The XAU.X has traded right up to a level of horizontal resistance this morning and with higher bond prices (lower yields) and little sign of inflation, the action in the XAU smells of panic. Traders looking for a "selling climax" might not have long to wait. We'll add this and some of the items we pointed out in the 10:30 EST Update to the list of reasons to start looking for a turnaround and another indicator to add to our watch list. The pieces of the puzzle are starting to arrange themselves and we'll be looking for these pieces to start falling into place before getting long.
Dow Industrial Chart - last eleven months.
Support for the Dow is horizontal and we've got our first level near 10,250, which correlates with some levels we pointed out in the supply/demand charts earlier. We'll want to watch that level and look for a reversal at that time (if it ever comes). We're not stepping in and buying everything in site if 10,250 is achieved. That would be a huge error in our trading strategy. We will however be eyeballing and buying some strong stocks near support. If they begin working and building profits, we will then become more aggressive with our buying in similar situations.