13 replies to this topic

[blustar]

I see DROOY near $2.00-2.04 by the end of Nov 2003 and then a big upmove into Feb 2004 to near $11.00. Everything I'm seeing is suggestive of lower prices in gold first before the anticipated move up. blustar

[tradesurfer]

bluestar.. I think I am going to have to respectfully disagree with you about gold here. I really think we are on the verge of the big move in gold. I don't know why you feel the need to wait until end of November to jump in with both feet into the gold market. That is only about 20 or so trading days anyway from now.. there is no way gold is going to get to 330 in 20 trading days. The price of gold has completed the handle portion of another massive cup and handle formation. We are on the verge of the big breakout. And it makes sense when you look at the SP500 which is about to have a weekly MACD downside crossover for the first time in many many months. Regards, tradesurfer

[blustar]

The dollar looks to me about ready to break out to the upside. The target for the dollar would be the highs early this year when gold touched near $320.

In an e-wave prespective, I see two impulses down off the 2001 high in the dollar. Each was 5 waves. The last bottom earlier this year finished the last impulse and we have been in a corrective flag ever since finishing "a" up and now "b" down.

Where wave five began in the last impulse down is very important because we should take that out in wave "c" of this corrective flag.

If you go back to the top early this year in gold, and trace back to the bottom in 1999, you can see a clear a-b-c up move. I'm labeling that as Wave A. The bottom in late March is "a" of B and the recent top is "b" of B, which leaves wave "c" to the downside in a flat to complete Wave B. Wave "c" looks like it is subdivided wave [a] and then the recent wave [b] top which took some gold stocks to new highs and snookered in the public like you. We now have [c] of "c" left to the downside.

Looking back again to the dollar you can see a clear 5-3-5 or a-b-c downmove there from the recent top on the daily chart. One would expect a H&S reversal bottom, so the first target is to take out 'c' and completing wave "a" of [C] over the next 5 days or so and then come back in wave "b" of [C] of the bigger flag. That should be complete in about 2 weeks. Then comes "c" of [C] and its target is 102-103.

The gold market moves in 8 month cycles and that 8 month cycle low is due at the end of Nov 2003. It also coincides with a bigger 10.67 year cycle low. The next low in the dollar (13-17 week low) is due around the end of Jan at the earliest and into Feb 2004 and should complete the next impulse down.

It also coincides with an 8 year cycle top in gold. My thinking is we go to above $400 on this move to around $462-475 by February in Wave One of C. There should be a secondary top [b] in late May or early June and then a good shakeout into July 2004 [c] of Two of C where the next 2 year cycle and 8 month cycle low is located.

I just recently looked at a poll of gold bullishness vs. bearishness and it was 68% bulls and 10% bears. That alone let's me know that the smart money is selling gold short along with the mining stocks right here.

So you can see by my e-wave analysis that I believe this to be a bear market rally in gold overall. This is not to say I'm not bullish on gold for the next few years, because I am. I see the e-waves unfolding in a larger "B" wave, "A" being the 1999 low. The last major inflation top was 1981, 60 years after the last major top of 1921. The intermediate inflation peak usually runs some 25 years later (1921-1946) and that is due in 2006, coincidentally where the next major low in the stock market should occur.

How high is high? A 2.618 ratio of A to C gives me a "B" Wave target of $777/785 in 2006. The last high was $861 in January 1980. I believe we come back and test $328 once again in 2012, forming "C" of a large 4th (?) Wave flag (it remains to be seen at this point what larger wave degree this will be and is inconsequential at this point).

Incidentally, there was a gap left unfilled near $328 earlier this year that I believe will be filled next month. I hope you can understand now why I am ST bearish, but still IT bullish on gold.

blessings,

blustar

[PIK.]

Blustar, in regards to the 10.67 year cycle low you mention, I would assume that this cycle is the dominant cycle for Gold at this point vs. the 8 month. What I was curious about is in looking at the last 2 cycles (that is as far as my charts go back), the previous 10.67 year cycle lows all occurred after several years of significant declines leading into the low. In the case now, Gold has risen into this cycle time for the last several years. Based on this, I have several questions I was hoping you could provide your opinion on: 1) Does the rise of Gold over the last several years into the 10.67 cycle low time play a role in the significance of the potential decline? If it doesn't, why? 2) Were there any major anticipated cycle bottoms back in late 1999 or early 2001? If so, what are they and how do these cycle lows play a part in the overall time cycle picture for Gold? Thanks in advance for any additional insight. Regards.

[blustar]

1999 was the approx. 12-14 year commodity low (1985, 1971, 1957, 1945, 1932-33) and 2001 was an 8 year low in gold. The significance of the current 10.67 year cycle low is not so much the downside, but upside potential. In an uptrend, cycle lows represent more buying opportunies than potential sell-offs. Although I do believe we see a fairly severe sell-off into late Nov, we have to take into consideration where we are and where we are going. The 10.67 year cycle goes back to Dec 1970/Jan 1971 where the 70's boom in gold took place. The next 10.67 year cycle low is due in 2014 and will probably be a secondary low then too. The 10.67 year cycle top is due on or around early Oct 2006. We will probably have to adjust the cycles to fit the next pattern after that as cycles tend to work differently in bull patterns than bear. I believe the next bottom of significance will be around 2012 +/- one year. blessings, blustar

[PIK.]

Blustar, thanks for the reply. Based strictly on your interpretation of the 10.67 year cycle and all other technical indications previously mentioned, odds would seem to favor continued ascent of prices into late November (just my opinion). As I said before, things could change in a heart beat, but until they do the technicals still indicate an up trend. Thanks again for your time in explaining your position.

[blustar]

I looked at the technicals in gold and they are diverging badly near this top. Like wise the technicals on the dollar suggest an important bottom here. If the dollar goes up like I think it will next month, gold will plummet. 68% bulls and 10% bears for gold is not good odds for continued higher prices, IMHO. I think you are one of the many who are bullish on gold and that to me is great contrarian logic not to be invested just yet. I wonder how you'll feel if gold does what I think it will in November. Will you still be bullish? Just something to chew on. blustar

[PIK.]

Blustar, like I said, I take it day by day. I don't know if I would be bullish gold in November based on your anticipated decline. I might depending how the technical picture looked to me at that time or I might not. I don't claim to be able to successfully predict what is going to happen, so as far as I know, you may have a special ability to accurately do this on a consistent basis. I am neither bullish or bearish (or at least I try to keep the bull/bear concept out of my analysis) and I will react accordingly if price declines to protect myself with my current positions. Best of luck to you.

[swanstkdh]

Thoughts for Kunal on Drooy Go to gold-eagle.com and look under tech analysis. The last post is all about drooy. it has been sleeping for quite some time. maybe soon to wake. swan