INTERMARKET ANALYSIS: On the surface, the picture is negative for gold. The things that can pull gold lower are pulling gold lower: the NASDAQ 100, S&P 500, euro FX (euro/$U.S. pair) and crude oil are weak; bonds are strong. The bull camp (also known as the "Hyper inflation is coming. Gold will explode." camp) is losing money on the long side of gold. The bear camp (also known as the "What inflation? We're in a global recession." camp) is making money on the short side of gold. Under the surface (this is the good news), the above-mentioned weakness is getting overextended and the NASDAQ, typically a speculative leader, showed good basing action through this afternoon. NASDAQ buyers look lean and hungry. In today's diary entry (available to my subscribers) I show in detail what happened today.
6-MONTH CHART: Gold bulls had an ugly day today.
Six-month chart for August 2009 GLOBEX gold futures (source eSignal)
Richard L. Muehlberg is an analyst and day trader. He uses the lines approach: a combination of intermarket, time-of-day and linear regression channel analysis. Each trading day, Richard e-mails his subscribers a detailed trading diary entry covering the day's gold, crude oil, euro FX (euro/$U.S. pair), eurodollar, bond, NASDAQ 100 and S&P 500 action, including an end-of-day capture of his unique 42-chart trading screen. For more information, visit his website at www.DayTradingWithLinesInTheSky.com.
