 CHARTWORKS - APRIL 18, 2005
Gold - The deeper the break.
. .
Technical observations of RossClark@shaw.ca
Bob Hoye
Institutional Advisors
posted April 19, 2005
ChartWorks PUBLISHED BY INSTITUTIONAL ADVISORS
- Pattern Requirements for
a Significant Low are in Place -
- Buy Signals can Occur as Early as Tuesday -
The pattern from the December
top continues to unfold in a similar fashion to seven previous
examples we have reviewed over the past thirty-five years. Successfully
holding above the February low of $410.50 through the end of
April can lead to a very bullish advance.
In the March 27th report it
was determined that the initial "A" leg decline from
the March 11th high ($445) was pretty much complete. The "B"
rally was likely to find resistance in the mid $430's. As it
turned out, the price was capped at $430 on April 13th. The "C"
leg was expected to complete the downside correction from the
$445 high, holding above $417 and producing an RSI(14) reading
in the 30's. As stated: "we can extrapolate a narrowed time
window for the next important low; April 6th through April 14th."
On the 14th, gold broke to a new low producing an RSI(14) reading
of 39.9.
While we've established that
a buy signal in the long term MACD(34,89,9) would confirm an
upside reversal, we would like something more concise on a short
term basis. Therefore, the CCI(20) oscillator is being introduced
as a better means of determining that the "C" leg decline
is complete. If the gold price stays under $424 on Monday the
CCI will generate an oversold reading well below -100. The deeper
the break in the oscillator, the more convincing the subsequent
buy signal will be. Assuming the oversold reading occurs,
we can buy as soon as the oscillator moves back up through -90.
Risk can be maintained below the immediate lows.
This would set the stage for
an assault at the March highs and if true-to-form a measured
move into the $510 to $530 range. Such action would be bound
to have a significant influence on the mining stocks.
The oscillators can be tracked
using the following link: click
Previous examples over the
past 35 years.
(1971,' 73,'74,'77, '78, '87 & '02)
Bob Hoye
Institutional Advisors
E-mail bobhoye@institutionaladvisors.com
Website: www.institutionaladvisors.com
CHARTWORKS #2 - APRIL 18, 2005
Hoye Archives
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