‘Vomiting camel’ formation in the charts has goldbugs nervous about a price plunge

Posted on 04 November 2014 with 1 comment from readers

FM trader Brian Kelly dissects the performance of gold over the last year and compares its pattern to that of a ‘vomiting camel’. Combined with other technical indicators this could mean a downward spike in the gold price of the sort not seen since the collapse of 2008. That of course was followed by a tremendous rally in the gold price to the all-time high of $1,923 of 2011.

If you observe the performance of any asset you would be able to find such interesting patterns in most of them. There are some assets that keep growing without any dull moment. There are those that grow in cycles where there are occasional dips followed by massive growth. And finally there are others that are seen working in cycles where there are ups and downs occurring more or less in a similar fashion with the peaks not shifting too high or too low.

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Getting back to our ‘vomiting camel’ chart, when you have a lot of sources talking about such patterns then it is definitely worth taking a look.

This humourous analysis has a serious point though with financial markets as unstable as they have been recently you could just as easily get a price spike in the opposite direction. Such absurd bear arguments are frequently wrong…