PM Daily Market Commentary - 2/11/2014

davefairtex
By davefairtex on Wed, Feb 12, 2014 - 1:43am

Gold closed up +16.40 to 1291.10 on heavy volume, and silver closed up +0.16 to 20.22 on heavy volume also.   The gold/silver ratio rose again +0.31 to 63.87.  Gold rallied soon after trading opened in asia, spiking above the 1280 resistance level "in the dead of night" (i.e. at about 9:30am in Tokyo) and continued rallying further, closing near the highs at the end of the day in NY. 

Gold has now clearly broken out, and the close near the highs (rather than simply a brief spike higher) along with the heavy volume is quite bullish.

Silver remains a laggard, still below its previous spike high of 20.67 by quite a bit.  Silver mining shares (SIL) are doing fantastic even so, actually outperforming GDX by a small margin.

The USD finally found some modest support, closing up +0.02 [+0.02%] after testing the 80.50 level and rallying.

GDX had another fantastic day (gee, making money buying gold mining shares is so easy) closing +3.85% on heavy volume, moving through its 200 day MA for the first time in years.  GDXJ did even better, +4.68% on even heavier volume than yesterday, with GDXJ also through its 200 MA.  Rallies on ever-higher volume are a very bullish sign, and that's what we are seeing in the mining shares.

No signs of distribution yet in the mining shares, so no reason to sell.

The SPX was up +1.11%, rallying for the fourth straight day, moving through the 50 day MA as if it weren't even there.   The rally stopped at 1820, a previous support level now turned into resistance.  Volume is still relatively lower on the up-days than on the down-days, but price continues to move higher.  Those wanting to go short need to see this rally fail before making new highs.

 

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