"When misguided public opinion honors what is despicable and despises what is honorable, punishes virtue and rewards vice, encourages what is harmful and discourages what is useful, applauds falsehood and smothers truth under indifference or insult, a nation turns its back on progress and can be restored only by the terrible lessons of catastrophe." … Frederic Bastiat
Evil talks about tolerance only when it’s weak. When it gains the upper hand, its vanity always requires the destruction of the good and the innocent, because the example of good and innocent lives is an ongoing witness against it. So it always has been. So it always will be. And America has no special immunity to becoming an enemy of its own founding beliefs about human freedom, human dignity, the limited power of the state, and the sovereignty of God. – Archbishop Chaput
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Gold regains half of its losses from the record peak price
Technicians make a big deal out of the 50% Fibonacci retracement level due to the psychological implications of that level in the minds of traders, both bulls and bears. Generally speaking, those who have been on the wrong side of a trade and who have very deep pockets, will oftentimes allow the market to continuing moving against them while they wait for the inevitable price retracement, either higher or lower depending on which side of the market that they are on.
Once they regain half of their losses, they will oftentimes then finally get out of the losing trade and move to the sidelines to access their next move. That means that a market that has been moving lower after making a peak in price, can very often expect to see some strong selling at this 50% retracement level. Note on the chart that I have indicated in red "Should be a tough fight here" at this particular level which came in near $1725.
Today gold went through this level and as of the time of this writing has not as of yet shown any indication of wavering on the part of the bulls or any eagerness to cut losses if they have been riding the wave down from $1900. This fact bodes well heading into next week as it sets the gold market up for a potential test of first, $1750, and then $1770.
The fact that the mining shares as evidenced by the HUI are acting so strongly today, is suggestive that those equity guys are reassessing their views of where the gold price is headed and are pricing in a higher level than they originally were thinking.
Downside support lies first near $1710-$1705 followed $1680.
Endgame Begins - UK "Foreign Office Sources Say Merkel Now Thinks Greece Will Default"
ReplyDeleteSubmitted by Tyler Durden on 01/27/2012 19:01 -0500
Nuff said