2011 Positive for Precious Metals

Ross Clarke gives us a online seminar for the technical background of bull markets, especially as it might concern the bull market in precious metals going forward.

The link includes charts to follow along with:

http://talkdigitalnetwork.com/2011/01/2011-positive-precious-metals-3/

Its very possible that this analysis may be the best available forecast for the gold price bull going forward. These price targets give a lot of food for thought.

1033 div 252 is 4.1. So it may very well be that our target value is 4.1 * 681 = 2792. It wouldn't come as a surprise if the target values outlined in the presentation actually turn out to be the actual numbers after two relentless upsurges into 2012.

One reservation I might have is that the bear market in bullion was clearly an extended one-wave, while the bull market since 2000 is looking very much like an extended 3-wave. Drawing a direct comparison between the two may lead to problems.

Another reason why I might want to set aside deflated charts for the moment is that when you review your wave form analysis, the low after the onset of wave one is actually lower in the deflated chart than it is on the nominal chart, the same with the first really big correction. This would throw out any attempt at a wave count from the outset.

Drawing trend lines of any efficacy that assist you with wave form analysis becomes problematic, though the trend line connecting the tops of the waves clearly shows a breakout over the top, meaning entering into an extended 3-wave.

The monthly log scale chart will surely follow.

The original CPI-deflated charts obtain their count of the peaks and valleys in comparison with the Dow. (though I think by now this kind of analogy has already fallen apart, because its no longer being observed)

supersize: http://www.flickr.com/photos/11747277@N07/5417639666/sizes/l/in/photostream/

stockcharts.com Monthly Log Scale

I don't think people are sufficiently prepared should we be entering an extended 3-wave formation in the gold bullion market.

http://www.youtube.com/watch?v=Rfysyex_DAk

GBN.V Daily

The GBN.V daily chart has filled in the previous gap nicely. Our correction could very well end with this level before moving higher, certainly the daily chart is oversold enough.

It must be pointed out that this correction is eerily similar to a correction GBN.V shares had in spring of 2002. A six-month run-up with a correction spanning over two months.

The three elements that will drive the share price higher in the absence of any news and guidance from the company are the advance in the gold price, the decline of the discount rate, and the rise in volatility. These have been pending for weeks now.

43¢ is not out of the question, but it will be the low only very briefly.

supersize: http://www.flickr.com/photos/11747277@N07/5417137881/sizes/l/in/photostream/

stockcharts.com

Newmont Acquires Fronteer

http://www.theglobeandmail.com/report-on-business/newmont-to-buy-fronteer-for-23-billion/article1892806/

-F6