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[arthur]

Fibonacci levels tend to work better for indices than individual stocks. However, NEM has been the gold leader (XAU gold index doesn't record volume). Gold stocks had a severe correction in early 2004 and then rallied most of last year. However, NEM is already going through another correction. NEM closed just above a previous low (see circle). Next major support is at the 38.2% Fibonacci level at 40.54. Next major resistance is around 42 1/2 (50% Fibonacci level and 200 day MA). However, there is also a gap to close at just over 44, which is also the 61.8% Fibonacci level and the 10 & 20 day MAs. Gold typically moves for several reasons: 1) As a hedge for inflation, 2) As a hedge for the depreciating U.S. dollar (since gold is priced in U.S. dollars on the world market), and 3) As insurance against negative global shocks.