Last week there were 13.8% more bears than bulls, which pretty well matched the maximum spread in over a decade only reached at the end of the bear market in October 2002. By narrowing to -4.4% today, this indicator has issued a buy signal according to Investors Intelligence.

Gold promptly corrected after breaking the $1,000 barrier. After the price moves down enough to change it from green to red, it usually rises for three days or so before continuing the decline. If the equity correction is over, the US$ could strengthen which could hurt gold prices. Theses short-term charts should only be used in conjunction with other tools.

Just look at the far right of this chart. These short-term charts are helpful when used with the longer-term indicators. According to other tools, it looks as though the equity correction could be over. If that is the case, the markets should pause for three days or so since prices have risen enough to change the indicator from red to green. Then the advance should continue. This is just the opposite of what is happening with the gold chart.

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