This thread will most likely not be too controversial, but I believe nonetheless it should be posted.
We know historically in the markets when something goes STRAIGHT UP or STRAIGHT DOWN that this is a preceding move to another violent move the OTHER
Such was a case in the market earlier this year, and I believe this is happening in GOLD right now. I am going to convince you of this by using:
1. Historical price movement
2. Linear Regression
First, this is
a) a WEEKLY CHART of GLD (Gold ETF - tracks very accurately)
b) from late 2005 I believe until present
This is very simple, only a couple things to look at.
1. The 3 lines are the model for the linear regression setup. You will notice back in 2008 when we touched the top linear regression resistance we
took about a 35 pt loss from 100 to 65 area
2. The green lines
- Top one is the first price target - right around 100, now notice how this intersects the MIDDLE LINEAR REGRESSION LINE and the SUPPORT from the
- Bottom Green Line would be the place of last support for this current rally in gold. Notice how this area as well coincides with a lot of
consolidation from late 2008.
Now I am far from a "gold bug" but I do not see this rally ending in gold, even though I believe we have hit a big resistance here. In the coming
weeks we will find out how strong gold really is. It has been in an enormous rally, and like everyone knows, no one knows the future -
The last correction was 35% - but this one IMO will be less as it coincides with the BOTTOM LR Line and the CONSOLIDATION from late 2008 (support from
Anyway, just food for thought before any of you decide you want to put all your piggy bank in this commodity which I have been seeing a lot lately. A
lot of false reports etc. (IMO) that go along with this as well to lure RETAIL into gold, that scares me - should scare you too. Does anything think
China will keep buying gold at historically high prices?? Maybe, and maybe gold just keeps going up and up and up and up - but lets be real - so just
be careful is all.
Here is the chart