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THE
MAGNIFICENT SEVEN Background:
And There Will Be Rumors of Bears: Chart 1 shows the Magnificent Longwave (Monthly) Cycles as they look riding thru Gold from 1968 thru Oct 2004. The filter sum of the monthly cycles is shown on the chart versus the actual closing prices. Although Gold appears to be currently making a parabolic-type trend line, the graph is based on assuming a conservative linear upwards trend in the price of Gold of about $4 per month. The “Big Cycle”: Chart 2 shows the largest monthly cycle in Gold, which is the 86-month cycle. This cycle in Gold is actually heading downward and will form a final bottom in July 2006, which is consistent with a final attempted rally in NYSE. This longwave Gold cycle has been a leading indicator of coming major moves in Gold. This cycle also suggests a huge coming Bull Market Rally in Gold from early July 2006 thru June 2010 or beyond depending upon political conditions. The fact that this huge cycle has not yet bottomed strongly indicates another attack on the price of gold can be expected and will come by mid-2006 prior to the start of the major Bull Market Rally. When Is The Last Gold Train Leaving The Sierra Madre?: Chart 3 shows the comparison of the detrended price of Gold since 1968 versus the 86-month cycle in Gold. This chart strongly suggests there is going to be another major attack or downleg on the price of gold until it bottoms in mid-2006 (i.e., the Commercials may try and use this as a set-up for the Big Dance). However, at the time of this attack it is expected the price of gold could be around/over $500 an ounce. The magnitude of the drop in price could be about $40 -$60 an ounce based on the current amplitude of this cycle. This is the completion of a downside move in Gold that began in Oct 2003. It simply means there is additional time to accumulate the precious metals before launch in Aug 2006. Houston, We Are Go For Launch: Chart 4 shows the predicted price of Gold thru 2008 based on assuming a linear trend line with the current cycles in Gold. There should be a strong push upwards in the price of gold from Dec 2004 thru April/May 2005 followed by a sideways trading pattern with an upward bias. The real fun starts after June/July 2006 with the bottom of the huge 86-month cycle in gold. A number of longwave cycles will form a bottom in this timeframe leading to a Mega-Bull Market in the price of Gold (and Silver). Also, it is possible “political events in mid-2006 (Iran/North Korea?)” could also support a gold rush. The Commercials also know this is coming and they are not about to step in front of the train they have been riding all along. Now everybody knows what is coming? Got gold? Now, if they can just fend off GATA for another 18 months – the problem may disappear. “Houston, we are completing refueling of Apollo Gold at this time – all systems are Go for Launch. You may start the Launch Sequence in Dec 2004.” Eighteen…Seventeen….Sixteen…. Remarks: For all you “Gold Miners out there in Internet Land”, we close with a little parody from the California “Gold Rush” days: “All The Gold In California” Gatlin Brothers. “All the gold in California is in a bank in the middle of Beverly Hills, in somebody’s else’s name, So if your dreamin’ about California, It don’t matter at where you played before, a Gold Bull Market is a brand new game.”
DISCLAIMER: The author is not a registered stockbroker nor a registered advisor and does not give investment advice. His comments are an expression of opinion only and should not be construed in any manner whatsoever as recommendations to buy or sell a stock, option, future, bond, commodity, index or any other financial instrument at any time. While he believes his statements to be true, they always depend on the reliability of his own credible sources. Of course, the author recommends that you consult with a qualified investment advisor, one licensed by appropriate regulatory agencies in your legal jurisdiction, before making any investment decisions, and barring that, we encourage you confirm the facts on your own before making important investment commitments.
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