-- Posted Tuesday, 30 January 2007 | Digg This Article
Written January 12, 2007, by Fred Starkey
September 27, 2006: “Based on the Timing indications from the Monthly and Weekly graphs; the January time window is anticipated to be the low turning point for the beginning of another major move to the upside.” “Projected Low Timing is due the week beginning January 8th.”
“Every economist and securities analyst knows better than to say “when” and “by how much” in the same sentence. Many a clever forecast has been confounded by the PROBLEM OF TIMING. It is one thing to see the future. It is an entirely different matter to know when that future will occur.” *(1)
You might say that this report goes against the trend or mainstream thinking in that timing indications are given through mathematical theories based mostly on the irregular geometric projection theory. Through this method the report intends to tell you the time for the lows and the expectations for price on the upside. Moreover, this methodology intends to answer the “problem of timing” with specific dates for selling culminations under other market principles of analysis in a structured format.
As of this writing the Gold Market made bottom on Friday, January 5th and Silver made bottom on Monday, January 8th. Based on the rule of balance I believe the lows are in place. The market projects the next low turning to take place the week beginning February 26th with the next major low timing due the week beginning June 11th.
Time Evaluation: The Rule of Balance
Once a trend is in force reactions against the trend tend toward equality in price and time. This analysis continues to note this principle basis the Cash Monthly Gold and the Cash Monthly Silver.
Since the Gold bottomed in 2001: monthly reactions in time had been no longer than 2 months before resuming the upside. The one month decline into June of 2006 at 567.00 was exceeded in October at 560.70. But the market quickly recovered after 4 market days and is still holding above this important support point. Therefore the major uptrend is still intact.
Since the Silver bottomed in 2001: monthly reactions in time have been no longer than 4 months. The 4 month reaction occurred in 2002 which was the longest correction in time. Reactions in time after 2002 have been 1 – 2 months. The decline into June of 2006 was a one month correction. The Time Balance is in perfect order and therefore the Major uptrend is still intact: we must remain bullish.
Evaluation: The Rule of Balance
Since Gold bottomed in 2001 reactions in price had been 62.20, 52.20, and 42.30; with each price reaction being less in price than the previous reaction. This was a very bullish indication. The reaction from the May 2006 high to the June 2006 low was 158.00 which exceeded the previous price reactions. However, this reaction did hold the 50% level of 568.00 which kept the market in strong position and the bull market intact.
Silver experienced a price reaction of 2.67 from the April 2004 high and a 5.10 reaction from the May 2006 high. The first reaction was slightly past the .618 retracement level of 5.565 at 5.650. The second reaction at 9.83 was also slightly past the .618 retracement level at 9.85. Both reactions should be evaluated as .618 retracements of the previous advance. Therefore, the market is staying in balance and is very orderly: based on this criterion, the market is poised to resume its bullish trend.
Moreover, it is important to note that since the May High reactions in time have been almost equal before resuming the upward trend. The first reaction in time was 22 market days, the second reaction was 21 market days, and the recent reaction was completed in 20 market days. This orderly price behavior also suggests that the market is in position to resume the bullish phase. In addition, each decline has been less in price than the previous reaction which suggests strong underlying support: this is bullish.
Forecasting in Price
Section Count:
As a general rule, markets advance in 3 or more upward sections. The balance rules of price and time are used to measure the trend and the buying and selling pressure. Where sections begin and end is many times subjective similar to Elliott Wave leg counts. This is the current reading.
Gold: The first section began from the 2001 low and peaked at the December 2004 high of 453.40. The beginning of the second section began from the February 2005 low and peaked in May of 2006 at 725.00. The third section is projected at 775.00, basis the Cash Weekly. (See Price Projection)
Silver: The first section began from the 2001 low and peaked at the April 2004 high. The second section began at the August 2005 low and peaked in May of 2006 at 14.93. The third section is projected at 21.50 – 22.50. (See Price Projection)
Price Projection:
Gold: The October 2006 low which slightly exceeded the June 2006 low set up a bottom formation for a price projection. The Turn-Around Bottom formation *(2) projects an initial advance to 710.00 with a longer term upside objective at 775.00. The 710.00 upside objective should be achieved after the February low timing. The 775.00 target is also a possibility before declining into the projected low timing due June 11th.
Silver: Using the first section of this market from the 2001 low to the 2004 high at 8.235 we can project price using the squaring of Fibonacci numbers. The May 2006 high, using the Fibonacci squaring projected a price objective at 14.99; the high was 14.93. The 3rd Squaring added to the 2001 low projects the next upside objective at 21.76. This also coincides with the Turn-Around Bottom formation which projects 22.00.
The next projected upside objectives, using the Fibonacci squaring, are: 32.70, 50.53, 79.05, and 125.40. The Turn-Around Bottom formation projects the next upside objectives at: 37.00, and then 52.00. For now, we now have 2 price projections at the 21.50 – 22.00 level, which should be the next price objective.
Cycle Timing:
The irregular geometric time projection forecasts the next low for Silver the week beginning June 11th of 2007. This also coincides with the 34 month cycle low which is due ideally in June of 2007.
The 26 week cycle low which was due the week beginning January 8th is due recur ideally the week beginning July 9th; this suggests that a higher bottom above the June low should take place at that time window.
Forecast and Recommendations:
Based on this structural outline as presented a forecast can be made.
Basis the Cash Monthly for Gold and for Silver, based on the rules of Time and Price Balance, both remain in strong bull markets. However, Silver, based on the Time Balance, is now in stronger position than Gold. The current timing suggests a rally off the January low with a pullback into the week beginning February 26th. This should bring a strong advance in Gold to 710.00 and possibly 775.00. Silver will be expected to reach 21.50 – 22.50 before suffering a correction into early June.
*(1) Richard Duncan, The Dollar Crisis: Causes, Consequences, Cures: page 197,
John Wiley and Sons, 2005.
*(2) Tubbs: a market technician in the early 1900’s.
*(3) All Prices are basis the Cash Data from CSI.
Written by Fred Starkey: HarborLightsInvestment@msn.com
-- Posted Tuesday, 30 January 2007 | Digg This Article
