Those of you who read the postings here may remember a post I made last week indicating the probability of a minor pullback of the pog was likely to occur short term based upon market indicators and the fact that the daily lows of the previous days was greater than the 8 ema - leaving a gap.  I stated that typically whenever a “gap” such as this takes place, the momentum was diminishing and the odds favored a retracement in price to where the daily low removed the gap.  When this occurs, the 8 ema should be viewed as the first level of price support, followed by the 21 ema as a secondary price support.  During retracements such as this one should also view the prior high - 778.30 - as horizontal price support and one should also draw a lower channel support line as an additional level of support.

With the retracement at this stage of market development one can and should expect to witness a move lower in the MACD and the RSI.  For the MACD, the zero line is support and for the RSI, the 50 line serves as support.

The key setup to be watching for at this stage is the next reversal higher in the value of the MACD.  This will be preceded by an improvement in the MACD histogram.  This may take several days to evolve but when that reversal does take place, going long the market becomes a lower risk decision to make.  Should the price then continue to rally which is usually the case - not always - then once the most recent high is taken out - 834.50 - the risks are lowered substantially.

Therefore, the action we are currently witnessing in the pog came not as a suprise but just the next phase of the evolving market.  Will should know shortly if this retracement will mimic former retracements under similar conditions.  If all of the supports mentioned above are by chance taken out, then the probability of a further decline to the previous low becomes highly probable.  As a result, we are now at a point of wait and see.

The fundamentals remain positive for an advance higher yet at this time the technicals are currently directing the movement of price and you can be sure that TPTB are using the technicals to increase their manipulation efforts here short term.

NIA

Steve