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|Includes: SPDR Gold Trust ETF (GLD)

On March 19th I indicated the GOLD bull run was over for now.

The following chart showing a bearish reversal, with a bear wedge and downside EW1 target of $1500 was posted.

We technically chart GOLD on year over year, week over week. Doing it this way will pull out some recurring patterns.

A 21 week Fib sequence chart, June/July 2011 to June/July 2012 shows significant highs at Fib weeks 5, 8, 13. Expect Fib week 21, the next Fib week in the sequence, to also bring in a significant HIGH, not a low; consistent with the previous week cycles. (Notice I have marked the EW counts in Roman numerals, showing the completion of EW1)

Slow stochastic at the 50% and 80% levels marked previous FIB week highs. We will watch for this to line up with FIB week 21; along with calculated retrace prices between $1590 and $1680.

Once these targets are hit, EW wave 2 will be completed and impulse EW3 down will begin. I will provide downside targets at that time.

The put/call ratio backs up our bear market in GOLD thesis. As the price has moved lower, the put to call ratio has gotten more BULLISH; which is the opposite of what brings about bottoms.

This extreme bullishness in GOLD will help end EW2 and usher in a EW3 sell off.


Put/Call ratio suggest GOLD has much more room to fall.

Our EW1 low projections from March came in near the exact price. Now we are awaiting EW2 to work off some oversold conditions before a major EW3 impulse down move takes GOLD substantially lower.

Tim Kathlina

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.