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concluding.
W.D.
Gann was correct to attach importance to anniversary dates and he was familiar with the echo effect of the investing publics
psyche in response to major market events. The intense fear of 2008 has been gradually eroding all year and while a measure of
fear is still discernable today, it will be eventually replaced by something akin to enthusiasm at the next major top.
If you needed further evidence of the effects of the peaking 10-year cycle this month, the price of gold should suffice. In a recent
newsletter we discussed the possibility that investors would flock to gold in September as the 10-year cycle peaks, just as they did
in September 1999 during the previous 10-year peak. It appears that this is just what they did based on the action of early
September
The last time the 10-year cycle peaked in September 1999 also saw a huge upward spike in the gold price. In late September 99
Gold,
stocks and
the 10-year
cycle peak.
Smartp
Map into
10/3/09
09/07/09.
Gold
Breakout to
1125+.
Seasonality
into Labor
Day.
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the gold price went from about $255 to around $325 as the 10-year cycle peaked. This reflected a run into gold by investors over
fear generated by the decline in the stock market that began in July that year and culminated in October.
gold
Smartp
Map into
10/3/09.
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In this regard the gold price can be viewed as a surrogate Volatility Index, which in turn measures investor fear. Heightened fears
over Chinas economic outlook, coupled with concerns over the U.S. governments ability to keep the recovery going, has led to the
latest rush into gold. This is in some ways similar to the September 1999 situation in that saw the gold price spike as investors
reacted to the July-September correction in the stock market. Stocks found bottom shortly after the 10-year cycle peaked and the
gold price reversed lower at the same time. But for a while it was gold that enjoyed the benefit of the final peak phase of the 10year cycle in 99 and it looks like this Septembers 10-year cycle peak will also be good to the gold price.
gold2
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but we are optimistic about the future of the metals. That gold and silver price has tremendous opportunities for gains going
forward. When prices finally peak there is a risk of a bubble at the top of these markets. Gold could run two-to-three thousand
dollars. We could see $25 to $50 silver. I consider myself a modest bull. Long-term, the sustainable prices of these metals in U.S.
dollar terms will be significantly higher than current prices.
Clif Droke is the editor of Gold Strategies Review., providing forecasts and analysis of the leading North American small cap, midtier and senior mining stocks from a short- and intermediate-term technical standpoint since 1998. He is also the author of
numerous books, including How to Read Chart Patterns for Greater Profits. For more information visit
http://www.clifdroke.com
September 9th, 2009 | Tags: 10 Year Cycle, Clif Droke, gold, Gold breakout, Kress Cycle, Timeandcycles,
www.timeandcycles.com | Category: Clif Droke | Comments are closed