Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

Check Out The Monthly GDX Chart; This Is What Bottoms Look Like

|Includes:DUST, VanEck Vectors Gold Miners ETF (GDX), GLD, NUGT

The Financial Forecast Center has a website where they provide a very helpful, unbiased 6 month forecast for future price action in gold, various currencies, interest rates, stock indices etc. Click here, and you will see that the average price of gold in Sept. 2013 was $1348.80. Updated on Monday, Oct. 14, 2013, they are now predicting a price of $1336 for October. They see a slight increase from now to January 2014, up to just $1353. They see gold going sideways to slightly higher for the next 90 days. I concur. To the right of the forecast value in the table, there is a 50% confidence level column, and 80% confidence level column, with values you have to add or subtract from the forecast value to get the range gold should trade in, in the near-term.

To understand this, look at the November 2013 prediction of $1342. To be 50% correct in their prediction, they add and subtract $28 to the $1342 price. Thus, they are saying there is a 50% probability, the November gold price will average between $1314 and $1370. Since 50% is just a flip of a coin, I look at the 80% confidence level column, where the true average gold price should fall plus or minus, $63 from $1342. To raise the accuracy to 80%, one has to expand the range by adding and subtracting $63 instead of $28. Now we find there is an 80% chance the average price of gold in November 2013, will land somewhere between $1279 and $1405. Since we are presently at the low end of that range, closing in December gold today at $1282.30, I am pretty confident that the $1251 price that was hit this week and was rejected, is likely the lowest we will have to trade in gold for the next few weeks. After breaking support at $1270, we now have two closes above $1270 that greatly helps repair the damage when we traded down to $1251. We can still move back to $1251 or a bit lower of course, but there is an 80% chance we move higher, and only a 20% chance we move lower. I choose to be on the side of the 80% odds and I am maintaining my slightly bullish bias in gold, that should support the gold miner ETF (NYSEARCA:GDX) and triple leveraged bullish gold miner ETF (NYSEARCA:NUGT) in the near-term. Be sure to save this website in your favorites and you can check back in a few weeks to get the latest prediction when it is updated. It is comforting to see that we should continue with an upward bias through the end of the year even though the increase in prices are predicted to be minor. The volatility in gold is dropping, making violent moves to the downside less likely as we go forward. Gold has been in a 7 week downtrend already that is subject to reverse shortly. We are in a 7 week downtrend in gold, that follows a 7 week uptrend out of the bottom of $1180. It is more likely we move sideways to higher, than continue to drop further, for the time being. A quick move above $1300 turns gold neutral, and a move to $1450 would turn the trend higher and confirm the low is in. In January of this year, the banks were calling for average 2013 gold prices of $1700 or more, with an $1800 target for 2014. The banks were totally blind to the smack down that was about to come in April and May. Now they have updated their forecasts to predict falling prices for the next couple years, and they could be just as blind as they were in January, blind this time to the rally that could be about to ensue in earnest. It is apparent that gold was already struggling to stay in the mid 1350s, and their dire forecast probably caused selling that adjusted prices $80 to $100 lower it would have traded had the banks not made their forecasts. These bearish forecasts unnerved the few remaining bulls who were trying to hold on. The bearishness in the metals is at historical extremes. It is most evident when looking at the monthly chart of the gold mining ETF (GDX). Check out the following:

The only other time GDX traded under $30, was in 2008. Back then, we spent less than 3 months trading under $30. In 2013, we are in our 6th month of trading under $30. This is unprecedented. Surely a one to two year rally is about to begin at any moment. No wonder David Einhorn sold a good part of his gold metal ETF (NYSEARCA:GLD) earlier this year, to buy more GDX. This is a generational buying opportunity to buy GDX under $24. We may take out the June 2013 low of $22.21, but I would not count on it. If we do make a new low, it should surely be a marginal new low, followed by a screaming short-covering rally back above $30. This is the 8th week of the current downturn. Calling for a bottom this week, is like shooting fish in a barrel. This downturn is the retest of the June low. It may hold, or it may not hold. I believe odds favor it holding. But regardless, the next real move can only be higher. The short-covering rally could be absolutely an amazing sight to behold! We just need gold to move back above $1300 and we are on our way!

Disclosure: I am long GDX.

Additional disclosure: I am also long NUGT