This is a daily chart of the World Gold Index (XGLD) spanning the timeframe of the previous intermediate gold cyle begun July 28 to our present day.
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Click on the chart to ENLARGE
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Yesterday gold reached $1441 and appears to have peaked on day 22 of the current daily cycle.
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The first daily cycle of the previous intermediate cycle was only 19 days and concluded with a very brief touch of the 20 dma. The following daily cycle concluded in 25 days with again, a very brief touch of the 20 dma.
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If the current daily cycle were to conclude in similar fashion, with a touch of the 20 dma, price would likely fall to somewhere around $1385-1395. And likely bounce right back up off that price level.
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So perhaps we get a vicious spike that acts like a bolt of lightening (ala 9/28/10) or it takes a few more days to saunter lower, the next daily cycle should be starting shortly thereafter and take us to new all time highs.
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Sounds exciting john! If you can spot it, let us know when the cycle low gets close =)
ReplyDeleteThe way things went today, it would not surprise me if yesterday was the daily cycle bottom.
ReplyDeleteI am going to do some review of my previous research of gold's 7 parabolic C waves, but my recollection for now is that once price gets past the midpoint consolidation - which we now have accomplished - gold and silver just go up in breath taking fashion.....with little time devoted to correction via cycle bottoms. I'll look into this soon and write about it.
John, for someone with a regular job you do remarkably well with this hobby ; )
ReplyDeleteGold doesn't appear too frothy yet, but silver looks outright manic. Any idea how we can tell when the risk/reward level gets too high?
Thanks Rick for an interesting question. I plan to write an article later this spring titled, "How to Game a Parabolic Top".
ReplyDeleteBut until then, some of the techniques one should consider are price's height above the 200 dma, completion of the T1 pattern and of course, a trend line break of the TSI indicator.
The T1 pattern is simply an upleg rally, midpoint consolidation, and concluding upleg rally that is roughly equal in length with the first upleg.
The height price rises above the 200 dma is compared with the same of the previous parabolic moves of gold and silver. Offhand I recall that that number is 65% for silver but I would have to check my earlier research for gold to recall the %.
Hi John,
ReplyDeleteI am amazed with Silver's out-performance on Gold. Do you have an intermediate target for Silver before a sizable correction? And how will that corresponds to AGQ?
Thanks.
Hi Fung -- on a weekly basis I am thinking silver will just put in a strong of green candles until it blows up at the parabolic top. At least that is how the 3 previous silver parabolas worked out (2004, 2006 and 2008).
ReplyDeleteAGQ should end up reaching something just ahoer of $300 - but possibly higher. If silver reaches $50, that is 42% higher than current $35. So, 84+% more to go for AGQ.
Thanks, John.
ReplyDeleteSo that means if Silver gets to $50, AGQ could reach $377!
Wow!