GOLD Futures - tag category postings

If you take a close look at the chart above you can clearly see that the spot gold price has successfully broken above the longer term down trendline since this mini bear market in gold started in March of 2008.

Despite this bullish action there is still a lot of talk that gold will break down again and maybe go to 850 or somewhere near that level.

I have a hard time believing that at this point.  I would rather just trust this simple chart which is saying to me that a successful break of the bearish downtrend has occurred and so now it should be assumed that we should eventually get continuation to the upside and probably at a faster speed than usual because there is zero resistance on the left side of the chart above 1034.

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If you ever want to know what it feels like to be bi-polar, all you have to do is start watching the gold price on a daily basis.  Two days ago gold was up big leading one to believe that a breakout may start.  Then the next day the gold price took a major body blow to the downside.  Then today (at least so far) spot gold popped right back up again.

But this ‘bi polar’ type price action is accomplishing something important.  It is filling in the large symmetrical triangle that has formed in the gold price since the mid February 2009 time frame.  This is a large triangle and has a lot of significance in terms of the amount of of energy that is being built up.

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Have you ever thought what might cause the gold price to go truly parabolic (aka vertical) ?  It seems that the personality of the gold price is one of parabolic structure.  That was the case in the 70’s and so I see no reason to believe this will not be the case now.  It probably will.

The chart above is the US Dollar Index chart plotted with YEARLY price bars.  It should be quite clear that this is a very long term price chart since it takes a whole year just to complete one price bar !

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BestOnlineTrades is issuing this blockbuster trade alert on the gold sector.  Whether it be Gold Futures, Gold ETFS (such as the GLD or DGP ETF), micro cap through large cap gold stocks, or even long dated call options, we believe the gold trade will be the most popular and productive trade for the next 9 to 12 months.

This is a very important alert and we feel that this alert may go down in history as being the most valuable and important alert we have ever issued. 

BestOnlineTrades has studied the gold market carefully since 2003.  We have seen and recognized the beginnings of this bull market at that time and feel that right now, perhaps even as soon as this week the gold trade will activate and turn into one of the biggest breakouts the world has ever seen.  It may not seem like a breakout at first, and it may disguise itself by transforming into a ‘slow motion’ breakout, but we believe it will still be seen in hindsight as being transformational.

While we do not talk too much about fundamentals here at BestOnlineTrades, we remain open to the possibility that inflationary trends will start to become more entrenched and severe during the next 9 to 12 months.  Part of the reason for this observation has to do with the fact that the US Dollar Index precisely aligned and topped with the April 21st, 2009 Marty Armstrong Cycle date precisely.  The Marty Armstrong Cycle is a very powerful 8.6 year global business cycle model that has proven itself to pick extremely important turning points in major markets worldwide.  The fact that the US Dollar has aligned itself to the model is an event in our opinion that is not to be taken lightly.

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The chart you are looking at here is the quarterly price bar chart for the continuous gold contract.  I love long term charts like quarterlies because they forecast bull market moves and are definitely geared towards longer term forecasts.  This gold futures chart is no exception.

Something very significant has developed in the gold price on the quarterly chart.  For the first time since 2004 (that was a long time ago!) we see a double inside quarter developing.  A double inside quarter exists when the two most recent price bars each have lower highs and higher lows than the preceding price bar.  It is similar to a ‘coiled spring’ in that you have price compression.  These ‘double inside’ patterns do not really forecast price direction either up or down, so we could see a big move up and out of this pattern, or down and out of the pattern.

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There is in my opinion a blockbuster trade developing in the gold market right now.  It is one of those slow motion type developments that usually catches people off guard.

This has the potential to be a very big trade in my opinion.

The chart to the left is a simple representation of what I am talking about. I will go into more detail on this in future posts.  You can click on the chart to the left to see it full size. The trade developing is a combination of a symmetrical triangle pattern in the gold price in addition to very bullish seasonals coming in September 2009.  The red shaded area represents the very bullish seasonal time frame for the gold price.  The green shaded area represents break out territory of the gold price from this several month congestion area also represented as a somewhat large symmetrical triangle pattern.

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I just thought I would let everyone know that any thoughts I have about the gold market (gold price, gold mining stocks, or gold mining indices) will be done over at LetsGold.  I just felt that gold is an important enough topic that it deserves it’s own forum.  So again go over there to hear my latest thoughts on Gold.

The gold market is a peculiar type of market since I have been watching it from 2003 onward.  It tends to have big spike up rallies but then big retracements only to be followed by another big spike up rally.  It is also a small market compared to most others and at least so far I have noticed that the mainstream public does not appear to be fully participating in this market in any meaningful way yet.

So there should be lots of interesting things to come in that sector going forward from a technical perspective as well as from a grand public perception perspective and investor psychology as well.

Perhaps you have heard the term ‘gold bug’… those devoted followers of gold who have a real passion for the sector and to a certain degree turn it into a religion.. I do not fall in that camp, at least not yet.  Any time one mixes fervent passion for a market it just seems like it is an accident waiting to happen.  Better just to jump along for a ride in anything, whether it be real estate, tech stocks or gold and then jump ship before everyone else does.

We are here to make money, take money and then go home. That’s it end of story.

So again all gold discussion from now on will occur over at letsgold dot com, not here at bestonlinetrades!

The gold price has accomplished a feat so huge that it may never ever be seen or repeated again for at least half a century or more.  So if you are reading this, pay attention because you will probably never see a pattern like this again in your life time.  The gold price has formed a cup and handle chart of massive proportions.

I was tipped off about this pattern by a friend of mine name Roland.  Thank you Roland for this outstanding observation!  Sometimes the most obvious patterns have a way of hiding from you, maybe because some of them are so slow to develop. 

The pattern is called a cup and handle for obvious reasons, it looks like a tea cup with a small handle.  This is not the rarest of patterns but still popular and was made very popular by William J O’Neil and his Investors Business Daily investing publication.  The cup is a large rounding bottom type formation and the handle forms near the old highs and represents residual selling that precedes a breakout to new highs or new all time highs. In the case of the gold price we are looking for new all time highs.

This beast of a pattern is…

A Massive Twenty Nine Years Long !

The entire pattern is 29 years long. So that means I was 10 years old when the cup portion of this pattern started forming. So I would have had to observe the gold price at age 10 and then wait and watch it form the cup for about 28 years and change. 28 years and change! That is a long time to wait for a pattern to develop!

The chart to the left is once again the actual gold price as of 01/02/2009.  What is interesting is once again there appears to be a smaller cup and handle pattern that seems to be saying gold wants to breakout.  The measurement target of this smaller pattern is roughly 1040 gold.

This means that if this smaller pattern is valid, we should see in early January a fairly fast and swift move back up to the old all time highs in the gold price.

But wait there is more.

Here again is the more recent action of the gold price as represented by the GLD gold ETF.  You can see that the pattern has the look of a large flag pattern. And you can see the smaller cup and handle near the end of the flag.

So if this smaller cup and handle gets a breakout, it means that price will be above that white downtrendline on the flag.  So by definition that would say the breakout is in effect.

So we essentially have a very large cup and handle pattern of 29 years in length. But then we have a smaller cup and handle pattern within the very large handle of the whole 29 year pattern. Does that makes sense?

Certainly the gold market does not have a reputation for making things easy.  So as bullish as all the above charts look, I am still a little bit weary it will play out exactly like this.  We cannot rule out one more violent shakeout to the downside before things start cooking.

Markets seem to have a habit of doing that. Shaking the tree as much as possible before the big move.

Lets see what happens.