See charts below with an On Balance Volume indicator and the Money Flow indicator
Last week was quite a rally. I wont go into details as to why as I am sure many of you have read or heard the reasons. Focusing on the now it appears the index is approaching some resistance. The OBV is trending up well but it has not reached the high it made it January. Last week I mentioned a slight divergence between the price and the MFI. That divergence still exists and considering the rally the question needs to be asked "will we get a pause?" If market prediction is about probability I would think the answer is yes. Gold stocks.........
I often get questions about the gold stocks and I too find this an interesting sector. The price recovered strongly this week from an earlier pull back. The MFI is back testing the trend line, but - I would really like to see that OBV get stronger. Until that gets a clear break to the upside I think gold stocks will remain in a sideways pattern. Gold stocks do not always respond to a rising gold price, it depends on other factors such as general market strength, interest rates, the US dollar, inflation and others. It remains to be seen if the stars align for a Xmas gold stock rally.
Until next week
Peter