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The index is between support and resistance, while neither the ADX or the Aroon Indicator have given us a "SELL" signal.
If Gold continues to hold above 420, it may imply that it is at a similar point.
The XAU has Fib levels between 85 and 88.65.
The Gold/XAU ratio suggests that a pullback in the XAU ought to be expected.
The SI25 is hovering around the zero line implying that a rally termination could be at hand.
Momentum appears to be rolling over, implying that a rally termination could be at hand.
The steep divergence implies that a rally termination could be at hand.
The Buy/Sell Equilibrium Index is hovering around the zero line implying that a rally termination could be at hand.
The McClellan A-D Oscillator is near the zero line implying that a rally termination could be at hand.
The A-D Summation Index is rising and it is above the zero line, implying that the intermediate trend is up.
Notice that the A-D line is at resistance, implying that a rally termination could be at hand.
The McClellan Volume Oscillator is near the zero line implying that a rally termination could be at hand.
The Volume Summation Index is rising and it is above the zero line implying that the intermediate trend is up.
Notice that the Cumulative Volume is at resistance, implying that a rally termination could be at hand.
The Volume Thrust Oscillator is at the top of each range implying that a rally termination could be at hand. CONCLUSION All the indicators are at the point where rallies either terminate or accelerate. If the rally is about done, you would expect it to terminate with the indicators hovering close to the zero line. By the same token, if a new up-leg--within an ongoing rally--is about to start you would expect it to happen with the indicators hovering close to the zero line, and the Index stuck between support and resistance. At this point the odds are 50/50 for either event, therefore, we will initiate a "market neutral" position (see details below, but DO NOT try this on your own). TRADING STRATEGY We will buy to open 25 of the Sep95 calls, and we will sell short to open 50 of the Sep100 calls. AND We will buy to open 25 of the Sep90 puts, and we will sell short to open 50 of the Sep85 puts. We are risking $1,126, and we stand to make up to $7,512 if the XAU is between 83.50 and 101.50 by expiration.
Ike Iossif
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