In mid September, the fall foliage season begins here in Colorado. This is when Colorado's famous aspen leaves change to a brilliant yellow-gold. Hundreds of groves of slender white barked aspen trees cover the slopes in Rocky Mountain National Park amid a majestic evergreen forest. Their luminescent leaves shimmer or quake to the slightest breeze and their golden colors are a beautiful introduction to autumn.
The fall season is indeed a time of change in the gold and silver markets when typically the greatest gains in gold and silver stocks are usually achieved. It is also a time for reflection for what was and what will be.
Here at Market Pendulum, our goal is to add to our premiere long term positions in any personal or model portfolio when low risk entry points occur as defined by our leading metrics, the Trend Directional Indicator (TDI) and Gravity Center (GC) indicator. We primarily use the weekly indicators for potentially larger gains while keeping an eye on the daily and monthly. For additional information on these indicators, click here.
XAU Weekly:
Recently, the XAU has been in a strong uptrend on a weekly basis. The Trend Directional Indicator (TDI) has been in an uptrend since mid August. The SRA cycle indicator, overlaid on the chart, is rapidly closing in on a high point. In addition, the price is some distance from the indicators so a significant retracement to those trend lines might be expected shortly. The Gravity Center chart (not shown) confirms the analysis.
Weekly XAU Index - Trend Directional Chart
The good news, however, is found in the monthly TDI chart below. This reveals that any potential decline will likely be contained within the parameters of the general longer term uptrend. This monthly chart has been error free for 15 years.
Monthly XAU index Trend Directional Chart
Summary:
Seasonally, we are in the strongest part of the investment year. The daily, weekly and monthly XAU charts are in a positive alignment. Any significant retracements would offer a timely autumn gold entrance into the strongest gold and silver stocks.
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