Gold given another knock, the Comex reminds me of a bank robber in a town with a crooked Sheriff. Later I'll go into why gold is often taken down at the end of each month during options expiry. What it is like is, you buy tickets to a show, and the show is cancelled, and they keep the money.
ORT update a week later
Last Friday I discussed two stocks kicking at the door .. First MEI broke Monday, now ORT Friday. Because of the massive shorting of ORT it is in the best interests of some to contain the damage-- short more and go deeper in risk to protect an already very risky position--so one never knows what close will be like after an intraday bust out. This stock hit 2.90 today. Notice the punch up in volume (gray bar). Volume is very important in technical analysis. Without it, moves upward should be considered very, very tenuous.
The price close at the end of the day matters far more than intraday swings to the chartist; here a close above the 50 day moving average of 2.71 could .. I say could ... give it some traction. But am aware it closed above the 50 day a month ago and then was worked down from there rather relentlessly. (* Note: it closed at 2.82).
Candlestick a month ago (start of November) at the peak looks like a '+' sign is called a spinning top. And given the large rise the day before, the spinning top indicated trouble ahead. Why, because previously the buyers were in control, and the spinning top shows the buyers grip slipped, and indecision reigned. The following day confirmed the bearish pattern as the sellers grabbed control. What followed was a period of bearishness lasting 2 weeks.
Other charts to look at, RSI and MACD, two of my favorites. The top one is the RSI. Once a stock enters 70+, everybody gets antsy, it's over-bought, and a stock almost never stays above 70 for long. Couple weeks, maybe. So it has a little room yet. Conversely when stock drops under 30, it's over-sold and people start getting antsy again, wondering if they should buy. It should be noted an over-sold stock can stay over-sold for longer than some people can tolerate, or can become even more over-sold before the sentiment changes.
On the bottom chart the black meandering line crossed the red today. What does this mean? The chart is the MACD, and represents price momentum. (think 'rate of change'). The red line is called the trigger. It represents a calculation of momentum weighted according to a formula. The black line is a momentum calculation too, but weighted towards more recent numbers. I'll dig up the formulas later. Red, weighted to older numbers, black newer numbers. So if the black crosses the red from below, it means the momentum weighted towards recent numbers is increasing, and also better than expected. Crossing the trigger from below is considered a bullish signal. Crossing the trigger from above is considered a bearish signal. I will discuss the MACD more in the next entry.. such as those blue bars.