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Gold chart shows price take-off point
Posted on 22 June 2009 with no comments from readers
Consider the above chart from the highly respected www.clivemaud.com who also comments:
‘The longer-term 3-year chart provides us with more of a roadmap showing where gold is relative to its major cycles, enabling us to figure where it is probably headed next. Superficially the pattern that appears on this chart looks like a major top area forming beneath the strong resistance approaching last year’s highs, but if we look closer we can see that a bullish high level Head-and-Shoulders bottom has formed beneath the resistance which forms the neckline of the pattern. This formation is remarkably symmetrical and if the symmetry continues gold will complete the pattern shortly by blasting out of the top of it to new highs.’
Posted on 22 June 2009
Categories: Banking & Finance, Gold & Silver, Hedge Funds, Islamic Finance, US Dollar
no Comments posted by readers:
that’s more of a double top and an extremely bearish technical indicator…
Actually if you look at it carefully we have a head-and-shoulders, inverse head-and-shoulders, and then another head-and-shoulders – this is what the chartists read as bullish. If gold was going to dive it would surely have done so after the first head-and-shoulders?
Personally I would always look at the fundamentals as well and not rely solely on charts. Then we see the potential for a short-term gold correction due to dollar strength due to stock market weakness – followed by a surge in gold prices on the inflation outlook. Even deflation would treat gold as a safe haven asset and preserver of value as other assets fell in value.
A word from Mr Katz who saw it all before in the 70s:
http://news.goldseek.com/GoldSeek/1245693866.php
I have to agree with “Wrong.” As I understand it, a H and S is trend REVERSAL pattern so a Head and Shoulders bottom would form after the price has come from ABOVE and DOWN into it. This IS a H and S bottom but the price has come from below to form it. Please correct me if I’m wrong.
Ed Note: H&S shows a reversal but not the direction of the reversal