I just got a chart from the folks over at McClellan which is thought-provoking. It shows how, if history is any guide, there are anywhere from one to three years left to gold's bullish run (and/or softness in equities):
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Do you guys remember that great E-Trade commercial from the dot.com era where the distraught trader jumps out his office window? He was on the first floor of his house and landed comfortably. I'm wondering if the market just did something similar. I've sort of felt like Ferris Bueller's sister this week with talk of "The Triangle" everywhere I turned. Yes, it resolved to the downside yesterday on a pickup in volume (some technically driven piling on was likely), but did it land on a thick, fluffy zone of support?
The following chart suggests that might be the case:
I am keeping it short tonight, but I wanted to give all of you a quick glimpse into the current short-term state of the market.
Today's post will have to be short as I'm going out soon and will be out for most of the day. I have to be out most of Monday morning as well so Monday's post may also be short.
Obviously the symmetrical triangle broke downwards yesterday and broke down hard enough that I think it is unlikely to be a false break. This is disappointing from a probabilities perspective, mainly as these triangles are poor performers on downwards breakouts, with only a 48% chance of reaching the target in a break down. That statistic is in a bull market and Bulkowski hasn't even given a statistic for these in a bear market as they don't qualify as a high probability pattern in either direction in a bear market. You can see Bulkowski's page on these here.