Weekly Chart Thoughts Apr. 29, 2004

by Stephan Bogner. April 29, 2004

"Price Action Makes Market Commentary!"

"last read from Bill Murphy at LeMetropoleCafe.com"

"In battles of opinions one shall be prudent the most, when the enemies are approaching and [want to] determineus."[1]

"In the long-term, nothing and nobody is stronger than the market"[2]

The above chart shows gold trying to take the middle (blue) trendline as support.

One can look at the chart this way as well. Notice how the price was sloping from October 1999 until April 2001 (green line). This is exactly the same slope in reverse, which the gold market is using since the beginning of the upswing.

The above chart is exactly the same as the one before. The blue line represents when you should have held your positions. Every time gold was hitting the upper green line, it corrected sharply down towards the lowest green trendline. Whenever the lower line was touched, one should have bought – no matter what the price was doing later on.

Every time gold was forced to correct to the downside (red lines), the correction found support at crucial price marks: $250, $275, $300. $325, $390 now, and later $430.

The above lines are all trend lines. Take a look at the light gray lines, which are connecting the high points with the low points. And now take a look at the gray lines in the next chart.

The first red triangle (October 1999 – April 2001) was deciding whether gold was to start a bull market. This period was crucial because it was shaking off and cleaning out major bears and building up a bottom at $250.

The 3 triangles from April 2001 on have something in common: their upper legs all go back to the price marked in October 1999 (green circle). The lower legs all go back to the yellow leg. (I did not draw them fully back to the yellow circle, because there would be too many confusing lines – but go ahead and check for yourself.)

So, triangles are nothing else than trend lines. And trend lines are nothing else than resistance and support.

The Euro-Index finally pulled back all the way to its apex and is now positioned to be ready for a thrust to the upside (or downside).

"Itsnot the size of the wave – it’s the motion of the ocean!" – and the breaks are getting bigger!

[1] Translated from German into English by SB: Ludwig Börne: "Das Staatspapier des Herzens – Fragmente und Aphorismen" (BundVerlag, Köln, 1988), S. 15.

[2]Translated from German into English by SB: Prof. Dr. H. J. Bocker: "Gold Dossier" (Polar Film & Medien, Gescher, 2000, PolarFilm.de).

Feel free to send me your comments and how you feel about all the triangles.

HAPPY TRADING, GO GOLD & GATA!

Contact Information

Stephan Bogner | E-mail