Iâve touched on the subject before but today the similarities have increased even more! 1) In 2009 we had a very large reverse head and shoulder pattern (indications in red) in the S&P500 which signalled a potential bottom after the 2008 bear market. The right shoulder of this pattern was in itself a (normal) head and shoulder (in green). A normal H&S argues for lower prices while a reverse H&S points to higher prices. Obviously one of the 2 has to fail and in that case it was the bearish pattern that failed, giving a clean signal that the trend was up 2) If you look more closely to the green pattern in the SPX, you can see that prices perforated the neckline and after a couple of internal days they reversed strongly up, triggering a bear trap 3) Now look at the 2nd chart, showing gold as of today. You can see exactly the same pattern developing, including a break and the potential failure! To be more confident that the pattern is going to repeat itself, we have to wait for gold to close above 1400, where the neckline passes but I suggest a close monitoring of price action since gold can move very fast sometimes. SPX GOLD http://pentothalta.blogspot.co.uk/
Silver dived deeper and it could stronger up-side potential. I'm already in for a couple of weeks. Even you and me are wrong and precious metal will make another dive down, I will just buy again by adding to my position.
I got stopped out wityh my initial position. Not a problem,it means that we are in wave 5 and i have a target for the movement and a potential setup. More importantly, gold miners are tracing a 5 wave down move, close to compketion. The target for a move in gold miners is much higher than theone for gold so i may well look to allocated to that group nstead of dealing in the metal