GLD

DJIA , Gold GLD, and Oil WTI

Hamilton

djia may 2012

This is a 5-year chart. No absolute amounts , just percentages. Black is the Dow Jones Industrial Average, down perhaps 10% over 5 years. Blue is gold by way of the GLD, up 130% over the same period. Then there is the yellow or brown line representing oil, down 45% from 5 years ago. None of this is the least bit interesting except that things are not supposed to happen this way. All three are directionally correlated quite well, unheard of in economics 101. When correlations move to 1, there is a problem ahead.

GLD, Gold ETF

Hamilton

GLD feb 2012

Watching BNN,  I have noticed that there are now quite a number of commentators that are pretty well certain that gold will now go to $2000 and a lot further. Before you embrace this concept keep in mind that even if the 1-2, 1-2 scenario that I proposed a little while ago did not work out ( it has not yet been entirely negated!), there are still other very bearish counts. The one above is the most prominent.  The wave 2 here is a “running” flat. The RSI seems to support a turn very soon.

GLD , Gold ETF

Hamilton

GLD jan 24 2012

We were lucky having gotten the $1900+ and the $1500 levels pretty well right on. In the mean time we have bounced back up roughly $160 up from the low. This is the point where the light is neither red or green. It is amber so it is best to step aside. The bulls  will be salivating from the mouth for this clean and clear a-b-c correction, expecting a new high down the road. The bears will be doing the exact same thing as they see a clean and clear 1-2, 1-2. A series of 1-2’s is the start of a very bearish downturn, typically the 1-2’s are  similar in shape and retrace roughly equal amounts, in this case about 60%+ each. There are other possibilities as well. The sidelines is the place to be.