- Reaction score
- Here, There, and Everywhere
Original unmodified chart with commentary here.
Here are my latest thoughts on gold.
Yellow line: Will inhibit higher gold prices until DECISIVELY penetrated.
Blue line: Will force gold prices up until either the yellow line or blue line are penetrated.
Red line: Apparent maximum downside potential for gold prices.
If gold prices tend to HUG the blue line on their way up, then the break will be to the DOWNSIDE, with a maximum downside potential at the red line.
If gold prices shoot up to the yellow line, then bounce back to the blue line and stop there, gold prices will most likely penetrate the yellow line, decisively ending the current short term down trend. Should that happen, then $2000 gold prices are very possible in a few months.
My gut feeling is that the yellow line is currently stronger than the blue line, therefore we will probably see lower prices return for a short while.
Typically, when prices far exceed a previous record high, prices return to that previous record high, and stop near that price. That has not happened in gold yet. In 2008, prices did exceed the previous record high but when they crashed, they did not stop at that high, instead stopping significantly below it.
Therefore, watch gold carefully. If it cannot maintain prices above the blue line, then the yellow line will push prices towards the red line. If that happens, look for prices to bottom out at the red line.
Yes, that is extremely contrary to what is said at the above link. Eventually we will see whether my analysis of the gold chart holds water or not.