Tuesday May 08, 2012 2:45 PM
Gold’s weakness was exacerbated by “another one of
those tsunamis of selling,” says John Howlett, division vice president
with Mitsubishi International. “Supposedly upwards of 14,000 lots of
gold were sold in the 5 minutes from 8:20 to 8:25--the old open-outcry
opening time,” he says. “After the 7,500 that went on April 30, it may
be safe to say that somebody’s system is telling them to abandon ship.
And that somebody has some substantial volume to chuck around.” He
cites two technically bearish items for gold: “the market is
significantly through and closing belowthe 300-day moving average for
the first break since 2008 and the market is also ‘under the cloud’ on
the ichi moku chart for the first time since Q1 2009. The caveat on the
second item is that it’s best on a weekly chart and it’s only
Tuesday.” Meanwhile, a trendline back to November 2008 puts support in
the area from $1,595 to $1,605, he adds. As of 2:10 p.m. EDT, Comex
June gold was $34.40, or 2.1%, lower at $1,604.70 an ounce.
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