See charts below with an On Balance Volume indicator and the Money Flow Indicator using a 13 period
This week I have changed the chart for the candle stick devotee's. Looking at the chart above you can see the OBV has blasted to new all time highs, (blue dotted line). However the MFI is in overbought (OB) territory , again see the blue dotted line. I dont see a problem with that. As often mentioned the MFI is a more dynamic indicator and it can stay in OB territory for some time before correcting. EG: look at July 2021.
My week was interesting. I hold mostly small and mid cap stocks and my portfolio went sideways. It was a week for the Gorilla stocks, Gorilla stocks mainly in Resources and Materials. Other sectors seemed reluctant to join the rally so perhaps some disbelief about the market amongst investors still prevails. Even gold stocks, despite the recovery in the gold price, seemed reluctant to join in.
However!
I notice a big rally in gold stocks (lithium, copper and uranium too) last night in the US so Monday on the ASX will be interesting. Those stocks should take off like an Elon Musk rocket - but we all know sometimes those rockets fail :) Some more comments on Gold below.
I have reposted above, an updated version of the gold chart that I posted last week. Also here are my comments from last week...
"Looking at the chart above I have included the Fibonacci - taken from the breakout at long term resistance at 2050. I am not particularly a fan of any dead Italian mathematician, but it does show something important.
The amount of pull back the trend has. Also, it's a line chart, so much easier to read are they not?
As you can see the price has hardly retraced and this is important - for it shows how keen the buyers are, not wanting to wait (FOMO) for more falls before getting in.
Why?
They are AFRAID the price will rally without them so they do not let the price dip much at all. So, I intend to add to my gold stock positions next week, wish me luck!"
So, FOMO did not really kick in for many of the gold stocks last week, lets see if it does this week. The reason I am focusing on the gold price is that when gold rallies, often does the resource sector in general - as seems to be happening now. Also, many gold stocks also mine copper and I would be surprised if you have not heard the constant talk about copper demand.
So much happening at the moment I could write a lot more but soccer duty calls (as I write on a Sat morning),
have a good week and see you back here next week!
PS: The book Zen Trader has been offered a Taiwanese publishing contract to be printed in Traditional Chinese. This means the book will now circulate through all Chinese speaking countries except the mainland (which may still happen as a result of this offer). Of course it's still a huge market without the mainland and I am pleased to announce this is now the 3rd other language (the others being Spanish and German) apart from English that the book is now produced.
Thanks again to all who have purchased the book to make this possible.
Regards
Peter