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PART 2
 
Gold stocks tried to stem
yesterday's decline, by finding support at the 50 day EMA. As long as, it
remains above 55 the uptrend is intact. If you own gold
stocks have some stops to protect against a slide below 55. We
sent an email on 9-26-01 (see
emails
for trades) notifying -among other trades- our current
protective sell stops for the gold stocks in our portfolio, you
may want to take a look at them.
The US dollar is still rather weak,
and in a bearish technical formation (inverted flag) We expect
it to lose further ground in the next few weeks.
 
The Utilities provide a very good
illustration why markets that rally without the benefit of
having spent some time to form a "base" a
"foundation per se" are unstable and prone to further
losses. he Utilities Index had three rallies, going non-stop,
from fully oversold, to fully overbought, only to fall even
lower. Their recent advance has eerie similarities to the past
three failed rallies. Without a solid base supporting it, we do
not see why this one will be any different.
Some of our guests -and good friends
we may add such as Mr. Meissner- believe that oil is headed higher. We
disagree. Please read our comments about oil,
in our weekly report. As of today, it has lost half
of last week's gains, and it appears ready to re-test its recent
lows.
Now let's take a look at the chart
below, it is the Industrial metals Index. Any upturn in the
economy is preceded by an upturn in Industrial metals,
anticipating an upturn in demand. Does this chart indicate that
there is any kind of improvement in global economic
conditions? The DJIA has rallied 1000 points in 8 days,
indicating a "better" economy ahead. Is it possible
for "industrial" companies to do better, while there
is no demand for "industrial" products? If there is
going to be an increase in demand for"industrial"
products, how come industrial metals continue to head lower,
isn't the market a "discounting" mechanism that
"anticipates" everything in advance?
Click here for PART 3
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