Precious Metals – Forex - Stock Indices - Commodities

January 14, 2009

“Time is more important than price; when time is up price will reverse.”
W.D.Gann

UPDATE

"The gold price on the last trading day of 2008 must close higher than the closing gold price on the last trading day of 2007 if the pattern of continuous year to year closing strength is to be maintained. The pattern of the year end closing gold price being higher than the previous years closing gold price has been maintained since the year 2000. The list posted below represents the closing year end gold price for the years 2000 through 2007." Ron Rosen


The closing price for gold bullion in 2008 was $885.50. This maintained a nine year sequence of a higher year over year closing price. This once again portends a strong year for gold and a continuing higher year over year closing price.

A few important instructions From W. D. Gann

HISTORY REPEATS

"The Bible says, "There is a time for everything." All the laws of nature teach this. There is a time to sow and a time to reap. The four seasons of the year teach us that there is a reaping time and a sowing time, and that we can not reverse the order of nature's laws. It is the same with the commodity and stock market. There is a time to buy and a time to sell. You must learn to go with the tide, and not against it."

STUDY OF THE PAST

"When you learn the past history of a commodity, learn the way it is running, what cycle it is in, and make a trade on definite knowledge, your chances for success are 100% greater."

"Nothing will help you more than going over the past history for commodities, studying its actions under different periods and applying the rules that I will give you later. If you know what a commodity has done in the past, you have a better chance to determine what it will do in the future."

"You should keep charts and records of past market movements because your memory is too short."

"By studying past history and knowing that the future is but a repetition of the past, you can determine the cause according to the time and conditions. Sometimes it is necessary to go a long way back to determine the cause, because you must study war, its effect, and the conditions before war and what follows.

"You can not have too much information or too many records when you are going to risk your capital."

"The most important of all is the Time Factor."
30 YEAR CYCLE
"THIS IS THE MAIN CYCLE AND THE MINOR CYCLES ARE
PROPORTIONATE PARTS OF THE 30-YEAR CYCLE OR CIRCLE."

"You can not have too much information or too many records when you are going to risk your capital."

"The most important of all is the Time Factor."
30 YEAR CYCLE

"The 30 year commodity cycle is the most important cycle."
W. D. Gann

"A Commodity Super Cycle has been in existence for almost 100 years. The peaks have occurred approximately 30 years apart. These cycles began after the Federal Reserve System and the Internal Revenue Service were created in 1913. The tops occurred in 1920, 1950, and 1980, and the current cycle is on course to peak in 2010. We know that the peak of the last gold bull market occurred in January 1980. That was the peak in Super-Cycle III. It appears that the current bull market in gold has a high probability of peaking with the 30 year Super-Cycle IV." Ron R.

"Since the year 1913 when the Federal Reserve System was established there have been two extreme gold bull markets. The first gold bull market was confined to gold shares because the price of gold bullion was fixed. The second cyclical gold bull market was accompanied by freely traded gold bullion. Between 1970 and 1980 gold bullion and gold shares started and completed a huge bull market. The last 23 months of the 1970 to 1980 gold bull market witnessed a huge move up. We are currently living through gold cycle number three. The chart posted below shows the S & P 500/gold ratio. This ratio over the 80 year period shown has made higher highs and lower lows. We should expect a lower low before this bull market in gold / bear market in the S & P 500 is over. This means an extreme high for gold and an extreme low for the stock indices." Ron Rosen

I believe that the Delta Long Term # 3 low which is due 2/18/2009 actually bottomed in the month of October 2008 at $698.50.

"For the 12 month stretch leading up to March, March has never been the lowest month for gold since this gold bull market began. For the last 7 years the October gold low has been lower than the March gold low. Therefore, I believe that the highest probability is that we have witnessed the low for gold at the recent October low." Ron R.


The next Delta Long Term high is due to arrive 2/17/2010.

GOLD YEARLY CHART
"The most important of all is the Time Factor."
30 YEAR CYCLE

"The 30 year commodity cycle is the most important cycle."
W. D. Gann

We are in the process of finding out if the 30 year gold cycle is still intact.

The 1978 monthly gold chart posted below shows us that from the monthly breakout above the four year old high until the final low of the breakout testing period 10 months elapsed.

The 2008 monthly chart posted below shows us that from the monthly breakout above the twenty nine year old high of $850.00 until the final low of the breakout testing period 10 months elapsed. The recent bottom of $698.50 in October 2008 was the ten month bottom.

A close look at the 1978 monthly chart will show that a new high occurred two months after the final monthly test. A two month correction followed the new high and only then did the gold price really takeoff.

The 2008 time pattern is closely following the 1978 time pattern. This includes the breakout that occurred with a one month difference 30 years apart. The breakout in 1978 occurred in the month of February. The breakout in 2008 occurred in the month of January. Is this remarkable? We won't have to wait long in order to find the answer to that question. Notice that the ultimate high in 1978 occurred 23 months after the breakout. 23 months after the breakout in 2008 the price of gold will be well into the standard deviation time of arrival for LTD # 4 high. If, and it is a very big if, the 30 year gold cycle is still intact the ultimate high for the current cycle may occur in 23/24 months at LTD # 4 high.

GOLD MONTHLY 1978
GOLD MONTHLY 2008
GOLD MONTHLY 1978
GOLD MONTHLY 2008

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The total world's holdings of gold could be transported by a single solitary oil tanker.

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