Gold falls sharply
By Colin Twiggs
February 21st, 2013 12:30 a.m. ET (4:30 p:m AET)
Gold is headed for another test of primary support at $1525 after breaking support at $1625. Breach of $1525 would signal a primary down-trend. 63-Day Twiggs Momentum breakout below -10% would strengthen the signal, while reversal above zero would suggest further ranging between $1500 and $1800.
Brent Crude remains above $117/barrel, signaling a primary up-trend. Recovery of Nymex WTI above $99/barrel would confirm. Narrow consolidation below the resistance level is a bullish sign.
* Target calculation: 116 + ( 116 - 106 ) = 126
The gold-oil ratio is falling. Decline below 10 is a long-term buying signal for gold. In recent years fluctuations have been a lot narrower and a fall below 12 may be sufficient.
I am not yet convinced that gold is headed for a primary down-trend. Watch out for bear traps. Respect of primary support around $1500 seems as likely — and would present a buying opportunity.
Any intelligent fool can make things bigger, more complex, and more violent. It takes a touch of genius — and a lot of courage — to move in the opposite direction.
~ Albert Einstein