Gold Charts R Us Shock! Horror! Splat! Harry Schultz snippet Archives May 2, 2005 The following snippet is an excerpt from Harry Schultz' current GCRU, dated Apr 27, 2005. Gold Charts R Us - sent weekly by Email - $US100/mo for 3, 6, 9, or 12-month subscription periods (fax +$120 per 3-months) - you can subscribe here. 2-week trial of GCRU $45 -- yes, sign me up! Welcome to GCRU No.158 on April 27, 2005. ••Again, what a difference a week makes! Last week the mkt was full of direction uncertainty, due to recent chart damage after gold's fall to 424. But on Monday, gold shot up from a perfect 4-day symmetrical triangle (easier to see on a 120-minute chart!). It was an explosive breakout. June gold shot to 439.10 before digesting part of that rise. ••The best aspect of this breakout is that the symmetrical triangle seems to have occurred as a consolidation half way up from the prior breakout, last Tuesday, from that falling wedge I mentioned lastime which began in mid March. So we have a pair of breakouts. The latest one (the sym tri) yields a target of 440 +/-, while the former one (the wedge) yields a price objective of 450. •••I feel these patterns will play out. I covered my gold shorts (taken as a hedge against gold falling) & went long on the breakout. •••440 will offer modest resistance based on prior highs/lows but IMO not enough to sell & rebuy. •••I also went long 2 gold shares on Tuesday that look promising (eg, NG, VYE-V, & bear fund RYURX). Will no doubt buy others on Wednesday after I see the Tuesday night closing charts. •••••Mind U, bullion is leading gold shares & will probably continue to outperform the shares for a while, but most traders prefer to trade the shares rather than gold futures. But GCRU provides guidance, as always, for the gold futures (which I trade off&on) on pg 6. •The gold indexes HUI, XAU & SGI were only slightly above multi-month lows a week ago, whereas bullion is far above its comparative low. So, futures traders have done better than share traders. An advantage futures traders have is: no worries about problems at indiv mines; they just trade the metal. •••The apparent double-bottom in bellwether Newmont is encouraging. Its Spinner is encouraging. Agnico, Cameco & a few other stks are lined up to rise above shorterm downtrends, but most golds will almost immediately plow into overhead resistance. So, follow the chart guidelines with care. Novagold warming. Crystallex strong. Viceroy explosive. But most are languishing in messy sideways drifts. "Spinner lines are mixed but growing number of new higher lows continue to boost odds for sustainable reversal activity" says associate Paul. •••There is always something to worry about. Just now it is: WHY was US$ up on Tuesday while gold is up? And why was the euro a bit weak, while gold was strong? I suspect the answer is: some people are starting to regard gold as a currency & more dependable than the paper ones. In the past, when gold breaks up & away from currencies, it has been very good news indeed for gold advocates/hard money proponents. But of course I enjoy worrying. It's part of my job, to protect my reader family. ••If euro can hold over 1.2925 on this 3rd leg correction, it will be poised for a run to 1.3400. •••The currencies are flip-flopping, not giving major signals, some are rangebound. •••Stocks are mostly in the same boat. There are some good buys & shorts (as we list in our Full Market Update this week) but the mkts as a whole are not thrilling. •••I'm closing this section before I see the Tuesday closes, which - this time - may hold some surprises due to the wide swings so far on Tuesday. So, meet me at the PS Bar, below. Bye from your up beat, up trending Uncle Harry PS: Shock! Horror! Splat! Suddenly, at the close Tuesday, gold shares fell to close at their collective lows of the day - while gold bullion closed at its high of the day! Futures traders were delighted, while gold stock holders were unhappy & frustrated. ••All 3 gold indexes closed at their day's low. Our in-house Advance/Decline Line fell, almost to its year's low. •••I said on Tuesday that gold was outperforming the shares which was a relative strength matter. But at the close it went from relative to divergent! Opposite directions! •••Partly this can be blamed on overhead supply, referred to above. Glass ceilings. They are still there. But mostly, IMO, the blame is US$ strength - which is occurring simultaneously with gold bullion strength. It reflects my theory above that gold is increasingly being seen as a currency now, not a commodity. That's good news. But meantime, gold share holders are accustomed to reacting to US$ movements. So when they see $-strength, they pull back on buying. •However, $-strength is likely to run out soon-if the building H&S top pattern of the last 4wks gets fulfilled. The right shoulder could carry the $index up to 84.80 +/- before declining to test its neckline at 83.20 +/-. We'll soon see. ••••What now? Watch for relative strengths in the shares. I will. Watch the US$ Index right shoulder. Don't be too timid while gold is so strong. Gold is destined for 450. The gold shares can't ignore that! Good gold luck, Uncle Harry The following indexes, mkts & gold stocks are reviewed this week in the full edition of GCRU: Agnico (NYSE & Tor) Anglo American (Nas) Cameco (NYSE & Tor) Canico (Toronto) Crystallex (Toronto) Desert Sun (AMEX & Tor) Eagle Plains (Toronto) Fnx Mining (AMEX & Tor) Gold (NY) Lihir (Sydney & Nas) Maverick Tube (NYSE) Meridian (NYSE & Tor) Newcrest Mng (Oz) Newmont (NYSE & Tor) Novagold (AMEX & Tor) Orezone Res. (AMEX & Tor) Perseverance (Oz) Rio Tinto (NYSE) SGI SGS (A/D line) Teck Cominco (Toronto) TREND INVESTORS USD (NYBOT) Viceroy Explor. (Tor) Virginia Gold (Tor) Yamana Gold (AMEX & Tor) 2-week trial of GCRU $45 -- yes, sign me up! *** 2-week trial of GCRU $45 -- yes, sign me up! All charts created with TradeStation by Omega Research 2000. ### Who is Harry Schultz? Chevalier Harry D. Schultz, KHC, KM, KCPR, KCSA, KCSS, is the highest paid investment consultant in the world at US$2,400/hour-US$3,400/hour on weekends (International Edition Guinness Book of Records 1981-2002). To keep in touch with developments around the globe, Harry draws from correspondents in many countries, plus mountains of international newspapers, magazines, and other data. At the top command posts of Harry's elite team are Chief Market Analyst, Paul Griffiths, and Research Editor/geopolitical analyst Gordon Frisch. Loyal HSL and GCRU subscribers in 90 nations are much more than simply names and addresses; Harry and his team consider them part of their cherished global family. Harry is regularly quoted in books, articles, and interviews and by other newsletters (the "alternative press"). Arthur Hailey, a longtime personal friend and HSL subscriber, based his character Lewis Dorsey in the bestseller The Moneychangers, directly on Harry Schultz. Harry has lived for extended periods in 18 nations, and shorter periods in many others. Knighted five times, Harry is a man for all seasons and a true citizen of the world. Contact: E-mail: HSLmentor@racsa.co.cr Fax: Costa Rica (506) 272-6261 Fax: Switzerland (41) 21 652 0525 Mail: POBox 622, CH-1001-Lausanne, Switzerland 2-week trial of GCRU $45 -- yes, sign me up! Copyright ©1964-2005 F.E.R.C. All Rights Reserved. Reprinted with kind permission at 321gold Inc