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Barrick Gold Chart - 60-minute interval.

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Right at 10:25 EST, our alert on shares of ABX was triggered with a break below $14.13. Seconds later, the XAU.X alert was triggered on a break below $44.60. With two alerts triggered to the downside, there was only one thing left for traders to do.

Gold/Silver Index Chart - 60-minute interval.

One, two, three... is the XAU going to 43? We're not certain, but it looks plausible. On Wednesday, one of the bearish thoughts we were having on the XAU.X (we had some bullish thought too) was the overextended nature of MACD. If this indicator crosses over at these levels, the 43 area certainly could be achieved. Traders will notice how the XAU.X has shown more technical weakness than ABX. What this tells us, is that relatively speaking ABX is stronger than the sector at this point. With this in mind, we are now observing that if XAU.X gets bullish, then shares of ABX would probably be at the top of our bullish play list in the group. As traders, we'll be looking to cover in shares of ABX as soon as strength begins to occur in the XAU.X. If ABX begins breaking to the upside, it will probably be a leading indicator to a bullish move in the XAU.X and we can act accordingly in an XAU.X bullish play. We'll use one against the other to make money. Either now, or down the road. The key will be to keep one loss small (if we lose) and have one nice gain. We may only "bat .500", but our account should grow in value. How much does a .500 hitter in baseball make anyway?

NASDAQ Composite Chart - 60-minute interval.

The bearish move in the XAU.X and ABX is actually a bullish move in the scenario we outlined on Wednesday regarding the 30- treasury and Gold/Silver. Look how the NASDAQ is responding here today. Hmmm, that scenario of the relation between the XAU.X and TYX.X seems to be holding some water today. We've changed the color of your support/resistance line from green to red to show traders where the NASDAQ is currently trading. Watch the NASDAQ here, and then correlate what is taking place in the XAU.X over the next couple of days. This relationship will help traders manage their positions for the next couple of trading sessions.

-Staff Analyst

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