Based on the technical statistics that I receive from Lowry everyday it would appear that the recent rally from the June 8th lows was a result of a lack of supply rather than from aggressive buying, and therefore another test of the May 25th, June 8th low seems likely. On the other hand, and more important, the longer term indicators (based over the past fifty days) are inconsistent with a market that is entering a new bear phase. I am looking for another test and then a resumption of the cyclical bull market that started in March of ‘09.
The tactical moves of increasing our hedges and adding to our gold positions have buffered the latest downdraft rather nicely. I look forward to reducing our hedge positions when I am convinced that a new intermediate leg up is in place.