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  • Gold for Bears: Long term update (2011) 6 comments
    May 8, 2011 1:15 PM

    This is an update of my original call for Bear Market in Gold

    As you know I called for gold crash a month ago just at the middle of the channel.
    Market, however overshoot it 100 bucks more. The crash appears to be in progress now, but my prediction for the size and type of the move has changed. I am back to the original prediction of head and shoulders top.

    Basically, gold will be an anti-dollar trade, for whatever pips the dollar goes up, gold will go down, and as you can see here I am projecting a spectacular move up in the dollar. We can see a sort of left shoulder on gold's chart, so the whole move looks to me is going to be  be a type of head & shoulders top, but with an inclination, due to extreme bearishness.


    I updated the channel lines slightly moving them. This is how it would look like:

    gold yearly channels

    Now, lets see the monthly charts.
    Gold: Monthly channels

    We have 2 channels here, black and blue and you can see that one of them was
    overstepped (blue) and the other one wasn't fully completed (black). However we have got the top on the weekly, so market reversed.
    Hitting 400 by early 2012 would be an ideal bottom, but I am not calling 400, I am
    calling 500. Because there is a strong support at 500 line. Also we never had a close at 500 level, so this is the time market might do it and this should be the end of the move, somewhere around Jan/Feb of 2012

    The pink line is how I project the trading. Basically we have to break below 1080 quickly and then do a consolidation below this resistance in a form of a trading range, with following next leg of downside to 500. Then we would have a correction with a following capitulation bottom between 320 and 400 in 2014

    To confirm this move gold has to break below 1400.

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Comments (6)
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  • Toven
    , contributor
    Comments (48) | Send Message
    Mr. K. What is going to give the DOLLAR this strength?
    9 May 2011, 09:43 AM Reply Like
    , contributor
    Comments (664) | Send Message
    Author’s reply » hi, my analysis is based on deflationary fundamentals.
    9 May 2011, 09:48 AM Reply Like
  • Toven
    , contributor
    Comments (48) | Send Message
    What deflationary fundamentals?
    9 May 2011, 10:21 AM Reply Like
  • bullfeathers
    , contributor
    Comments (180) | Send Message
    these presumably

    9 May 2011, 02:23 PM Reply Like
    , contributor
    Comments (664) | Send Message
    Author’s reply » guys I don't want to argue on this, but quickly: the deflation is not about the amount of money supply, it is about deceleration in economic activity. when global, it is reflecting on the dollar. I think next wave of deflation has started. During the Great Depression it started first week of April, so, we are almost in the same season. My calls are conservative, they are just a bit lower than in 2008
    9 May 2011, 02:59 PM Reply Like
  • drom
    , contributor
    Comments (33) | Send Message
    deflation = economic slowdown
    With our only chance of getting out of our massive debt hole is to "grow" out of it, I doubt an economic downturn will instill confidence in paper USD.


    I see you been a gold bear since Nov 2009 with the following comment: "another pointless gold bug. it is going to collapse and you won't see another high above 1,000 in 5 years"


    but this comment from you in Sept 2009 is my favorite one:
    "see Kim, there has been so many bullishness in gold, that it is just an excellent short at current 976"


    Sounds like you really understand fiat currency and its relationship to gold. Shorting gold since $976 was a super nice move, keep it up and one day you might just loose everything and finally stop posting dumb comments here.


    For reference here is this guys history of comments:


    If you did the exact opposite of everything he suggested over the past 2 years you would have done really well.
    12 May 2011, 12:09 AM Reply Like
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