When Will the Gold Price Correction End? Can Silver Give us a Clue?
In my previous post on February 4th. I had a chart on gold that showed the possibility of a head n shoulder pattern formation in the making. It is a pattern that has always ended in a failed pattern with the result of the GOLD PRICE surging upwards in a shake out pattern [that's GOLD].
While the pattern is in development the bears come out of the woodwork and point to a drastic failure at the neckline and paint the image for a massive decline in the Gold Price. Then in their next newsletter they show how the gold price of course roared out of that pattern in a bullish fashion after the pattern failed, THATS a BULL MARKET. I expect nothing different this time.
What this means is , I expect this Head n Shoulder to fail at some point, with some scary moments for gold longs that watch every tick in the gold price.
Before we go further I want to recap an important message from Jim Sinclair (click for Jim's resume) that MARGIN IS A NO NO with anything GOLD with less than 25 years experience in trading.
Now with that behind us, I am looking for a tip to when the ultimate failure happens with respect to the Head n Shoulder pattern , for this I am looking to the silver price this time. I am looking for a reversal pattern in Silver in the coming weeks.
I know Silver is not considered money, I know Silver is an industrial metal, I know there is global slowdown talk, I know the GOLD SILVER ratio is very high (53 today) in historical terms.
With all that Said, I expect the silver price to consolidate here, and SILVER doesn't do it gently. Looking at the lack of follow through with the Silver shares, I expect that an intermediate top in silver today is in place, therefore were do we correct to.
The silver price typically retraces hard because of the small market cap it has, so unless you are from Mars you know the volatility with this one is the wildest. I could be wrong and Silver could lunge higher here to $19 or higher, but I don't count on it at this stage. ( I just don't) with the Gold Price down hard today and Platinum with a reversal in too, not to mention Palladium :(
So now that I have painted the picture for a hard correction for the silver price, where does it end and what to look for. I am going to look for two signals on the charts in the next three weeks, on a weekly closing chart for silver, I am going look for a long wick and a clear reversal pattern with silver. Second I am going to look for an RSI around the 40 mark which is a typical momentum indicator to touch at the end of a correction in a bull market.
While the pattern is in development the bears come out of the woodwork and point to a drastic failure at the neckline and paint the image for a massive decline in the Gold Price. Then in their next newsletter they show how the gold price of course roared out of that pattern in a bullish fashion after the pattern failed, THATS a BULL MARKET. I expect nothing different this time.
What this means is , I expect this Head n Shoulder to fail at some point, with some scary moments for gold longs that watch every tick in the gold price.
Before we go further I want to recap an important message from Jim Sinclair (click for Jim's resume) that MARGIN IS A NO NO with anything GOLD with less than 25 years experience in trading.
Now with that behind us, I am looking for a tip to when the ultimate failure happens with respect to the Head n Shoulder pattern , for this I am looking to the silver price this time. I am looking for a reversal pattern in Silver in the coming weeks.
I know Silver is not considered money, I know Silver is an industrial metal, I know there is global slowdown talk, I know the GOLD SILVER ratio is very high (53 today) in historical terms.
With all that Said, I expect the silver price to consolidate here, and SILVER doesn't do it gently. Looking at the lack of follow through with the Silver shares, I expect that an intermediate top in silver today is in place, therefore were do we correct to.
The silver price typically retraces hard because of the small market cap it has, so unless you are from Mars you know the volatility with this one is the wildest. I could be wrong and Silver could lunge higher here to $19 or higher, but I don't count on it at this stage. ( I just don't) with the Gold Price down hard today and Platinum with a reversal in too, not to mention Palladium :(
So now that I have painted the picture for a hard correction for the silver price, where does it end and what to look for. I am going to look for two signals on the charts in the next three weeks, on a weekly closing chart for silver, I am going look for a long wick and a clear reversal pattern with silver. Second I am going to look for an RSI around the 40 mark which is a typical momentum indicator to touch at the end of a correction in a bull market.
posted by goldprice at 9:49 PM
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