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Palladium is
a classic example of the effect of the RSI ranges in bull and
bear markets. In the bull run from 197 the RSI was constantly
pushing above the 70 overbought level whilst the corrections
failed to move under the 30 oversold level. The opposite occurs
in a bear market where the RSI continuously dips under the 30
oversold level and fails to push back above the 70 overbought
level. Currently the RSI is trading above 70 and failing to dip
under 30 on the corrections. This is a signal of a long term
bull trend. |
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The $ Gold price has the same data. Its
RSI is constantly trading above the 70 overbought level and failing
to penetrate under the 30 level. This is even more pronounced
as the recent sudden $180 collapse in the gold price again failed
to push the RSI into oversold territory. This is a signal of
a major bull trend. Also note that the RSI has mirrored the new
highs of the price indicating a stable bull trend. |
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The Rand gold price has
also formed a series of RSI ranges commensurate with the bull
and bear market types. Currently the data is exhibiting strong
bullish trending.
Once again note that the RSI
is moving to new highs with the price thus indicating a stable
bull market.
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Silver has
the same bullish range indications on its RSI. Even the recent
collapse in the price failed to force the RSI into the oversold
levels. This is a powerful bull trend. |
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The reverse divergence scenario
on the daily chart allows counts to be made. The difference between
the two lows gives $32 on the gold price. This is added
to the recent peak for a short term target of $757. Thus I continue
to look for my target of $750 to be met.
BUT this time the shares will
lead bullion ... not lag as in the last upside bullion charge
to $725.
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The long term weekly chart
for Silver has a difference between the lows of $2.98
to be added to the recent peak of $14.94 for a target of $17.92.
This is a huge bull market
in precious metals that has resumed and is likely to gather momentum
going forward to take out the recent highs.
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The JSE Gold index is shown with the flag
pattern that I so often detailed. That was the I - II correction.
The top of I was signalled by a classic divergence and the bottom
of II by another classic divergence. But note the range of the
RSI during the correction and its constant attacks on the 30
level and total failure to break above 70. The converse is true
of the current situation where the RSI is above 70 and failed
to break under 30 during the recent correction. This is a stable
powerful long term bull market. |
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This is my long term data for the JSE Gold
index. We have completed the I-II correction and have commenced
wave III. This wave III MUST go well above the top of wave I,
as I have repeatedly detailed. The recent correction was the
1-2 in a five wave movement that are the sub waves of wave III.
Wave III is not likely to be completed for some time and will
take the share to much higher levels than current prices. This
is a buy on the dips and hold market. It is a long term bull
market. And do not forget that even with the large corrective
wave IV there will still be a massive bull wave V to come. |
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The JSE Gold index is shown with its relative strength against the
JSE Overall index in grey. For the past 8 years this relative
strength has been forming a massive base pattern. This grey chart
is ready for lift off. This implies that the gold index will
outperform the overall market for some considerable period of
time to come. This is not likely to be just a short term show
of strength but a protracted trend of superior performance. Gold
shares are a necessary inclusion for all portfolios. |
