Technical Picture - Gold Coiled

Based on the mid-day reversal action yesterday and the maturity of this rally, I thought the market had the potential to sell off today. Instead we got low volume consolidation action. The failure to follow through to the downside (on a Friday) increases the chances that the market will continue working/grinding higher in the near term. When the market does not do what you expect, change your expectation.

The current trend is still up in the NASDAQ and S&P with both trading above their respective 20 SMAs, and the 20 SMAs are above the 50 SMAs. The McClellan summations are trending up. The VIX daily has an "h" patten that implies the current support level may give way. Gold is coiled up and ready for range expansion.

Looking through individual gold stocks, you will see several nice "h" patterns on the daily charts. Here are three such charts with the "h" marked on AEM. Notice these gold stocks are trading below the 20 SMA, and the 20 SMA has crossed below the 50 SMA.