As Terry Laundry mentioned today at T Theory Observations, the T Theory Confidence Index is rising. During 2002-03 and 2009-10, take a look at how Gold reacted when the T Theory Confidence Index broke out during periods of generally rising confidence:
Gold has been range bound for the last two months while the T Theory Confidence Index has steadily risen since September 1 and recently broke to new highs. Based on past history, I would not want to be short Gold in this context.
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#GLD astro chart was updated today...http://bit.ly/gf1Vb5
ReplyDeleteThank you very much for sharing all your hard work.
ReplyDeleteHi Parker,
ReplyDeleteFor once pls allow me to not agree with your conclusions: For the same FAGIX vs GLD I found at least 2 major occurrences where the direction of Gold was totally opposite the confidence index:
FAGIX dropped consistently from June 2007 to MArch 2008, at the same time gold went from 650 to...1000. Then again, Fagix dropped from Jun to Dec 2008- during that time Gold was more or less stable.
http://screencast.com/t/VwM5WbQw475
Then, for the present time, interestingly Gold topped on Nov 9, one week before Fagix. Again, topped on Dec 7, one week before Fagix. Gold made his 3rd top on Jan 3 last week; will Fagix top...today? What is interesting is that there is a top divergence between Fagix (higher top than in Dec) and gold (lower top). I see this more like a possible reversal to the downside here.
http://screencast.com/t/69PbNTmkFIu
Take care, and thanks for sharing as always.
Carl
When I looked at the charts, I had the same thoughts as Carl. I thought gold might be the leading indicator.
ReplyDeletejoe
AAForecast shows Gold going to 1500 by 4/1/2011
ReplyDeleteJaroslaw Jac at StockCharts.com Public Pages has gold going to 1954 this year.
http://www.aaforecast.com/
The graph to the right is the forecast for the IShares ETF for gold: IAU.
The forecast is for continued upward movement in the price of Gold.
I have less experience forecasting the price of gold. I provide this as a courtesy to some friends.
If your time horizon is long (years), there is no question that Gold will be higher in the future than it is today. The dollar must decline relative to the Chinese Renminbi and virtually all currencies of the world if only to correct the Current Account deficit. This would suggest the appreciation of most commodities over the next several years.
Carl
ReplyDeleteThanks for your input. I would note that I confined my observation to periods when confidence was generally rising, as has been the case recently. You cited 2 periods were confidence was generally falling.
Gold can do well during both periods. When confidence is high, risk assets usually do well. When confidence is low, safety assets usually do well. Gold can be viewed as both a risk asset and a safe haven.
When everything goes in the toilet like the collapse in 08-09, gold can be thrown out with the bath water.
Beautiful SPX symmetry:
ReplyDeleteEW conclusion based on 60 min. chart: last week saw an EDT pattern,
Wave 1 peaked on Monday @ 1276.17
Wave 2 bottomed on Tuesday @ 1266.66
Wave 3 peaked on Thursday @ 1278.17
Wave 4 was the second low on Thursday at 1270.96
Wave 5 was the print high of 1276.83, a failure to reach the upper boundary line, signaling weakness/exhaustion.
therefore the orthodox high for the move was 1276.83, subtract March 6, '09 low of 666.79 = 610.04, .04 from a Fibonnaci number. The rally from the 666.79 low was 666.79 days long on January 2nd. A .666% retracement of the entire 910 point decline would be 606.06 points, missed by 4 SPX points.
Rally from July low at 1010.91 to Jan. 7 high of 1278.17 was 267.26 points in 189 CD. divide 267.26 by 189 = 1.414, sq.rt of 2. 89x3 =267.
( some of this courtsey of some fellow traders smarter than me)
We are seeing a decent correction in gold right here. Any comments on the duration or price targets?
ReplyDeletetim, the 150day MA or lower should be a good time to accumulate as it's held the bottoms for the last two years. Duration? Most seem to last about a month or two.
ReplyDelete