Gold Bull Market Trend Forecast
News_Letter / Gold & Silver Sep 29, 2008 - 01:44 PM GMTBy: NewsLetter
September 23rd , 2008 Issue #28 Vol. 2
Dear Reader,
Leaving aside the historic credit crisis events of last week to approach the Gold market on a purely technical basis following the breakout above $850 last week. This article therefore is an update to my existing series of analysis of the last 6 months which has been consistently bearish of Gold (articles archive) during which time Gold has witnessed a decline from $1033 in March to $740 earlier this month.
Gold Bull Market Trend Forecast
Leaving aside the historic credit crisis events of last week to approach the Gold market on a purely technical basis following the breakout above $850 last week. This article therefore is an update to my existing series of analysis of the last 6 months which has been consistently bearish of Gold (articles archive) during which time Gold has witnessed a decline from $1033 in March to $740 earlier this month. TECHNICAL ANALYSIS OF GOLD
Chart Courtesy of Stockcharts.com TREND ANALYSIS - The powerful break above the $850 previous high is a clear trigger that signals a significant rally that initially targets the next high of $989. However despite the increase in volatility, gold's most recent action has seen gold retrace to back below $900 in recent hours with last price at $880, which suggests a correction against the powerful rally is underway targeting a retracement to $850 breakout point. The next resistance level above $989 is the $1033 March high, which given the vicinity to $989 would probably break soon after a break of $989. However Gold resistance at $989, would target a retracement to support at the recent high of $926, with strong support in the range of $926 to $900. Failure to break $989 - Would see gold continue to develop a sideways pattern in the range of $989 to $800. Price Targets - The 2006 downtrend witnessed a decline of some 185 points, the subsequent rally to 1033 was up 490 points, or 264%. Gold also made an intermediate high at $850, up 308 from the low or 165% of the 2006 decline. The downtrend from 1033 to 740 represents a decline of 293 points. Therefore the two trend targets above the 1033 high are 1220 and 1516. MACD - The MACD indicator is heavily oversold after registering a sustained bear trend of 6 months which is similar to the length of the downtrend experienced during 2007. SEASONAL TREND - The recognized seasonal pattern for gold is for a rally from late July / early August into February. Clearly up until last weeks action Gold has been ignoring the seasonal pattern. However the recent catchup move implies that Gold is now targeting a trend inline with the seasonal pattern staring a month late, therefore this suggests a + / - one month up trend target for a gold of between late Jan to Late March 2009.. ELLIOTT WAVE THEORY - The decline from the March 2008 high clearly indicates a simple ABC wave pattern , each of which were themselves comprised of abc waves. This strongly suggests that the decline was corrective, and therefore implies a 5 wave advance to above the 1033 March high. Gold Forecast Conclusion - The immediate action suggests an ongoing correction towards $850. Gold has experienced a major significant breakout to the upside which is targeting a volatile up trend to $989, on break of which Gold will target a new all time high of above $1200 by Feb. to March 2009. A FAILURE to break above $989 and follow the forecast trend would imply a sideways trend in the range of $989 and $800 for probably the next 11 months i.e. until the next bullish seasonal time period approaches. ................................................... This weeks special is Prechter's FREE 10-Page Market Letter: Be One of the Few the Government Hasn't Fooled As the U.S. government pulls a sleight-of-hand trick on the unsuspecting public, you can break the cycle of misinformation by reading this 10-page report. Warning: Prechter's answers to these questions may shock you. • Who does the government consider to be homeowners: you and your neighbors, or the banks that hold the deeds?• Who really benefits when the government props up Fannie Mae and Freddie Mac, and what's the fraud behind the idea of “too important” to fail? • Who really endorsed the emergency Housing Act – and who will be hurt by it? • What impact did the so-called “stimulus package” have on the U.S. economy? • Can the Fed keep making loans to banks forever? • Is it actually against the law in some states to warn people of potentially dangerous banks? • In an economic depression, will pension funds keep most retired Americans afloat? • And many more! Don't wait! Get this free report that readers are calling “a wake up call to lots of Americans.” Click Here to Get Your Free Report Your fast converting to a gold bug analyst. Nadeem Walayat, Copyright © 2005-08 Marketoracle.co.uk (Market Oracle Ltd). All rights reserved. Nadeem Walayat has over 20 years experience of trading, analysing and forecasting the financial markets, including one of few who both anticipated and Beat the 1987 Crash. For more in depth analysis on the financial markets make sure to visit the Market Oracle on a regular basis.
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