Thursday, August 11, 2011

Game, Set & Match for Gold

I have been waiting for confirmation on the daily chart of Gold from the True Strength Index (TSI) indicator and minutes ago I got it.

If gold should bounce back up to new highs, which is always a possibility, it will likely give a additional negative divergence SELL signal. But more likely, once the parabola pops, it pops.

Anyway, gold today was on Day 28 of it's daily cycle and overdue for a top. The usual daily cycle, from trough to trough, generally is in the range of 20 - 24 days. I have yet to see a single parabola that did not at least retrace the parabolic phase rather quickly. If that turns out to be the case here, gold could find itself at $1665 or lower rather quickly. After that, I guess a new daily cycle will begin and if this was the top of the C-wave, gold will not rally for long before turning south once again.  Time will tell.


  1. Hi John,
    Hoping it goes the way you are seeing it as of now.

  2. At last!
    Gold certainly did behave as though it had finally exhausted itself today.
    You could almost feel it.

    I'm selfishly bummed that school will be starting and we'll soon be seeing fewer reports from you.
    I don't often comment, but I ALWAYS read your posts. You are a gem!

  3. Hi John,

    Great call using the TSI. The price needed to stay above 1725 to prevent a further breakdown. It's bounced off this level and recovered a chunk. Possibly will see this breakdown further early next week and fill up that Aug 8 gap.


  4. John,
    Between Gary's web site and yours I've been learning a lot about cycles. whether it be gold, stock, ect.. I very interested in learning more, any recommended books or web sites that you would recommend that explain cycles.

  5. John,
    Another question, Gold is due for a daily cycle low in the next 5-10 days, How do you know when low has formed? Can you use TSI for this?

  6. ckpc - you are bummed and I am extremely bummed that school starts for teachers TOMORROW!

    Anon - I don't know that it was a great call, but when silver's parabolic popped recently the TSI told me 5 times to Sunday that the party was over - and somehow I did not really believe it. Maybe this time I will listen to the TSI and get it wrong. Hey, at least I have a 50/50 chance, right?

    Harry - everything I know about cycles I learned from reading Gary's thoughts day in and day out for the past 5 years or so. I am not aware of any books to recommend, but I'll betcha Google has lots of ideas for you.

    Gold, daily cycle low and TSI: yes, the TSI does a very good job of spotting the daily and intermediate cycle lows. Of course nothing is flawless, including the TSI, but it is extremely accurate, nonetheless.

    Look for the significant spike lower in the indicator that then sharply rebounds. Once in a while a followup push to lower price then occurs and the TSI dutifully records a positive divergence BUY signal which then marks the spot.

    Examples of the sharp spike with sharp rebound include: 6/13/11, 3/16/11 and 1/27/11.

    Examples of the positive divergence marking the bottom include 7/1/11, 3/24/10 and 2/5/10.