Here's an update of Friday's closing signals on the ALPHA model, which has recently been dominated by the gold and silver ETFS...GLD and SLV.
The model has clearly been hit by the expected reversal in momentum following a dramatic parabolic (and profitable) rise. The good news would appear to be that the metals are beginning to look oversold...with the P6 on the 3 month chart now below the RSQ equity line and the TrendX P6 signals approaching the zero line. However, the word "beginning" must be emphasized. Based on the behavior of these technical signals in the past we should expect continued weakness before a true buying opportunity presents itself in these 2 ETFs.
To confound these expectations Jim Rogers, arguable one of the greatest commodity traders of all time, recently voiced the opinion that gold is in for a more substantial retreat than most traders may expect and he forecast a possible low at the $1000/ounce level (currently around $1300). As if to reinforce that forecast here's a recent article from FUTURES magazine that makes a similar look forward based on a supply and demand perspective.