Mining Deep for Gold: Part II

By: Ed Carlson | Tue, May 21, 2013
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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.

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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.

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Ed Carlson

Author: Ed Carlson

Ed Carlson
Seattle Technical

Ed Carlson

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, where he publishes daily and weekly commentary. He spent twenty years as a stockbroker and holds an M.B.A. from Wichita State University.

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