My friend Bill H. got me thinking about long term Money Flow Ts on the weekly charts. I found an example in the weekly Gold chart below which projects an end to the up move in gold in the middle of December 2010.
I calculated some Gann inflection points, and found that 180 degree turn from the $1226.40 high in early December 2009 is almost identical to a 240 degree turn from the $1030.80 high in March of 2008 = $1415/oz. I view this as a minimum target. If price materially exceeds $1415, then the next inflection zone is $1464-77. The maximum target is ~$1610, which is a 360 degree turn from both $1030.80 and $1226.40.
Come December, we'll revisit this post and see where we are.
![[Most Recent Quotes from www.kitco.com]](http://www.kitconet.com/images/live/s_gold.gif)
![[Most Recent USD from www.kitco.com]](http://www.weblinks247.com/indexes/idx24_usd_en_2.gif)
Posts
Parker, where do you think silver's MFI T will end?
ReplyDeleteI don't get as clear a picture looking at Silver's weekly chart. If I had to guess, it will end around the same time as gold. I haven't put pen to paper on Gann for silver yet.
ReplyDeleteNice blog. The only issue is that any major downside event in the markets could send the USD much higher and kill the gold rally. If QE2 disappoints, gold may really take it on the chin. Just something to keep in mind.
ReplyDeleteOtherwise, your target looks good. But if we get a major downside event, nothing will be spared.
ReplyDeleteGuys (and gals):
ReplyDeleteI don't want to throw a wet towel on these proceedings, but trying to time tops is a mugs game. The only person I would remotely feel confident with calling tops and cycles is Terry Laundry. I applaud Parker for his work, but chances are people may get hurt badly following Parker's theories. They just aren't as solid as Terry's. Sorry Parker...but best of luck and keep swinging.
I disagree- Parkers refinements to T Theory have been much needed. Terry has been 'baffled' over the past months, and his timing is Way off. If Parkers theories are right the markets may have peaked on Oct 25.
ReplyDeleteI also follow Terry Laundry and agree he has been out of sync lately. The point I am trying to make is in a major downside event, all theories will be temporarily overshadowed by the event. From my research, such a major event is set to occur within weeks. If it does, we are back to king Dollar once again.
ReplyDeleteFirst let me thank you for taking the time to share. I know it’s a lot of work. It is deeply appreciated by all.
ReplyDeleteMy question is why you have drawn the center post of the silver T where you did. On my chart of SLV the highs of the MFI come on ….
9/08 88.48
9/14 89.75
9/29 93.61
If I use the 9/29 high as the center post then the silver T ends on 11/03. On your chart you seem to have placed the center post between these dates. How did you arrive at 9/20 for it’s placement and why?
Thanks very much
W
Thanks Parker for all your work. Terry must see validity in your work for him to mention it on his blog. Listening to him week after week gives me the impression that he isn't too keen on other traders opinion.
ReplyDeleteThanks again.
Hi W
ReplyDeleteI assume you are referring to this chart:
http://schrts.com/9SFjxH
On my chart, the MFI value for Sept 29 is 89.48, not 93.61.
Sometimes, you don't have a well-defined peak in the money flow to place the center post. I showed this chart as an example of when you should "midpoint" the center post in a topping pattern in the MFI, in this case between the peak at 88.48 on Sept 8 and 88.21 on Sept 29.
Another way to think of it is this: the time it takes from Aug 24 (the start of the trend) to the first MFI peak on Sept 8 should roughly equal the time it takes from the last MFI peak on Sept 29 to the price peak. Because the divergence starting on September 29 is really what makes this a Money Flow T to begin with.
In response to Jim above..."trying to time tops is a mugs game".
ReplyDeleteIf the definition of a Mugs Game is absolute uncertainty.....because it is impossible to predict, as observed in drinking games, (online dictionary) then I would disagree.... it is absolutely certain that the drinkers will get drunk.
Terry's original insight in the late 60's was of time symmetrical market moves. I don't think, at some point in the future, that the move off the March low was not understandable in terms of symmetry .. it will turn out that our understanding of the beginning point and the mid point was incorrect.
One of Terry's greatest strengths is his ability to respond and adapt....and to constantly improve his observations of market moves and to refine and adapt his rules. Witness his acceptance of Parker's new insights. I have known many other technicians who developed a strategy that was thought to be perfect, only to end up ruining their reputations because they could not adapt their systems to changing market realities.
All of the noise here is about not predicting accurately the market top. I would say that anyone who did not take profits generated by Terry's accurate bottom call, and his predication that the momentum top would be in the Spring of 2010, has not really learned the lesson of Buy Low, Sell High. Buying high believing it is possible to be able to sell higher is a Mugs Game. Also known as a "Bigger Fool" strategy. (and lets be clear here.. Terry is an investor, he does not recommend shorts.)
What developed since the April highs is a trading market, and Terry is not the adviser to turn to in a non-trending market. There are two skill sets to develop as an investor... a long term, trending strategy and a short term trader strategy. With both skill sets focused on Not Losing money, rather than on making
money.
Here endeth the gospel for the day.
Best to your trading!
Bill
Greetings all!
ReplyDeleteTerry decided to comment on the long term Gold Money Flow T this weekend.
Audio:
http://ttheory.typepad.com/files/ttoaudio20101031c.mp3
Chart:
http://ttheory.typepad.com/files/mfimidpointforgld20101027pdf.pdf
Gold is struggling at the $1415 level as my Gann indicators have anticipated, but gold has reached that level a ~month earlier than expected.
ReplyDeletethe cycle high in gold ~December 8 should be at least a double top-was your answer to my question on 22nov. I was already long in Gold but wanted a target to get out, so I took your's prediction. I know that we have a top date on 10 dec but....my target got hit yesterday.. THANK'S PARKER great call:-)
ReplyDeleteRodd
ReplyDeleteThanks for the kind words. Glad the trade worked out for you!