Today the Dow Industrials gapped down about 30 minutes before the close. A gap shows on the chart as just that, a space were no traded were made. There are exhaustion gaps, which occur at tops, and there are breakaway gaps (upwards or downwards) that signal the start of a run. The rule of thumb is that "gaps are always filled," which means that usually the market trades back to the gap, often after a con-siderably long time.
Anyway, the Dow gapped between 13,100 & 13,090, found support at 13,080, then plunged to 10,061.53 and closed nearly on that very low, at 13,062.91. Whether the Dow is headed higher or not (& there's a good chance it is)it was waaaay overbought, & needing a correction. It started today.
Carefully, observantly note that the Dow in Gold Dollars, which Friday reached the top of the resistance range at a bit over G$400 (19.35 oz) fell back today to G$396.82 (19.2 oz). Now this only offers the first hint that stocks will not be outperforming gold in the near future, but have failed instead. And recall that the DiG$ remains firmly in a down-trend. The 200 DMA is at G$394.21 (19.07oz), so that's the breaking point here. A close below that tomorrow means the DiG$ attempt to break out upside has failed. A close above G$402 accomplishes the upside breakout. My money lies on falling back.
Sorry, I will be travelling the rest of this week, and so won't be sending out daily commentaries. I'll see y'all next week. I've gotta get some rest, so Susan & I are going to take a restful tour of east Tennessee.
Argentum et aurum comparenda sunt -- -- Gold and silver must be bought.
- Franklin Sanders, The Moneychanger
"Buy Silver and Gold Coins at the Best Prices"
To avoid confusion, please remember that the comments above have a very short time horizon. Always invest with the primary trend. Gold's primary trend is up, targeting at least $1,250.00; silver's primary is up targeting 16:1 gold/silver ratio or $78.13; stocks' primary trend is down, targeting Dow under 2,900 and worth only one ounce of gold; US$ or US$-denominated assets, primary trend down; real estate in a bubble, primary trend way down.