Bill -

Thanks for the great post. I'd like to use your charts to show the new traders what I have been commenting on recently.

The first chart clearly shows the inverted head and shoulders that I recently mentioned.
C is the head.
A, E are the shoulders.
A line drawn by the trader connecting B and D is the neckline (not found in his chart, but close to the $602.20 horizontal line).
The price target, if confirmed, is found by first drawing the neckine. Then measure the distance from C (head) vertically to where your line crosses the neckline that you first drew in. Then take that distance of roughly $42 ($560 head low, to approx. $602 neckline) and add to the $602 neckline for a target of $644.

Second chart shows the downtrend line of significance that I have mentioned. If this downtrend line is broken to the upside, Colin's target is $790. I'd call that a significant rally. Gee, do you think that there might be a fight by the bears at that trendline? We're not out of the woods yet, but it's only a matter of time, IMO. Buy weakness, sell strength.

$614 is the 38.2% fib retrace of the $730 to $542 decline. $636 is the 50% retrace. I expect a fight at those levels as well.

Don't forget, Bill was in the trenches during the last golden bull of the 70's and early 80's. That experience is priceless and although I have been doing this for almost 20 years (first exchange membership in 1988), his experience far exceeds mine in this area. Trust me on this; due to the small size and high level of emotions found in the gold market, I'd listen to a trader who experienced success in the last gold bull over a trader who's only thought on gold at that time was how to get his father's gold plated key chain for the weekend.

Plan the trade, trade the plan.

Good luck to all.

Re: "gold plated key chain for the weekend."

I learned a valuable lesson when I first started posting to Bill's site - if you want to be taken seriously, temper your sarcasm, particularily when posting information that may be helpful to a student of the market. Trust me - it was a lesson I badly needed to learn as a retiree who trades prices in the markets for recreation and a few "want dollars" when I'm lucky. The result: I arrogantly forget that there are hard working, wage earning readers of this site who visit hoping to gain that tiny bit of investing advice that may secure their financial well-being. I'm grateful at my age to still have enough mental faculties remaining to accept and act on constructive critcism.

And as M_ would remind us: if we were all successful at this market, the majority of us would be elsewhere - jet setting on the Riviera, maybe?

If you scrape the plating off that keychain the residue is still gold (-:

g034,
I appreciate your post in explaining the inverted head and shoulders patter.

It helped me understand the context of the discussion.

I am relatively new to the game and post like yours add valuable inputs to Bill's blogs!
Thanks again!!

"... I'd listen to a trader who experienced success in the last gold bull over a trader who's only thought on gold at that time was how to get his father's gold plated key chain for the weekend."

I don't remember the keychain for that '67 Pontiac stationwagon being gold. Silverplate is what I recall. Hmm. I'll have to ask him.

My point behind the "gold plated keychain" was that while Bill was learning trading lessons during the last gold bull, I was still in high school and my own car was unacheivable and that holds true for many "talking heads" on CNBC as well. I came from a middle class family, my parents wedding rings weren't even gold. Can't see how my comment came off as non-serious sarcasm, but if I offended anyone, please accept my apology. As an aside, I don't take myself too seriously, accept for my p&l which has been seriously helped by looking at trading situations like I did in my comment.

Good luck, and let's move on.

ALOHA !!

Oratier posted:
And as M_ would remind us: if we were all successful at this market, the majority of us would be elsewhere - jet setting on the Riviera, maybe?

Sadly that might have been the case many decades ago, but with the constant money supply expansion being the hallmark of a corrupt monetary system even those whose income levels are in the millions still must engage in high risk ventures just to maintain the lifestyle of their Father's. Due to the ever falling purchasing power of a US Dollar it is no wonder the US savings rate is negative. Witness the many game shows that regularly hand out $1million as a prize! After the IRS and State get done you can't even afford a decent house in a mediocre neighborhood ...

Many who work for a living come to this blog and many other financial blogs in order to make transparent what the US government and the Fed and Wall Street refuse to, since anyone with a pulse and a wallet realize the constant rant of a STRONG US ECONOMY rings less true minute by minute. I have had a never ending inkling that "something just isn't right" since the mid 90's ...

"Trendspotting" is a term mainly used to describe fashion and shopping, but it has been a valuable tool for picking up healthy returns from the ever cloudy financial markets. To me the major trend now is gold and silver and has been since 2001. I can see no end in sight until global currency makers reverse course, a task that I believe is way past the point of no return now, especially for the US Dollar.

Bill:

Maybe this is the day, U$D down 35cents to $85.@11:12AM

G034

The explanation on your interpretation of reading the charts posted by Bill this morning was well received here with many thanks.

Bill also posted a GLD P&F chart, a type of chart I have not studied in any depth before, and was wondering how useful you find these, if at all?

What caught my eye was the "bearish price objective" which would mean gold at approx $440.

Not the first time a $400 future price has been mentioned here this week(Tradesman "not expected list") and now here is a chart that makes a statisitcal inference.

I am long the Gold Miners like many but always cognizant of the downside risk potential and not sure if this type of chart is a valid means of projecting targets.

Any help would be appreciated

Very nice action in the miners today. Constructive action in gold also.

Gold plated keychains also up 2% today and silver plated ones up 1.5%.

Long: Miners and keychains. ;)

Golds about the only thing left standing today...

The US refinancing I believe was finished as of today - so maybe the dollar 'prop' is gone.

If a large part of the recent US dollar strength was foreign buying of US securities - the $US dollar could see further weakness if foreigners are pulling out ahead of the election.

Looks like the Dollar contract has some weak trendline support between 84.5 - 85.

If there is no 'intervention' or 'strong dollar inspired crises' - golds could be off to the races.

ALOHA !!

A link to a European "think tank" as to what is transpiring in the US economy and how it will impact the global economy and the US dollar. Just what kind of insurance does anyone have against a declining US dollar and world fiat currencies? Holding Newmont doesn't mean a lot since you can't buy a loaf of bread with a Newmont stock certificate(not yet anyway) ...

Read here what this European 'think tank" attributes the recent drop in oil prices to prior to the US elections in November. Here's a hint "GS" are the initials. I have read that before elsewhere ...

Link:
http://www.leap2020.eu/GEAB-N-8-is-available-November-2006-beginning-of-the-phase-of-impact-of-the-global-systemic-crisis_a184.html

GEAB Number 8 ... they use the term "euphorize" a few times when speaking about the US voters.

Energy Report on Wed....Oil could put in a bottom.

Re: leap2020.eu

Isn't that the same "think tank" that forecast the demise of the US dollar several months back, due to the opening of the Iran oil exchange? Hmm...

After a bit of research, it looks like the people behind this site (and a clutch of other related sites) are trying to organise as a party of "Newropeans" and present themselves for the 2009 EU parliamentary elections.

Take them with a large grain of salt...

Monday view: Paulson re-activates secretive support team to prevent markets meltdown
By

http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2006/10/30/ccview30.xml