CHARTWORKS - NOV 17, 2011
Gold - Three Correlations to Monitor Regarding This Week’s Decline

Technical observations of RossClark@shaw.ca

Bob Hoye
Institutional Advisors
Posted Nov 20, 2011
Written Nov 17, 2011

The daily volatility in all markets continues inside broad trading ranges. Gold has made a standard 60% to 70% retracement rally and the key now will be how well it holds during the current decline. The following pages update the placement of the current pattern development related similar bull markets.

For the 1979 gold market correlation to remain valid the support around $1650 should hold and be followed by a breakout through $1800.

The megaphone pattern and breakout seen in gold in 2002-2003 continues to be replicated. Last week’s 70% retracement of the break from $1923 to $1535 would be followed by retest of the $1500 support level in the next month.

The third scenario is centered on the 8.6 year PEI Economic Confidence Cycle. The action of the T-Bond market at the top of the cycle in 1998 correlates with Gold around this June’s bottom of the following cycle. A quick test of $1685 is likely with any failed rallies then leading to a deeper break to $1520 within the next month.

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-Bob Hoye
Institutional Advisors
email: bobhoye@institutionaladvisors.com
website: www.institutionaladvisors.com

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