I have gained an enormous amount of respect over the past couple of years for the consistently accurate technical work of Michael Oliver. I certainly do not suggest he is infallible, nor does Michael himself believe he is. But I have not personally found anyone who is more helpful to me in holding firm in my investment decisions from a longer-term perspective than Michael, which is why he is on my radio show almost every week. Michael let it be known on my radio show as gold was heading toward $1,100 that unless it dropped below $1,119 by month end he would remain solidly in the bullish camp, even though a growing chorus of technical analysts were strongly suggesting we were heading to $1,000 or below! And what if gold dropped below $1,119 by month end? In that case he would remain neutral because his longer-term indicators tell him in virtually no uncertain terms that a new gold bull market has been born. So where does that leave us now? Here is what Michael sent out to his subscribers toward the end of the trading session today.

Gold crossed it having already bumped smoothing line last week (close was at $1151). Surge this week reached $1183.80. We suspect that before this rally encounters resistance it will fully challenge the horizontal line, just above the zero line/10-wk. avg. For next week or so that suggests resistance up in the $1190-$1200 area. Ultimately if that red horizontal is bumped and generates a stall or back-off, it then becomes a major trend structure. Overcome it, perhaps after a fight, then a much larger, more potent upside signal is given by this weekly oscillator.

Note: The brief but sharp upside spike prior to and immediately after the election occurred in many markets, in one direction or the other (including in S&P500 futures – in the dark, the post-election action sold off dramatically but briefly) when much of that across market price movement was false and brief. But overall, gold shows a similar behavior of respecting the smoothing line on any first hit against it. In a second move to attack that line there is often a crossover as there was a week ago.

For now gold is positive on this intermediate indicator with MSA expecting resistance to show itself just above the 10-wk. avg. (around the red horizontal).