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Gold Price Breakout or B Wave Corrective Top?

Commodities / Gold & Silver 2009 Sep 16, 2009 - 01:30 PM GMT

By: Ronald_Rosen


Best Financial Markets Analysis ArticleMr. Leonardo de Pissa better known as Fibonacci is saying not so fast don’t count me out just yet. I suspect that he is referring to the quarterly gold chart posted on the next page.

In honor of our dear Italian friend Fibonacci, (technically speaking), an offering from the recently departed Luciano Pavarotti.
      Click here   v  O Sole Mio

   The Leaning Tower of Pisa


“In a regular flat correction, wave B terminates about at the level of the beginning of wave A, and wave C terminates a slight bit past the end of wave A.”    E. W. P.


(Note charts 1 - 4 are identical)


“Far more common, however, is the variety called an expanded flat, which contains a price extreme beyond that of the preceding impulse wave. In expanded flats, wave B of the 3-3-5 pattern terminates beyond the starting level of wave A, and wave C ends more substantially beyond the ending level of wave A.”    E. W. P.


As shown on the charts above there is a reasonable probability that a slight new high in gold may be completing the corrective wave B of Major Wave Four of the bull market in gold that began in September 1999. If so, the next move will be corrective wave C down. The formations may be either a regular flat correction or an expanded flat correction as shown above.  However, there is more evidence that hints of a corrective wave B of Major Wave Four topping either at or slightly above the previous all time high of $1033.90.


These four quarterly charts of gold contain the trading information of both the Pit “open cry” on the Comex and the electronic trading information. Pit trading on the Comex takes place between 8.30 A. M. and 1.30 P.M.  Electronic trading takes place between 6.00 A. M. and 5.15 P. M.  Both are Eastern Standard Time. The total open issue and volume for all contracts is shown beneath the chart. During the entire rise of Major Wave Three, open issue and volume were rising. They began declining at the peak price of $1033.90. A new bull wave does not begin on declining open interest and declining volume. Of great interest should be the fact that a peak in price occurred at quarters 5, 8, 13, and 21. Gold is now only 10 trading days away from completing the quarter due on Fibonacci # 34 as shown on the chart. Will Leonardo once again deliver a temporary top to the gold market? If he does what should be of great additional interest is what has occurred in the past when a temporary top occurred in quarter 5, 8, 13 and 21. Horizontal lines have been drawn starting at each Fibonacci top. Notice that after each “Fibo” top, 4 to 10 quarters have passed when price once again dipped below that top.


This is one of the most important charts that gold investors can follow. Every year since the bull market in gold began the price has made higher highs and higher lows. This is a pattern that if broken this year by a failure to make a new high above $1033.90 will be a warning that should not be ignored. Any market pattern that has been in effect for seven years and breaks down is and should be an eye opening severe warning of danger ahead. As I have pointed out numerous times the broken pattern in the HUI warned of the subsequent collapse from the 519.68 level to the 150.47 bottom. That was a disastrous decline indeed! So it is either a new high in gold this year 2009 or we should once again consider lightening up in our commitment to the gold complex.


Gold has reached the standard deviation for time of arrival at Delta Long Term # 4 high. The next Delta turning point is # 5 low due to arrive October 20, 2010. The standard deviation for arrival of Delta Long Term # 5 low is between July 2010 and January 19, 2011. 





“Humans have a "triune brain", composed of a reptilian complex, a limbic system and a neocortex, each of which is involved with different aspects of the human experience.

The reptilian and limbic parts of our brain have extremely powerful influences on our behaviour, much more so than the rational neortex.  In addition, those parts of our brain are incapable of learning – they simply repeat their programmed patterns over and over, regardless of the actual external circumstances.

We can sometimes direct our behaviour towards the rational conclusions of our neorcortex, but if the lower levels of our brain are generating unrecognized, opposing messages they will win out every time.

Human group behaviour is largely a product of unconscious, limbic-mediated herding instincts.

Some individuals have sufficient charisma and access to mass communications to induce herding behaviour in the rest of the population.

It's only in those leading individuals that "reason" or anything like it might shape the herd outcome.

However, most leaders do not reason.  They operate mostly out of their reptilian-complex instincts, so the herding behaviour they promote will serve their personal r-complex needs for dominance, status, survival and mating.

For those few who have the opportunity and ability to become herd leaders, the rewards for the r-complex are so strong that it will not permit behaviour that might jeopardize the rewards.  The leader sees no reason to change a successful strategy that fulfills the deepest needs of the organism.

Personal enlightenment is aimed at  reducing the control of the reptilian and limbic brains over our personal responses and behaviour.  It attempts to do this by increasing our cortical awareness of the influences of the other two thirds of the triune brain.  Increasing that awareness allows the neocortex to detect and consciously intervene in otherwise unconscious responses. To a greater or lesser extent, it works that way in everyone who has had an awakening or enlightenment experience (and especially among those who have followed it up with continued inner work aimed at strengthening that ability).

Enlightenment of this kind is not a change of attitudes toward compassion, altruism, cooperation or any other "enlightened" values.  That shift of values is a result of the awakening, not its cause or essence.

It's vanishingly unlikely that this sort of enlightenment will be pursued by those in power.  As I said before, they have no incentive to do so, and their reptilian complex will actively discourage it. 

For someone who is not in power however, there is an incentive to pursue this kind of enlightenment.It gives them more ability to chart their own course, and reduces their susceptibility to being herded.  As a result they may be able to accomplish more of their own goals.  Of course the level of awakening varies enormously from person to person, but even people who simply develop a light green environmental awareness have brushed against it.

One thing I have observed is that awakening is not necessarily an unpredictable and uncontrollable event.  There are techniques that facilitate it. I've experienced it, and have seen it work in much the same way in most others who go through he same program I did.  It's still an experiential process that is much more of an art form than a science, but I have seen it work.  And of course, many people are awakening in the time-honoured tradition – spontaneously, in response to a crisis whose perception has both limbic and cortical components.”



It is the automatic collective human response patterns in the gold market and other markets that I constantly search for. It is those collective responses that show up in very active and widely participated in markets that provide us with the clues as to what we should expect next. The wave theory is one way of measuring these responses. The Delta Turning points provide us with the approximate time of arrival for each wave.

We are fortunate in that we are looking for clues regarding wave patterns in a market that has previously provided us with the clues and answers we need. The wave patterns that occurred in the gold bull market from 1968 to 1980 should be and are recognizable and unfolded with minor differences from the current bull market in gold.

Subscriptions to the Rosen Market Timing Letter with the Delta Turning Points for gold, silver, stock indices, dollar index, crude oil and many other items are available at:

By Ron Rosen


Simeon - A Picture of Patience

Ronald L. Rosen served in the U.S.Navy, with two combat tours Korean War. He later graduated from New York University and became a Registered Representative, stock and commodity broker with Carl M. Loeb, Rhodes & Co. and then Carter, Berlind and Weill. He retired to become private investor and is a director of the Delta Society International

Disclaimer: The contents of this letter represent the opinions of Ronald L. Rosen and Alistair Gilbert  Nothing contained herein is intended as investment advice or recommendations for specific investment decisions, and you should not rely on it as such. Ronald L. Rosen and Alistair Gilbert are not registered investment advisors. Information and analysis above are derived from sources and using methods believed to be reliable, but Ronald L. Rosen and Alistair Gilbert cannot accept responsibility for any trading losses you may incur as a result of your reliance on this analysis and will not be held liable for the consequence of reliance upon any opinion or statement contained herein or any omission. Individuals should consult with their broker and personal financial advisors before engaging in any trading activities. Do your own due diligence regarding personal investment decisions.

Ronald Rosen Archive

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