A reader was interested in seeing how the True Strength Index (TSI) indicator behaved during the time period of the great 1980 gold parabola and this post will provide some charts with that answer. I also am posting a chart I made a couple days ago which includes, in clear detail, how the US Dollar behaved just preceding the final leg of the great gold parabola in '79/'80.
This first chart presents the '79/80 chart with the TSI indicator in the lower panel. I have drawn in the TSI buy and sell signals and identified the dates that correspond to our present 2011 daily cycle.
This second chart presents our current 2011 price performance of gold. I have drawn in the TSI buy and sell signals and identified the dates which correspond to the critical daily cycle in 1979. Of course, our current daily cycle is still in progress and expected to conlude in 6 - 10+ trading days.
This third chart is a collage showing the 1979 US Dollar, 1979 Gold and 2011 Gold.
The 2011 Gold chart, while blue, is the actual data as of a couple days ago. The purple line is a future projection based on exactly replicating the '79/`80 parabolic. I did this by aligning the two charts (as above) then adding to the 2011 chart the same percent gain/loss achieved in '79/`80 on a day to day basis.
I have also done the same study with silver and using the same technique of projecting future price. Just for giggles, here is what that looks like.
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Mr. Townsend, so your study is telling us the big final run up for silver and gold should develop from the last quarter of 2011 to the first quarter of 2012?, would you expand on this please...very interesting analysis, thank you.
ReplyDeleteCampagnolo - i updated the 2011 gold chart above your comment. It projects gold to peak on December 8th at $3937 - provided it continues exactly as the '79/'80 parabola.
ReplyDeletejohn, does that mean time to sell DZZ?
ReplyDeleteAnon - I'm not selling my position in DZZ just yet. I am all but certain the $1705 area will be tested soon. I have a GTC sell limit order in place at DZZ $5.00 and as we get closer to Gold $1705 I will have to think a little harder on just the right price for that GTC order to sell so that it is triggered a bit above $1705.
ReplyDeleteBTW, if gold does trade below $1705 I will just rebuy my DZZ position and hold for the D-wave as best I can. But I am having a difficult time, for lots of reasons I have cited in my posts, believing that gold's top is already in and the C-wave is over.
Great work John, a conclusion of this C wave like in 1980 means the end of Gold Bull Market?
ReplyDeleteAnon - no, I do not think this would constitute the end of this gold bull market at all. There should be at least one other ABCD pattern after this one concludes.
ReplyDeleteGold at $3937 would put silver at $89 with a GSR 44:1. That would be cool.
ReplyDeleteHi John,
ReplyDeleteLooks like you finally sold TNA today at $45. So, you don't think that we can get to $70?
Anon - $70 is possible if Ben declares this week he will print any amount of money necessary to bail out Europe.
ReplyDeleteHi John,
ReplyDeletewhat is ur downside target for GDX and do u see this for this coming week?
Thanks for the charts especially the 1979-1980 gold chart. I've been using the 4-hr TSI as my primary indicator for trading mini silver futures and I've only done OK because I let my opinions get in the way a lot but it has at least kept me out of the big moves down. It's amazing how well the TSI indicator works, if only I could utilize it correctly. Looks like we might get a daily trendline break in gold and silver by tomorrow.
ReplyDelete