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Erik McCurdy
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Erik is the senior market technician for Prometheus Market Insight and has been performing chart analysis since 1995. The software program that he developed to monitor long-term stock market trends has correctly identified 92% of the cyclical turning points in the S&P 500 index since 1940.... More
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Prometheus Market Insight
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Prometheus Market Insight
  • Gold Attempts To Form Cyclical Bottom 1 comment
    Oct 24, 2013 6:39 PM | about stocks: GLD, SGOL, GDX

    Click the graphic below to play this video.

    (click to enlarge)

    In September 2011, our cycle analysis predicted the formation of a long-term top in the gold market. Following the development of a consolidation formation from late 2011 until early 2013, prices moved below congestion support in the 1,550 area. As expected, the breakdown was followed by a severe decline of 24 percent from April to June.

    (click to enlarge)

    The secular bull market that began in 2001 is still in progress and we have been monitoring market behavior for the potential formation of the latest cyclical bottom during the last five months. In September, our computer models outlined a bullish scenario that would suggest a cyclical low is forming. That bullish scenario required the formation of the latest intermediate-term cycle low (ITCL) well above the previous low in July. Last week, we identified the potential formation of the latest ITCL during the week ending October 11. Although a cycle low signal was not generated, gold has continued higher this week, further supporting the long-term bottoming scenario.

    (click to enlarge)

    As always, it is important to remember that a long-term bottom is a process, not an event. Cyclical lows are confirmed in stages as specific short-term and intermediate-term objectives are achieved. The formation of the latest ITCL in early October could be confirmed as soon as tomorrow, so it will be imperative to monitor gold market behavior closely for this potentially important intermediate-term signal.

    We will identify the key developments as they occur in our daily market forecasts and signal notifications available to subscribers. Try our service for free.

    Disclosure: I am long SGOL.

    Themes: Gold Price, Precious Metals Stocks: GLD, SGOL, GDX
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  • winnachickendinna
    , contributor
    Comments (34) | Send Message
     
    Silver has to close the 50+:1 ratio on the way up with gold. So if gold hit 1800 and the ratio squeezes to approximately 38:1, that's 1800รท38= about $47. See the difference? Gold would go up 33% and silver would double. Silver up 100% is 3x gold. I tried explain that in my instablog. The problem is im a gambler and not a financial analyst. I'm sure uou get my point.
    24 Oct 2013, 10:49 PM Reply Like
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