Charting Greatness

    Above is the 2011 chart For Gold. Below are 13 of the most important observations to draw from it.

1. Gold was up again, for the 11th year in a row. Still the masses cannot recognize a trend for what it is. (How many times you gotta be told?)

2. Notice the advances of (April, July- Aug, and late Oct) all came on the heels of a month or more of sideways movement in price.  Sideways breeds apathy for both bulls & bears. This keeps the proverbial bull traveling light.

3. Gold Bulls had their greed ignited with a six week 28% mid year rally - only to spend the last four months of the year getting kicked in the junk with two big selloffs in September & late Nov-early Dec. 

4. Gold Bears have lost for the eleventh year in a row, yet they end the year feeling a little giddy after those two big selloffs. 

5. In essence, Gold was up for the year - yet bulls feel sick & bears giddy. Common sense would suggest thats not possible - yet here we are. 

6. The last 5 months of the year, gold has posted a series of lower-highs & lower lows. This has the effect of getting Technical traders (those who follow charts) on the short side of the market.

7. With Gold falling the last 5 months of the year and breaking below the 200 day moving average, Momentum traders are also piling on the short side of the market. 

8. As we all know, markets move in a manner which hurt the most people. With Bulls currently timid, bears giddy, technical & momentum traders on the short side - a massive upleg must be near. 

9. Before the upleg comes though, there probably needs to be some more sideways action first - for apathy sake.

10. Gold closed the year 19% off its all time high. For those looking to ride this Bull - that is about as cheap as it gets - historically. 

11. This is the 3rd consecutive year Gold has posted an important bottom between late June & late July. Expect this pattern to continue.

12. If history is any indication, $1900 will not be breached the next trip up - it will probably have to knock on that door at least three times. 

13. The five month selloff to end the year is testing the convictions of bulls as we speak. The more experienced among us, have seen this movie before. It ends with higher prices!!!!