From NFTRH25: "I would not be surprised to see last week's euphoria in the precious metals worked off a bit with continued modest USD upside within a bearish flag."At that point a would-be bearish flag for Uncle Buck was just a twinkle in the newsletter's eye, but as I told subscribers in an email update this morning, it was a concern that the dollar had been slammed so violently down to near the short to intermediate target (SMA 200) that we have been following as the lower limit of a rising wedge, still early in its formation.
Yes, a USD bear flag would be just what the [rally] doctor ordered for the gold miners and probably commodities and the stock market as well. Now of course, things do not often stay as neat and clean as we would like, so we must allow for the buck to test the SMA 50 breakdown area, where it should encounter a world full of resistance.
NFTRH25 also noted the rising risk of an HUI correction for subscribers last weekend: "While I believe these stocks are going much higher in 2009, the same caution for traders holds true as the last time HUI was at this level in February. If the short term target is 350 and we are at 325, don't hold out for the last few percentage points. Investors (NFTRH is primarily an investor here, with some minor trading) would look to add on weakness only or hold and await higher levels down the road. But remember, the corrections in this sector are never fun and they are never quiet."
So here we are... the markets are all about probabilities. Not having been issued a guru's ball, I can only go with the probabilities and make sure that NFTRH subscribers are comprehensively aware of them. Blog readers too, at least to the extent that I don't compromise the premium on the newsletter.
Probabilities go both ways. Last week it was appropriate to brace for correction. This week it is appropriate to look forward to continued bullish potential. Pullback targets have been set for HUI and let's just say many gold stocks have a technical condition, born of post-Fed euphoria that should be 'filled'. ;-) Edit (10:45) Well, maybe the flag is all the dollar is going to get after all (no push up to the SMA 50). At least that is how the markets are acting.
