Sunday, January 08, 2006

WEEKLY MARKET REPORT; Sunday, January 8th, 2006

*Gold & Silver Report*
Gold and Silver Skyrocket!

Executive Summary: Gold, silver and gold stock investors were seen jumping for joy in the streets this week when gold and silver soared higher on Friday following a severe correction on Thursday. Gold finished at $538 up $23, while silver closed at $9.08 up $.28. The XAU move was similarly spectacular as gold stocks stormed to record levels, closing at the weekly high point.

Gold Stocks ($XAU)
Short Term: The $XAU exploded higher, leaving 2 gaps: Daily Chart.
Medium Term: In the weekly chart, the $XAU closed at its high point: Weekly Chart.
Long Term: The fundamental argument for a bull market in precious metals and the $XAU remains sound. Rising interest rates are common during gold uptrends, e.g. rates rose during the 1970's bull market. The $XAU is above the neckline of a bullish: H&S Pattern In The Monthly Chart.


Gold, silver and gold stocks are re-testing the highs from the peak formed one month earlier. Junior gold and silver stocks appear more attractive due to the lack of participation in the recent rally. The former precious metals forecast has been fulfilled: "..expect the next few months to yield $500+ gold, silver in excess of $9 per ounce and an $XAU price of 135." Although we are overbought at the time, the market appears to have further upside in the short-term. Thanks for reading, Chris Waltzek.

For additional gold and silver analysis: Jim Puplava, Jim Sinclair, Clive Maund and The Schultz Gold Stock Index.

*Stock Market Report*
*Stocks Near Range Lows*

Executive Summary: The Dow Jones Industrials reached the upper point of its trading range while the S&P 500 and Nasdaq broke above the previous resistance levels, this week: (click to view the charts) Nasdaq, Dow Jones, S&P, Dow Transports, and Semiconductors. Market volatility remained tame: $VIX and $VXN. The price of oil rocketed higher this week leaving a huge gap unfilled: 62.86 per barrel. The dollar was range bound following the surge higher two weeks earlier: Dollar Chart.

MARKET OUTLOOK: Although the S&P and Nasdaq moved above their previous trading ranges this week, the Dow Jones did not. A break above resistance in the Dow next week will confirm the new market advance. Chris Waltzek

Trading Coach: Never risk more than 2% of account equity on any trade - determine position size using protective sell stops. For daily trend updates: Click Here. Robert Colby's Daily Market Update: Click Here.