While most 4th rate analysts unwittingly misdirect you into watching for a big dollar collapse and cling on to its alleged correlation to gold, all you have to do is look back a year and see their relationship is worthless. The gold trade has been an obvious disappointment and its most recent breakdown through 1320 has brought about a ‘think tank’ infested with analysts fetching for all sorts of reasons that seem rational for calling a bottom. None of which are true--and of course these same analysts that tell you to keep an ‘open mind’ are the ones mentally blocked from knowing the characteristics of a downtrend. And they’ve been sending you emails and newsletters for months saying this “JUST MAY BE the TIME” we have reached the final low!
As you all know the reality has been much different, with every rally being met with tremendous selling pressure, giving you no indication of a possible bull market. Did you ever think that once the bull gets underway and reaches 3200, they will all tell you it’s time to get out?? The same crowd of forecasters that were keeping you in at $2000 have ridden the bear “A L L- T H E W A Y- D O W N” to these current levels, still claiming every oversold condition is just a pullback to a much bigger uptrend! I’m sure after 22 months it will be that ‘conspiracy theories of manipulation’ or some ‘finishing wave count’ are the reasons.
Truth is, once you break the apex and have a lower low you add the width of the triangle from the breakdown point to get the measured move. This shoots for a price target of 1200, which is a minimum expectation, but perhaps on the next failing rally we will see a climax low to 1140.
CHART OF GOLD (1)
That also would have price return to the 61.8% area from the lows of 2008 to the highs of September 2011 and a good place for an extreme reversal bar to appear.
Chart of Gold (2)
Here too is a potential fold back measured move from the point the trend went parabolic in 2011, to where we are now in the current downtrend. Notice that the parabolic uptrend of 2011 equals the parabolic downtrend of 2013 in size and that it happens to fall in the vicinity of these same target lows. Not to mention, the downside volume is now much lighter which is a sign that most of the selling pressure is being absorbed by central bankers and giant institutions controlling the demand.
Most people lose money in downtrends because they have no strategy, they become instant long term buyers, and, they must ‘wait it out’ only to recover 70% of their losses, if they’re lucky. Timing the market is not the same as ‘time in’ the market and you should know that after a price base of 4 to 5 weeks your odds of ‘a bottom’ is more likely. Or basically draw a horizontal line from 1200 out, and even with giving five or so percentage points to account for volatility it won’t be a surprise to see in a couple of weeks that price will be trading flat. We are hovering above extremely tough support on all time frames, and once 1350 is regained, the bull market will launch!
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