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Patrick MontesDeOca
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Published Technical Analyst, Author, Commodity Trader, Systems Developer, Algorithmic Intelligence, Computer Modeling of Processes. I custom build Proprietary Artificial Intelligence for each individual client's portfolio needs. After more 30 years in the business, Patrick MontesDeOca has... More
My company:
Equity Management Academy
My blog:
Trading Talk
My book:
Vedic Codes of the Stock Market Volume 3 – ETFS
  • This Revised Special Edition For The Gold 2012 Mid Year Cycles Report 0 comments
    Jul 15, 2012 5:27 PM | about stocks: PSLV, GDX, AGQ, AG, SLW, PHYS

    By Patrick MontesDeOca

    This is the 2012 Revised Special Edition for the Gold 2012 Mid Year Cycles Report. On this report we will take a look at what the gold market has done for the past 7 months and what we can expect for the remainder of 2012.

    In using the weekly chart, we can clearly identify a long-term descending wedge pattern. According to classical technical analysis interpretation, this is a very bullish pattern that identifies the end of a consolidation period and a major change in the trend or cycle pattern.

    The pivot point confirmation of a bullish breakout would be a decisive weekly close above the 1.600 per ounce levels for spot gold. This would put into perspective the next levels of monthly resistance between the 1.627 and 1.662 levels.

    Breaking above these levels, it enters a different price fractal projecting the 1.750 to 1.800 levels as a potential target and eventually the all time highs made in 2011 above 1.900 per ounce.

    With the VC Monthly Price Momentum Indicator at 1.590 it confirms the bullish uptrend is intact.

    Let's take a look at what the yearly cycles or energy patterns are forecasting in 2012 by using the chart below provided by www.ewc-trading.com.

    The Highs for this period:

    According to the VC Price Energy Momentum Indicator, the upper end of the vertical axis indicator above 8 begins to get overbought anything above 9 is extremely overbought.

    These are the following months for this period: October and December, 2012.

    The recommended strategy: cover long and reverse to short.

    These monthly dates contain a high probability factor for the monthly cyclical patterns to change and reverse as the cyclical energy period is completed and the indicator adjust to the access level one in preparation for the next cycle wave pattern to start again continuously in a forward motion.

    The Lows for this period:

    These are the following months for this period. August and November, 2012.

    The recommended strategy: cover shorts and reverse to long.

    Acceleration Patterns:

    According to the VC Price Energy Momentum Indicator, the acceleration patterns are directional momentum indicators that identify increasing trend volatility and are used to add to your position according to the 30 day trend patterns.

    These are the following months for this period: July and August 2012.

    The recommended strategy: Add to trend positions on corrections.

    PRICE CONCLUSION:

    As we can confirm from VC Price Energy Momentum Indicatorcyclical chart above the gold market is on track to make a bottom by August of 2012 and as early as July 15th.

    Once this bottoms is confirmed, look for a bullish acceleration pattern that could last until the middle of October projecting prices into the 2.200 per ounce levels. A minor correction is expected from here before te final bullish leg of 2012 begins in November that could last until the middle of January 2013 with prices well above 2.500 per ounce.

    Disclosure: I am long PSLV, AG, AGQ, PHYS, SLW, GDX.

    Additional disclosure: Precious metals products trading involves significant risk of loss and is not suitable for everyone. Past performance is not necessarily indicative of future results.

    Themes: Gold and Silver Stocks: PSLV, GDX, AGQ, AG, SLW, PHYS
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