In my February 15, 2013, Mining Deep for Gold, I concluded by writing “I suspect far greater losses are in store for gold before a bottom is seen.” Since that commentary gold has lost another $250/oz. The question in the minds of many today must be ‘when will this decline end?’

Middle Section Counts
The February article illustrated a 48-week cycle which pointed to a turn in the price of gold in mid-May. Cycles expand and contract and this one is no exception often expanding to as long as 50 weeks. To narrow the forecast time period we can use the middle section model. The concept of a descending middle section was developed by George Lindsay and is essentially a decline (B to H) in a long bull market interrupted by two small rallies (E and G) at about the same level. Point E, the first of the two rallies, is called the “measuring point”. In the December 2009 middle section, point E falls on December 11.

Point E counts 634 calendar days to the intra-day high of the basic cycle on 9/6/11. Counting an equidistance forward in time targets a low on Saturday, June 2 – leading me to expect a tradable low in gold on either the previous Friday or following Monday.

For more analysis like the above, take a ‘Sneak-Peek’ at Seattle Technical Advisors.com

Ed Carlson, author of George Lindsay and the Art of Technical Analysis, and his new book, George Lindsay's An Aid to Timing is an independent trader, consultant, and Chartered Market Technician (CMT) based in Seattle. Carlson manages the website Seattle Technical Advisors.com, where he publishes daily and weekly commentary. He spent twenty years as a stockbroker and holds an M.B.A. from Wichita State University.

© 2013 Copyright Ed Carlson - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

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