Catflap

For the CIGA's - Have a cigar from 1977

From: http://www.youtube.com/watch?v=M7VLgv9ds98

House/techno from 1978?!

Be patient until 6 minutes in....

From: http://www.youtube.com/watch?v=EI5LG58Q9es

HUI monthly ascending triangle breakouts since the beginning of the gold secular bull market - as we can see, we are on the cusp of a new breakout.

My work is calling for a major peak in gold/HUI in late March 2011 and I'll try and pin that to a day or two nearer the time - I personally think Jim Sinclair's date for the 2nd week in January is going to be too early.

Here's Catflap's very short track record so far!

I think in time rather than price but a toppy price and other technical indicators around a projected peak should all come together. Gold peaked over 6 weeks earlier than equities, but the points I used for equities are still the same which gives me a projected peak of April 7, 2010. A slightly different way gives me a date of April 11, but that's a Sunday so I would say April 12 - so somewhere between those dates is my best guess but it could be way too early.

 

I've not tried forecasting likely peaks for gold before - I don't have the confirming market breadth data like I do with equities or a gold VIX so I wouldn't put too much faith in it. I will however relax and see gold run up in March and then get more cautious as we get to early April.

Gold/HUI peaked on April 9, 2010

No prediction was made for May 2010

I agree with the gold forecast for June - I've got the end of June for a peak with my own work.

All my work is based on HUI and I am long gold mining stocks looking for a peak towards the end of next month (I'll put it here for posterity, but I'm looking for a peak around June 20/21) before a correction and then another move higher into late March 2011 from where I'll be out completely.

 

The new highs that I'm expecting HUI to make between now and early next year will mean the 2008 lows don't get violated again.

Gold/HUI peaked on June 18, 2010

..... but I should have said June 18/21 (if you believe me lol) since I was taking the date before June 21 off Stockcharts which only contains trading days, not Saturdays and Sundays and June 20 was a Sunday - doh!

At least I'm more accurate than Tom O'Brien, have all my positions still and am not shorting gold going into the breakout

Playing around with trend lines now I've got the full Stochcharts package.....

Two from Gino Soccio (1978)

From: http://www.youtube.com/watch?v=_N7BGN3WYno

From: http://www.youtube.com/watch?v=37X4JqOjwJ8

From:

From 1977 - thought the Stratosferic Band one was appropriate as I believe the dollar has peaked and should eventually make a big SPLASH....

From: http://www.youtube.com/watch?v=Dxh0WgabOnQ

From: http://www.youtube.com/watch?v=wqBH0lhSjZ0

From: http://www.youtube.com/watch?v=UOzvPlWAGW0

Old skool

From:

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From: http://www.youtube.com/watch?v=J1QQALFSlSI

This little piggy went to market......

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Liking that. I guess on reflection tracks like that would have been overlooked as most eyes were on what was being heavily promoted coming out of the U.S at that time, producers such as Arthur Baker and Jellybean were producing some absolute floor fillers. The only DJ with National coverage in the UK I guess that would have played such stuff would have been the late John Peel (love him or hate him, his coverage was certainly diverse) and it's a shame the role he played hasn't really been filled as BBC programming seems now to avoid multi-genre eclectic DJs.

Agree with that - I first heard Orbital, Underworld and Oasis through John Peel's evening session. A great man that gave many bands their big break including Joy Division (which gives me a shameless opportunity to post some more New Order!)

From:

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Certainly the best football song ever made..... love that Chris Waddle mullet

From: http://www.youtube.com/watch?v=cPVD0u-FjXU

More late 70's Chic classics.....

From: http://www.youtube.com/watch?v=qbusssh6320

From: http://www.youtube.com/watch?v=rcYb6WqaRds

Listening to this album for the first time today just blew me away - 1982 and from India!

From: http://www.youtube.com/watch?v=conwt8Dy27Y

45 seconds into this track and part of it sounds like something from Obital's second album..... amazing.

From: http://www.youtube.com/watch?v=bNz_um3ipOA

http://www.theoriginalsoundtrack.com/2010/...o-a-disco-beat/

http://www.guardian.co.uk/music/2010/apr/1...ingh-acid-house

The mania phase is a long way off

From: http://www.youtube.com/watch?v=Gk5aRIz17fk

This will be Prechter's thinking too. He recently said 'at some point we'll be looking to move from Dollars to Gold later in the deflation'. He sees a silver low in 2012 and gold not far behind it, I imagine. But he is talking of buying when nobody will want to buy. ie when everyone thinks the gold bull is dead and the reasons for owning it. I find this hardest to swallow in the global environment we find ourselves. I just can't see gold at 280 again myself. 700-800 could be a possibility though. I wonder what you think Catflap?

 

I find myself much confused as to the thinking. Sure I can swallow the Deflation thesis and I can see the Dow/stocks plumetting, I can see pm's falling in deleveraging like 2008 but I can't imagine we'll all be hiding in fiat currencies or the dollar hoping it doesnt go to hell before we all simply pop out to pick up our pm's. This is where I see a brief fall then a run to gold and silver (pm's) as the only safe port in stormy weather.

 

IMO this is no time to sell pm's, but it is a chance to buy gingerly on dips such as now keeping more back for further dips along the way.

 

Why should gold peak 2016/17. I would have thought 2018 at the earliest.

Prechter is an extremist - he's calling for the Dow to go to 400. If he looked at fundamentals, like what yield stocks would give at those levels then you would see it's completely nuts! Dow is currently 10,836 as I write this.....

I do see gold selling off very hard again but probably over a longer period. At the moment I think it will be from early 2011 to mid 2012 which is around 18 months like we saw in the mid-70's. I'll have to do more work nearer the time, but first want to see how my 18-year dollar fractal plays out - if the last leg down doesn't play out like I think it will then I have to re-think everything.

What you do want to do is look at how many oz of gold you got for a years earnings at the start of January 1975 for an indication of how overvalued gold was back then before it's correction. A quick calculation tells me we are around 40oz in the UK so that's still ok, but in January 1975 I think it got down to 30oz (I'll have to calculate that again when I have more time).

At the mania peak in January 1980 it was aound 19oz I think (not sure if that was the 'achievable monthly average' I was using instead of the one-day spike). But if gold gets to £900-£1,000 oz early next year and the dollar is weak then look out - it will probably be about to all change.

Knowing where the peak will come is difficult - originally I thought 2014 based on several factors and a relationship with the prior equity bull market on work I've done looking at the previous 2 gold bull markets. But now I think it will be 2016 because of where the dollar is in the election cycle ....... but then it could be 2020 since it's taken 20 years to make a bottom from 1980 to 2000!

Need some sleep!

Thanks for taking the time to write this. I have to say though I am becoming quite sceptical of wave theory in general, albeit EW or NW. In my humble opinion it can't cater for non-linear events like market manipulation, CB's being net buyers, QE, global sovereign defaults or wars. I'm not at all convinced you can chart what is about to unfold...

 

Do you concur the gold market is manipulated by the likes of HSBC and JPM through the COMEX?

No problem - it's nice to make an intelligent contribution on the gold thread with my ideas and projections which others do appreciate rather than what went on before. I am a (quiet) gold bull and understanding the equity markets/dollar has given me a better understanding of where gold is going I think.

As you can see from my quick work - the speculative part is probably the last three years of a housing boom, stock market boom or gold boom. I've also got some other stuff that I havn't posted yet that relates to the 1930's bull market in gold shares and how that relates to the previous equity boom in the roaring 20's.

I am VERY sceptical about Elliot Wave - I do not believe in it. I've betted against Prechter, Neeley and all the other EW guys since July last year by going long equities and PM stocks and I have been right. Not just in July, but at the end of October and the beginning of February when they were all saying this was the start of the next bear market or 'third wave' down.

I just mentioned about the '5th wave up mania phase' because everyone seems to understand what the 5th wave is - it's the final one. But I don't use any Elliot Wave - it's far too complicated which is it's biggest failing and it's too open to different interpretations with different counts!.

My work is fractal in nature and focuses on time, not price - things do take a certain length of time to happen and patterns do repeat in time. But I agree there are things governments can do that can change the pattern that would otherwise unfold - just like the Dow in 1938/39, the chart pattern goes really weird and is untradeable or when the government placed a short selling ban on financial stocks and then removed it in February 2009. It put an artificial floor under the market so financial stocks could only make their true lows when this was removed, which they did in March 2009.

Catflap, where are we in Winter, in your estimation? Are we sniffing a false, QE induced Spring and thus still at the beginnings of Winter, or about one third way through?

Your post is very interesting, as always, and gives much food for thought. Any crumbs for Japan related thoughts?

Thanks, Jake.

Halfway through the K-winter in the west since it began in 2000 and K-winters last around 20 years. So the K-spring cannot start again before private debt has been purged by either writing it off and/or paying it down. I don't see huge public debt as being so much of a problem because once an economy starts to turn around it can grow it's way out of this huge debt with the assistance of rising inflation. That's what I think will happen with Japan.

A very interesting piece recently from MSW in MoneyWeek about Japan - I do still think they are at the beginning of a new K-spring and this just confirms it even more IMO.

http://www.moneyweek.com/investment-advice...cade-47404.aspx

Interesting post and time-line of events. But I wonder if we will ever see gold go manic.

 

Deflation is a destroyer of middle class worlds and mediocre debt-ridden economies. The retail investor who invested in real estate and stocks might be wiped out by the time we are deep into K winter terror-tory.

 

How can we have an investment mania in the depths of a depression where a lot of wealth has been wiped out and money is scarce? Wouldn't this make a seventies style mania in gold problematic? But then neither would gold get in a bubble, which seems to be a future concern for many buying gold.

 

This leaves institutional money. Once it moves into gold to avoid possible currency depreciation and instability, the CBs would realise the game is up and look to re-boot a new monetary system in which gold would have to play a part.

 

Even if gold only doubled nominally from here, it still would be an excellent "investment" if assets had more than halved in prices. In real terms, the gain is more than four-fold.

Well, the mania doesn't have to come from the west this time - look to the Chinese who are notorious gamblers. Look what recently happened with Chinese pig farmers and other private investors stockpiling copper - that's just a taste of what's to happen with gold IMO.

It's a potent combination - over 1 billion Chinese people with more wealth then ever before who are also big gamblers. If they suffer a property bust or high inflation in the coming years then that could also benefit gold.

Interesting stuff catflap!

 

Do you see the deeper correction in gold happening at the same time as the stock market low in 2013?

I think gold will likely make a peak in Q1 of 2011 and then fall with the general stock market into Q3 2012 (although general stocks will continue to slide into Q2 of 2013) where the dollar will once again be very strong (that's another election year like we saw in 2008). So I see a deeper correction coming if gold gets to $1350 to $1400 first which will takes it back into 3 digits - could be $800 to $900 again, but to be honest I really am just guessing with prices. I focus on time not prices.

You are going to need a deeply oversold condition like this to launch the last 3/4 years of mania into an inflation adjusted peak around $2000 - I don't think it's anything to fear unless you are over-committed. It should be seen as another great opportunity like 2008 was IMO.

2012 is 36 years (2 x 18 year business cycles) from 1976 and the fractal pattern in the dollar index says this is the equivalent point.

What makes you think you have a few years before the mania phase begins?

Because too many people are still punting their money on property, building shares and bank shares. If you think about the different assets that the general public are going to speculate in then they are gold, shares and property.

1966 was a share peak

1973 was a housing peak

1980 was a gold peak

1989 was a housing peak

1999 was a share peak

2007 was a housing peak

2016/2017 should be a gold peak again - do you see the pattern?.

The inflationary Kondratieff summer is shorter, so the speculative peaks are a little closer at 7 years, whereas the low inflation Kondratieff autumn and deflationary (in assets) Kondratieff winter are more like 9 years.

My K-wave theory predicts a major low in stockmarkets in April/May 2013 - after the general public see their pensions and investments mullered for a third time since 2000 with yet another stock market crash, they will see what gold is doing because everyone is talking about it and give up on stocks and BTL.

Having gone through the whole of the 80's and 90's making handsome gains year after year (except for the brief crash of '87 that soon recovered) most baby boomers have never seen times like these in their investing lives. I think money will pour into gold and gold stocks from 2013 because it's making new highs and the second/longer part of the deflationary bust will be coming to an end with inflation then becoming the problem later.

Before all of this can happen though, gold will go through another deeper correction like it did in 2008 which creates another buying opportunity for the 5th wave up which is the mania phase.

Interesting article Catflap. If I may be so cheeky to inquire, what gold junior mining stocks do the wise (catflap, drb etc!) currently hold?

 

giantbat

 

ps. just recently registered - though have been lurking away for a few months on here and HPC. Love the site DrB .

Welcome giantbat - I don't hold any juniors but hold 1 gold share Petropavlovsk (formerly Peter Hambro) and 2 gold funds (investec Global Gold and BlackRock Gold & General). If I had the time, a better broker and more experience then I would consider the juniors but for now I aim to swing trade the above and maybe look at juniors before the final mania phase begins in a few years time.

Another great piece from Adam Hamilton:

http://www.zealllc.com/2010/gsrec2.htm

Some late 70's Giorgio Moroder produced classics

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a cracking extended version here also:

http://www.youtube.com/watch?v=6kR_94qSYVU

..... and in the 80's with Phil Oakey

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One of my favourite bands (which have recently reformed) and major influences ...........

 

Though not my favourite tune by the Specials it still resonates with me today when I have my own children to steer.

Tiz my favourite tune by them - this is the period where I started really getting into music as a 9/10 year old and buying records. It's a shame that Jerry Dammers isn't playing with them though as it's him that really made the music and had the vision - just love the way he plays that organ!. Ghost town also really caught the mood of the day like no other song has since....

Special AKA probably had one really good song and lots of embarassing ones, especially when Dammers was on vocals!. But although dated now, 1984's 'Nelson Mandela' once again proved what a visionary person he was with a powerful upbeat song that would snowball into something much bigger.

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Other 2 tone/ska favourites from that era:

From: http://www.youtube.com/watch?v=IarQsEd0mLg

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Fun with fractals - looks like the rocket is off

 

 

Chart from Gold versus Paper

Nice chart. So gold mining stocks have been in a 5 year bear market relative to the price of gold. As I see it there's more potential for a bigger percentage move in gold mining stocks than physical/ETF's.

You mean this one?

 

http://www.greenenergyinvestors.com/index....0&start=260

Yes, thanks for re-pinning.

Its what we have been expecting (pix lines). Where do you think it will peak in dollars on this move up?

I think in time rather than price but a toppy price and other technical indicators around a projected peak should all come together. Gold peaked over 6 weeks earlier than equities, but the points I used for equities are still the same which gives me a projected peak of April 7, 2010. A slightly different way gives me a date of April 11, but that's a Sunday so I would say April 12 - so somewhere between those dates is my best guess but it could be way too early.

I've not tried forecasting likely peaks for gold before - I don't have the confirming market breadth data like I do with equities or a gold VIX so I wouldn't put too much faith in it. I will however relax and see gold run up in March and then get more cautious as we get to early April.

I had originally thought that gold might peak in early May with equities and then recently heard Mark Leibovit say that he had a cyclical forecast of April 27, 2010 for a peak in gold and he's been doing this a lot lot longer than me and has far more experience!. Watch these videos to see what he says about gold, he could be right:

http://www.youtube.com/watch?v=Qd3kTnu-fbY

http://www.youtube.com/watch?v=LA8R0l2NEX0 (5 minutes in for gold)

Did anyone notice that gold had broken out of it's falling wedge pattern last week?.... the next move up is underway.

RH - there is a dollar thread and it needs repinning as we are already at the beginning of a major trend change in equities/gold/dollar.

Wow, a great Saturday night in at the GEI disco with some wiskey....

Well, it was Friday night and most of us are too old for clubbing these days!

From: http://www.youtube.com/watch?v=btOyj3qM_Dk

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Perhaps... but my "very bullish" comment was referring to the MACD on the weekly chart. On the face of it, the momentum is with the dollar at the moment.

MACD is a momentum oscillator that lags too much, even more so on a weekly chart. The long black candle and red hammer on the daily chart is NOT bullish!. The 'Catflap dollar fractal' says the next move is down and it should last 6 months - IMO this has simply been a multi-week advance for the dollar in a multi-month decline.