We’ll be using the GOLD index ETF GLD (Gold Index) for this forecast.
This sector continues to drop lately and will continue lower into tax selling, the end of the year and into early 2015. Year end strength in the broader markets will cause additional weakness for precious metals. Our research shows this sector continuing to drop below 100 after the first of the year. We don’t expect it to gain any traction until the broader markets top out and experience a 20%+ correction in the second half of 2015. If the broader markets experience a melt up dramatic move higher for the rest of this year and into early 2015, the GLD index will take another leg down to our lowest cycle long term price target level of between 88-92. At 88-92 we would be buyers of the GLD but only hold this limited upside position until the broader markets stop moving down and trough sometime in early 2016.
So in summary we expect precious metals to remain weak until the much anticipated 2015 correction begins.
Unlike so many others on Wall Street who have incorrectly predicted a crash of 20+ percent or more over the last few years, not once have we called for a pull back deeper than the 200 day moving average. For over 5 months now we’ve been telling you our long term cycle shows a much deeper more significant correction isn’t expected until sometime in 2015. Our cycles are based on years of studying the entire price and fundamental chart history of each financial instrument or instruments we discuss. Therefore the broadest understanding much be achieved and fully realized before exploring less significant additional criteria. We believe leaving out any area of financial analysis will increase risk and limit our profit potential.
As a member in the upcoming months we’ll be discussing this sector and many others in more details using our proprietary cycles.
Timothy Stetin , Tradereversal