Oldtent Archives 2007 - 2008

For the last couple of weeks we have been testing the bottom rail of the bullish rising wedge and the bigger wave 3 of III bottom rail. If this support area holds, then wave iii of 3 should begin to rally in a strong move that will leave no doubt, that we are on our way up to the next price objective somewhere around the 660 to 676 area. The chart below shows the bullish rising wedge and the wave 3 of III uptrend channel plus the 2 measured price objectives at the top of the chart.

I believe we are in the process of making another bullish rising wedge formation for this uptrend channel. It is too early to tell yet but a breakout above the top rail should give us our answer.

The XAU: Very similar to the HUI.

To put this little bullish rising wedge into perspective I will use the monthly chart of the XAU to show you where and why this is such an important area we are in. First, notice the giant H&S base that began in 1994. Heres what blows my mind. We are just leaving this 13+ year base with the breakout 5 months ago. This bullish rising wedge was created on the backtest of that long term neckline. The magnitude of that base should give you long term buy and hold folks something to sink your teeth into. We have many more years left to this bull market if this H&S base is for real. The inter action of the top neckline is text book IMHO. A nice big triangle just below the neckline and another consolidation sitting right on top of it. All we have left to do now is rally away from this spot as all the work looks to be finishing up in regards to the breakout and backtest.

Lets stay on the longer term charts for a minute and take a look at Gold. I have shown this chart many times in the past showing the acceleration of the Gold’s uptrend. Notice how we are trading right about in the middle of that channel. This suggests that we have not seen our top yet. We still have some unfinished business to take care of by reaching our price objective to around the 1130 area, the top of the channel. From that point we will probably get a good correction but for now the corrections should be short and sweet until we get up to our price objective. I put in a black horizontal line at 850 to show how we broke out above that important all time high resistance by creating a small triangle just under 850 and we are now forming some type of consolidation pattern right on top of 850. Breakout and backtest complete?

Silver also has some unfinished business to take care of before it tops out as we are just starting to move up from the breakout and backtest of an 18+ month triangle. Notice the green bullish rising wedge in the last uptrend made by silver back in 2006, it was a sign that silver wanted to go up and in a hurry. You can see how we went vertical when we finally broke out of that wedge.
I believe we are in the process of making another bullish rising wedge or channel formation in our new uptrend channel. It is too early to tell yet, but if we can breakout above the top rail of the wedge we should get our answer with a very strong rally.

Is Platinum leading the way for the other PM’s? If it is, we will need to hold on for dear life cause the ride will be something we haven’t experienced yet in this bull market. It will be interesting to see if Platinum can make it all the way up to the top rail of it’s long term bull market uptrend channel. Also notice the bullish rising wedges that Platinum likes to make similar to silver.
This is how I see things at the moment islander. Hope this puts things into perspective for you.
All the best…Rambus