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Gold and Bonds Still Diverging

  • Written by Syndicated Publisher No Comments Comments
    September 10, 2014

    Bonds continue to defy the experts and pundits, continuing to make new rally highs even as talk increases that the Fed will have to begin raising interest rates sooner than previously expected.

    Are bonds maybe saying the economy is not as strong as the Fed thinks, or that something is going to happen that will require a safe haven?

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    Gold has been going the other way so far this year, although with considerable volatility.

    It has been confined in a narrowing symmetrical triangle formation. The direction of the breakout from such a pattern usually determines the next sustained direction.

    With another rally attempt having failed at its short-term 30-day m.a., it has been headed down toward the lower limit of the triangle formation again.

    After rallying some last week, it is plunging around $19 an ounce at the moment this morning, which has it at the lower limit of the formation again. I have included that decline in the following chart, although we can’t know if it will hold to the close.

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    Is it ready to make another rally attempt, or finally break out of the formation to the downside?

    Images: Flickr (licence attribution)

    About The Author – Sy Harding, Street Smart Report

    Sy Harding publishes the financial website Street Smart Report Online and a free daily Internet blog at Sy’s Free Blog. In 1999 he authored Riding The Bear – How To Prosper In the Coming Bear Market. His latest book is Beat the Market the Easy Way! – Proven Seasonal Strategies Double Market’s Performance!

    It includes our research and analysis on the economy and markets, and provides charts and buy and sell signals on the major market indexes, sectors, bonds, gold, individual stocks and etf’s, including short-sales and ‘inverse’ etf’s.

    It provides two model portfolios as guides. One is based on ourSeasonal Timing Strategy, one on our Market-Timing Strategy.

    In depth updates are provided every Wednesday, with interim ‘hotline’ updates every time we make a trade. An 8-page traditional newsletter Street Smart Report is provided on the website every 3 weeks, in pdf format for viewing or printing out.

    There is the Street Smart School of online technical analysis ‘seminars’,commentaries to keep you ‘street smart’ about Wall Street, and much more. 

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