Friday, May 28, 2010

A Consolidation & Breakout Study of Gold Updated

Back on December 19th 2009, consolidation breakout study of gold, I presented the following observations about the breakout of gold from consolidation patterns:

  • Force of the breakout is a function of time and range (or volatility) within the consolidation. The longer the time of consolidation and greater the volatility within the consolidation, the greater the force of the breakout.
  • The latest gold breakout occurred after an extremely volatile and long consolidation. To suggest that it has topped out after 3-months and 9% rally from the breakout ignores the massive energy stored within the previous consolidation.
  • Has gold peaked as so many have suggested on F-TV?

Today's conclusion remains the same. One of the longest and most volatile (violent) gold corrections will produce the biggest breakout move of this bull move. Remember, TA is a function of time and pressure. As each increases, the greater the resulting price move. In other words, this move is not done.

Investors must stand strong with gold because shallow arguments and traders talking their book are design to confuse and misdirect the above message.


A Consolidation & Breakout Study of Gold:

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