Precious Metals Market Timing
The Road Less Traveled
Trading the gold E.T.F. using Delta medium turning points

Ron Rosen
Oct 4, 2005

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

Trading gold on the commodity exchange is a risky business as we all know. Trading the gold ETF on the New York Stock Exchange using Delta medium turning points, by comparison, is a quiet stroll down a beautiful country road. This simple and elegant way of trading gold is not known by many. It is elegant because of the use of Delta turning points.

The gold ETF is traded like a stock and the same margin rules apply. Let's call it a gentle way to trade gold and avoid the pits. However, armed with the Delta turning points you will have made yourself into a "Trader Extraordinaire." You won't have to be worried about a $10 or $20 move in gold stopping you out. A $10 or $20 move in gold is a $1 or $2 move in the gold ETF. The symbol for the gold ETF is GLD. The gold ETF does not expire like a commodity contract. You don't have to worry about rolling over contracts, taking delivery, and all the other problems that potentially come with trading a commodity contract. If you are not a commodity pro and don't want to be, but are interested in trading gold, this is the way to go. The most difficult part of trading commodities, for many, is handling the stress. Using Delta and applying it to the ETF should eliminate much of the stress.

A $10 to $20 move in gold will produce a $1000 to $2000 profit on one thousand shares of the ETF.

I will be posting the ETF chart on a regular basis. In addition, I will be posting the results of a hypothetical 1000 share gold ETF trading account using Delta medium turning points.

GLD WEEKLY (ETF)

GOLD WEEKLY DELTA CHART
click image to see chart

The price of gold is still contained within the 23 year parallel channel. However, the increased open interest and volume indicate that a bullish breakout may occur in the future. The price of gold may back off some in order to get a running start and hurdle the barricade. The Delta gold charts posted below show a long term low due in February 2006. Unless that turning point low arrives early, there should at the very least be some backing and filling starting soon.

QUARTERLY GOLD CHART
click image to see chart

This weekly gold chart shows that we are in the area of Delta medium #5 high. Once confirmed, price will be headed for medium # 6 low due on November 16. The range for arrival is between November 2nd and November 30th.

GOLD WEEKLY CHART
click image to see chart

GOLD CORRECTIONS

The Monthly Gold Chart

On all but one occasion, when gold corrected a rise, it went below the previous peak. The one occasion was when gold peaked at $330.70. It then corrected down to $300.30, which was only $4.30 above the previous peak. It appears reasonable to assume that when the gold price reaches a top for this run, it will go below the previous high. The previous high was $458.20. Since this gold move started, the monthly chart shows us that gold has consistently made higher highs and higher lows. This indicates a mighty powerful, long term move is underway. Either Delta long term # 3 high arrived late, or # 4 low came in very early. In very powerful bull moves, Delta highs can arrive late. More time is spent going up than normal. In a very powerful bull move, the lows tend to arrive early because the move does not spend a lot of time going down. However, if Delta # 4 low is in, this would have been an extremely early arrival. I believe Delta # 4 long term low has not yet arrived.

GOLD MONTHLY CHART
click image to see chart

SILVER CORRECTIONS

The Monthly Silver Chart

In spite of all the extreme bullish talk about silver this past number of years, the monthly chart shows us that silvers performance is sub par compared to gold's. However, silver is consistently making higher lows on the monthly chart and that is long term bullish. Silver's percentage increase in this bull move does not compare to its percentage move in the 1970s. This time silver slightly more than doubled. In the 1970s, a comparable time period, silver went from $1.28 to $6.44. That was a 500% move.

Silver had an IN- BETWEEN POINT and made a Delta long term # 2 low. The # 3 high was made on time, even though the IN-BETWEENPOINT was higher. We are now headed for Delta long term # 4 low, due in February 2006 with a standard deviation out to May 2006.

SILVER MONTHLY CHART
click image to see chart

The Super Silver Bugs have been waiting a long time for silver to outperform Gold, based on the silver shortage. So far, in this bull market, silver is lagging gold's performance and has not made a new high as gold has. If you are a Super Silver bug do not despair. Silver under performed gold in the last precious metals bull market in the 1970's. Near the end of the Bull Run for the precious metals silver woke up and put on a spectacular performance. A Delta medium # 5 high may have been made or will be soon. The next stop will be Delta medium # 6 low, due on November 16th. The range for arrival is between November 2nd and November 30th. The silver shares seem to be lagging behind the gold shares. That may be an indication that silvers timing may repeat the timing of the 1970's or continue to under perform gold.

SILVER WEEKLY CHART
click image to see chart

The HUI either has or will shortly reach a high at Delta medium # 3(green). It also is in the range of Delta long term # 11 High. Delta long term # 12 is not due until January, 2006.

There are a number of technicians who believe that the HUI completed a three wave correction and has started the second or next bull phase with this move up from the 165 area. I am not so sure for several reasons. The HUI could still have one more wave down to make this a five wave correction. Rather then go into a detailed description of the various types of corrections we could still witness, I prefer to hold judgment on whether or not the next bull move has started. Let's see what the Delta highs do to the price. If you look back at the Delta long term highs and lows on this chart, you will see that they have been an excellent guide as to the coming highs and lows.

HUI WEEKLY CHART
click image to see chart

HUI MONTHLY CHART
click image to see chart

Newmont Mining

The Newmont Mining chart appears to be duplicating the HUI chart.

NEWMONT WEEKLY CHART
click image to see chart

Stay Well,

Oct 1, 2005
Ron Rosen

email: rrosen5@tampabay.rr.com

Tee charts reproduced courtesy of The Delta Society International.

321gold Inc