Stand Strong with Gold - Transition from D-wave to A-wave

In my Consolidation breakout study of gold on 12/19, I illustrated the potential of the 2009 breakout. I published this study, because the D-wave decline, characterized by orchestrated headline-induced fear, was coming.

This commentary was followed by Stand Strong with Gold on 1/06/10. This commentary discussed the long-term potential for gold and was intended to bolster resolve and discipline during the D-wave (Down).

As of April 2010, money flow and time analysis, point to a transition from D-wave (Down) to A-wave (Up). Remember that transitions are processes rather than static points. If investment success depends on a static entry point - single purchase point, the transition process will test patience. Gold is all about control, and control is defined by time (delay of the inevitable).

Within the context of the transition from down to up, please review and updated Consolidation Breakout Study Chart with the following comments:

Force of the breakout is a function of time and range (or volatility) within the consolidation. The force of the breakout (percentage gain from the breakout point), increases as the time and volatility of the consolidation increases.

The 2008-2009 consolidation was nearly the longest and most volatile. This should give it great force to the upside. To suggest that it has topped out after 7-months and 8.5% rally from the breakout ignores the massive energy stored within the previous consolidation.

Gold Consolidation Breakout Study Chart:


Notice how REV(E), yellow indicator, made a new high in 2009. The energy of the tape is increasing.