Mike asks a question on my post on Gold last week about price “targets”. I don’t really do “targets”. Targets imply I know where the top or bottom are and that is not true. I only “know” levels that the probability of a trend change is higher than other areas.
The chart below is an update to the chart posted last week. I have added a 25% price growth line when using the 1999-2008 range. One “target” I would be aware of is the slope of the long term range. “Targets” are time sensitive. An expected high today would be different next year at this time. A quick move up would find resistance around 1170 next month. Resistance moves to 1223 in May. Could price break above the 1×1 angle and move to the 2×1 angle (not shown)? Sure. I doubt it but it could happen.
Suppose the 1×1 angle is broken to the upside. Then the horizontal angles which represent price growth could come into play. The 25% and 50% extension of the previous long term range will also provide resistance. Again, time comes into play when hitting these angles. If price does not touch the 25% price increase line until after May 2010, then the 1×1 slope would be above that angle. This would make the resistance less (or possibly the pull of the 1×1 angle stronger than the resistance). Conversely, if price breaks the 1×1 angle before next May, then the 25% line should provide significant resistance as the 1×1 angle pulls price downward.
Maybe I should do some more reading on Quantum Gravity as that may apply here… 
0 responses so far ↓
There are no comments yet...Kick things off by filling out the form below.