This past week Gold broke up out of its downward trend regression channel coming down from its summer high around $1350. The Junior Gold Miners Index (JNUG), our favorite vehicle for trading Gold rallies, has about doubled from its mid-December lows and is up 50% from where it broke above its Blue Line Trend-Signal Line. At last summer’s Gold highs JNUG was in the low-30’s. It closed Friday at $10.07.
Weekly price charts offer a longer term perspective for market timing decisions. Although I prefer the Elliott Wave analysis for short-term opportunities, basis the daily or 120 minute charts, the weekly charts below provide a glimpse at (1) what was possible by paying attention to the weekly charts a year ago, and, (2) what may be on the horizon by paying attention to the weekly price charts now. “For informational purposes only”:
I posted several charts in my Weekend Update that all point to an intermediate term market decline in the making from around current levels. No chart will tell you when it is coming, nor how far it will extend, but this chart below provides a clue that it could be longer and deeper than we have been used to for 7.5 years. This weekly price chart counts prices in a clear five waves up from the March 2009 lows, accompanied by a divergence in the momentum oscillator on the bottom of the chart. That momentum divergence confirms that the DJIA is in a fifth wave, the final leg of the entire 7.5 year advance. When it ends, which could be at any time, expect at least 1/3 of the entire 12,700 point advance to be retraced, taking the DJIA down over 4,000 points. For aggressive traders, it could represent the opportunity of a lifetime via inverse leveraged ETF’s (SDS, QID, TZA) as well as a multi-month, or multi-year, Christmas for option traders.