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Another sideways session\? Not for gold!

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After a plethora of economic data before the opening bell, markets dipped lower after a marginally higher open, then turned red, only to move back to unchanged levels and for a third straight session, give traders little sense of direction.

One sector breaking some significant technical levels are the precious metals stocks and the Gold/Silver Index (XAU.X) 72.44 +2.63% with a trade at 72.00, which has this sectors $1 point and figure box scaled chart triggering a spread-triple-top buy signal at 72 and also making a firm break above its bearish resistance trend. We discussed this sector in recent sessions and "gold bugs" wanted to see a break higher at 72.00 and they are getting it today.

Gold/Silver Index (XAU.X) - $1 box

In recent months on an intra-day basis, we've made note of the XAU.X trading the $71 level and thought $72 a critical level the XAU.X needed to trade for "gold bugs" to build thoughts of higher prices in the sector. Today's trade at 72 has XAU.X giving spread-triple-top and breaking above trend. Sector had a nice move higher back in August from 68, when XAU.X broke above trend and gave triple-top buy signal.

One stock I like in the group is perhaps one of the sector bellwethers in Newmont Mining (NYSE:NEM) $27.70 +2.62%. Yesterday's trade at $27 had NEM triggering a double-top buy signal after recent test of upward bullish support trend at $21. Newmont's p/f chart is currently bullish and building its bullish vertical count column which hints at $36. The first sign of trouble would be a trade at $22, which would be a triple-bottom sell signal. I like 1/2 positions in the June $27.50 calls (NEMFY) $4.00.

Jeff Bailey

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