GoldHeart Waves The Gold Transition To Breakout

March 18, 2013

Since my last update: http://www.gold-eagle.com/editorials_12/goldheart030713.html on the Daily Gold chart, I have been posting a few notes on the Gold-Eagle. Forum  trying to provide a heads up on the immanent breakout of Gold as projected in that update. I described the oversold condition of Gold and charts characterizing the current transition using GoldHeart waves.

Over the last week it was not clear whether Gold's price was moving forward or backward from one day to another, as if the Gold train had rolled to a hill top and was poised in equilibrium, buffeted by winds. Most likely those winds are only Gold's opponents that never sleep and always surprise. A look at the following charts helps one see that we have in fact been making forward progress that is difficult to observe when watching day to day price movements.

The 3 charts provided includes 2 charts that are extensions of charts from the last update, in addition a Daily chart of the Dow Jones Index is included. The DJI chart has seemed unstoppable lately, and is provided to draw your own conclusions.

FIGURE 1: Daily Composite ST/MT/LT Waves Over The Gold Consolidation Period

This chart was discussed in the referenced update, but has now been extended through 3/15/13.

As of Friday we were in oversold turns in all 3 waves. The Long Term wave has reversed 3 times over the last week, each time it was only by the smallest amount, but as of Friday had switched once again in oversold turn. The Mid-Term wave has definitely peaked and is maturing, while the Short-Term wave approaches a short overbought condition, and gave a head fake Friday but reversed again on and AM Gold fix of $1593.25. I am hoping Gold opens Monday up keeping the overall situation flowing, and drives the ST wave deeper give more time for the longer waves to mature.

 

Figure 1A Expanded Current Breakout Region

This chart is an enlargement of Figure 1 in the region of the current breakout.

A local double bottom in Gold can be seen that resulted from some final positioning and last minute hits from our friendly villains. This was occurring during a double top and reversal in the MT wave that has since matured nicely over the last week. My guess is that the ST wave (circled peak) was the likely start of the transition turns of all 3 waves.  Over the last week the LT wave has undergone multiple reversing over its top, and next week we will see if the current favorable inflected turn can be sustained. Things always move slow when watching day to day especially when holding one's breath in anticipation.  However, this too will pass, and when looking back you will see that is was all a matter of overbought and oversold ebb and flow. That is at least the way it use to be in the old days.

 

Figure 2.  Dow Jones Industrials Daily Chart

This chart is included for your information and personal analysis. I have sensed some doubt about whether the ascent of the DJI could continue.  View this Daily chart and draw your own conclusion. I have omitted the Short-Term wave for clarity, but will tell you it is currently positioned in the red circle and has turned up as of Friday.  Enjoy.

 

Disclaimer: The above is the opinion of GoldHeart and is for information purposes only.

According to the Talmud you should keep one-third of your assets each in land, business interests, and gold.