My near and intermediate-term work is warning me that 3 session climbs from $850 to $911 (so far) in spot gold will turn out to be a trap (bull trap) and part of a near-term topping process just above $900, prior to another bout of corrective weakness that presses prices into the $800-$770 area in the weeks ahead. The upleg pattern off of the August 2007 low at $641.00 to the January 14th high at $914.00 exhibits the look of completion. In addition, the heretofore reliable 15-18 week cycle (low to low) is now in its 8th week.

I expect a price peak in the 8th or 9th week of a 15-week cycle, so this retest of the highs is occurring "on schedule." If my work proves correct, then spot gold prices -- along with its ETF, the streetTRACKS Gold Shares (NYSE: GLD) -- will reverse in the upcoming hours, and press towards a retest of $850 initially. What about the weakening dollar as a catalyst for much higher gold? My work on the euro argues that it is forming a top as well, with a lid at 1.5000.

By Mike Paulenoff

Mike Paulenoff is author of the MPTrader.com (www.mptrader.com) , a real-time diary of Mike Paulenoff's trading ideas and technical chart analysis of Exchange Traded Funds (ETFs) that track equity indices, metals, energy commodities, currencies, Treasuries, and other markets. It is for traders with a 3-30 day time horizon, who use the service for guidance on both specific trades as well as general market direction

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Comments

Kanwal Shah
26 Jan 08, 13:26

Gold, Silver Bull Trap?

How can you consider this a bull trap?

With the Dollar not looking like its going to recover any time soon, how do you reckon this is a bull trap?

Stock markets crashing worldwide and no safety left to an investors money, where do you think they're going to invest in? Obviously hard assets such as precious metals?

Times have changed, the 15 week cycle that you have according to your research, doesn't take external factors into action.

Gold and silver prices have ROCKETED HIGHER, AND LOOK LIKE THEY'RE OFF TO THE MOON!!

pls explain to me exactly how you think gold is going to crash down to 800 with proper research please, or more explanation.

Thank you,

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