GoldMinerPulse: Market Sentiment Track Record

Chart for 8 February 2013 market close.


GoldMinerPulse Market Sentiment Metric Track Record

15 February 2013 Call After Market Close: Up trend from 20 December 2012 Confirmed

A bullish divergence between the MS and the POG developed on 11 February 2013. The week ended with an upward spike by the MS while POG dropped relatively. A previous powerful MS spike happened for the week ending 27 July 2012 and marked the begining of a positive period for gold and silver equities. Trading in gold and silver equities over the next few weeks will confirm the value of the MS as a leading indicator for timing entry/exit.

For the 27 July 2012 spike, the POG did follow the MS direction wise. For the week ending, 15 February 2013, POG broke downward. This might be a cause of concern, but is, I believe, mostly explained by the fact that the Chinese gold market, a strong consumer of physical gold in recent months, was shut down for new year / spring festival -- as of 15 February 2013 the last price update available at the Shanghai Gold exchange was still 8 February 2013. Chinese trading returns to normal this week.

A break in the MS below the 31 January 2013 and the 7 January 2013 MS lows would call the current up trend interpretation into question. A failure in a recovery of the POG would put MS chart interpretation into a condition not seen within the time frame featured in the chart.

The Kitco Gold Survey of market participants completed 15 February 2013 has 48% of the participants bearish while 36% are bullish. Taking the Kitco survey results as a contrary indicator suggests next week is more likely to be bullish.

TSX Gold Equities Market Sentiment, 15 February 2013

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