation of seeing the second half of a parabolic run in precious metals. Gold, silver, and mining shares broke out across the board from minor consolidation patterns, and the dollar reversed a potential swing low by setting a new, near-term low.

Gold daily chart

silver daily chart breakout

gold mining etf chart

us dollar bear market

All these charts should see imminent follow-thru in order to confirm these moves. The action in equities should also help juice mining shares.

s&p 500 daily chart

Whether or not the equity breakout holds in the near-term, higher prices can be expected before this cyclical bull terminates. Stocks have just been rolling right through overbought levels. The next pause in the rally should only serve to give stocks a necessary rest to prepare for a more ferocious advance.

 

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