Advertise | Bookmark | Contact Us | E-Mail List |  | Update Page | UraniumSeek.com 

Commentary : Gold Stock Review : Markets : News Wire : Quotes : Radio : Silver : Stocks - Main 
  
 GoldSeek.com >> News >> Story  Disclaimer 
 
Latest Headlines

GoldSeek Radio Nugget: Listener Q&A with host Chris Waltzek
By: radio.GoldSeek.com

Nelson Hunt the man who took silver to $50 in 1980 dies aged 88
By: Peter Cooper

OCTOBER SILVER EAGLE SALES BEST EVER…. And With 10 Days Remaining
By: Steve St. Angelo, SRSrocco Report

The World According to Chartology: Update
By: Rambus

Gold Seeker Closing Report: Gold and Silver Fall With Stocks
By: Chris Mullen, Gold-Seeker.com

Connecting the Dots: 5 Warning Signs Point to Real Estate Market Downturn
By: Tony Sagami

The inevitability of QE
By: Clif Droke

About That Referendum in Switzerland…
By: Michael Lombardi, MBA

Gold or Crushing Paper Debt
By: Gary Christenson

100% of Mainstream Interest Rate Theory is Wrong
By: Keith Weiner

 
Search

GoldSeek Web

 
Gold: History Doesn’t Repeat Itself, but It Does Rhyme



-- Posted Thursday, 15 November 2012 | | Disqus

By David Nichols, Fractal Gold Report

Mark Twain wasn’t writing about the gold market when he made his famous quote about historical recurrence, but he could have been, as the gold market has been “rhyming” every 21 months.

Every 21 months there has been a major peak in the gold market, going back to the start of this bull market, over 13 years ago.  Gold is now 8 months from the next scheduled 21-month peak, which should arrive in July 2013.

The gains in each cycle have ranged between 80% and 97%, from the low of each cycle up to the top.  This is surprisingly little variation, at least as far as financial markets are concerned.  This is about as steady as it ever gets.

If it happens again, gold will be around $2,700 in mid-2013. 

So far this particular 21-month cycle is tracking well, as gold is primed and ready for launch into the final major growth phase.

This chart shows the monthly fractal dimension of the gold market, which is a specific measurement of the linearity of a price pattern.  Essentially it is telling us whether a market’s movements more resemble a line, with prices moving from Point A to Point B (fractal dimension of 1), or whether the movements are more haphazard, with the movement more resembling a plane (fractal dimension of 2). 

Although not a lot of people stop to think about it, when we enter a market we are attempting to capture just this type of linear movement, with a market moving from our entry at Point A to a profitable exit at Point B. This is where the fractal dimension comes in, to let us know when the probabilities of capturing such a move are in our favor, and also when the linearity of a trend is “maxed out.”  It’s very valuable information.

When the fractal dimension of a market is high, it is loaded with available energy and ready for a major trend.  Right now the fractal dimension of the monthly gold chart is as high as it’s been during the entire bull market, meaning there is more energy now embedded within the pattern to power a strong trend than at any other time in the past 13 years. An 80%+ rally is definitely within reasonable expectations for this cycle.

There are specific reasons why the number 21 is so important in market cycles, having to do with the fractal nature of financial markets.  Something is fractal when it is self-similar in all sizes and time-frames –when the small parts look like the big parts.  The patterns are the same at every scale.

A fractal system is therefore governed by scaling factors, and in markets these scaling factors describe the way prices expand and contract.   But here’s where it gets really interesting:  time in markets also scales according to fractal patterns. 

86.6 is the universal scaling factor for time in markets.  I realize you have to take my word on this in such a short article, but it’s not a coincidence that the human life span is 86.6 years, as we are also governed by this cycle.  One-quarter of 86.6 is 21.65, which is why the drinking age is 21, and also why the retirement age is 65 years, the ¾ point of our human cycle.

Fortunately you don’t have to just accept my word that the gold market is organized along this 86.6-based fractal time scale.  The chart below shows a spectrum analysis of the cycles in the gold market, performed by a clever left-brained individual named Sergey Tassarov back in 2007.

In my opinion, the other cycles identified here are harmonics of the dominant 21-month cycle, similar to the way in which musical notes have overtones.

If we delve deeper into this spectrum analysis, we see that in the shorter-term there is a dominant 120 day cycle in the gold market.

And here’s where we get to the clincher: 120 trading days (4 calendar months) works out to precisely 86 trading days. 

It is this 86 day cycle that adds up to form 21-month cycles, on up to bigger yearly cycles, such as the 17.32 year cycle that is common in commodity markets.  In the other direction, this cycle can be found all the way down to the minutes and seconds.  That’s how fractal systems work.

So the bottom line is there is a dominant 21-month cycle in the gold market, which continues to track well, with a scheduled peak arriving in mid-2013. 

If you are interested in more details, I have written a lengthy Special Report describing these cycles and patterns, available to annual subscribers to the Fractal Gold Report.  A 30-day free trial is also available.


-- Posted Thursday, 15 November 2012 | Digg This Article | Source: GoldSeek.com

comments powered by Disqus



 



Increase Text SizeDecrease Text SizeE-mail Link of Current PagePrinter Friendly PageReturn to GoldSeek.com

 news.goldseek.com >> Story

E-mail Page  | Print  | Disclaimer 


© 1995 - 2014


© GoldSeek.com, Gold Seek LLC


GoldSeek.com Supports Kiva.org

The content on this site is protected by U.S. and international copyright laws and is the property of GoldSeek.com and/or the providers of the content under license. By "content" we mean any information, mode of expression, or other materials and services found on GoldSeek.com. This includes editorials, news, our writings, graphics, and any and all other features found on the site. Please contact us for any further information.

Disclaimer

The views contained here may not represent the views of GoldSeek.com, its affiliates or advertisers. GoldSeek.com makes no representation, warranty or guarantee as to the accuracy or completeness of the information (including news, editorials, prices, statistics, analyses and the like) provided through its service. Any copying, reproduction and/or redistribution of any of the documents, data, content or materials contained on or within this website, without the express written consent of GoldSeek.com, is strictly prohibited. In no event shall GoldSeek.com or its affiliates be liable to any person for any decision made or action taken in reliance upon the information provided herein.
OilSeek.com