Oldtent Archives 2007 - 2008

Below is a weekly chart of the HUI, for the entire bull market, to date. You can see all the pretty little consolidation patterns stacked one on top of each other in a beautiful bull market uptrend channel. This chart is subtly different from most TA folks, in that I am using the last bear market downtrend channel, top and bottom, to get the width of this HUI bull market uptrend channel. I think when this big wave III up is finished, the tops of wave 1, 3 and 5 of I and wave 1 of III will look like smaller intermediate term tops instead of the long term, big tops that a lot of folks are using to find the uptrend channel. The first chart below is just a clean version of what the rest of this wave III may look like to some degree. Please don’t use this chart as an absolute guide as I know there will be some changes made before it matures out. I am using it to look for time and price objectives that may give me a perspective on where we are in this bull leg. For instance, if we are close to 720 in May of 2008 then I will know we are getting close to the end of this wave 3 of III that we are currently in.

The breakout from the diamond or triangle consolidation pattern is putting us on course to our next price objective at 720. Notice the angle of our current wave 3 of III between 285 and 720, it is moving up the prescribed angle, not to far above or to far below our angle of ascent, just right.
The next chart has our 6 month time cycles that makes this chart come to life. I think they are still alive and carry alot of weight in this analysis. First, we are currently in one of our 6 month time cycles, November, that says we should be topping this month, black arrows, but when we are in a breakout move they tend to invert, meaning instead of making a top in here we just add 1 more 6 month time cycle to get our next high. That would put us out to May of 2008 for this current wave 3 high. This has happened several times already in this bull market and each inverted top finished out, exactly 6 months later.
Notice the odd numbered tops in red and how each top ended with a 6 month time cycle. Pretty amazing.

The 720 area puts us in a time and price objective to start looking for a wave 4 correction. The kind of wave 4 correction we get will give us some clues as to what we might expect going forward at that point in time. This is where the speculation starts. A triangle or rectangle starting from the 720 top, lasting 6 months to a year, would finish out to low in price, thereby making it to long for a wave 5. Now a running a correction on the other hand, with its rising bottoms and tops, could work out perfectly, giving us a higher level to launch our 5th and final wave up from.
As you can see by looking at the top rail of the uptrend channel this wave 3 of III projects much higher than anyone is currently suggesting. 2000 or so by November 2009 is what this uptrend channel is projecting to. No that is not a misprint. I really think this wave III will transverse from the bottom rail to the top rail before it is all said and done. The million dollar question is which top rail will be the real top rail to this bull market uptrend channel, the top blue rail or the green lower rail. The current opinion is the wave 5 of I top at 258, green rail, paralleled to the bottom blue major uptrend rail is the one to watch for. I will be watching the 258 parallel uptrend channel that most folks are watching but I will have my sights set on a much higher price objective, a little farther out in time, Nov. 2009 when the dollar should be putting in its wave III bottom.

Trying to invision the future in any meaningful way is always hard and can go up in smoke at any given moment. You have to have some kind of vision of what you are trying to see so you can compare it to reality, then you can really see how well you can see the future.
Peace…Rambus