Gold’s Double Top in June 2010 Ain’t Working So Well

There is an old maxim that double tops and double bottoms are meant to be taken out. While that is not always the case, it is a maxim to be cognizant of. Gold double topped on Monday June 28, 5 days after the Monday June 21 high. Yes, I figured gold would get whacked on Monday June 28 and it did. But trend did not reverse. A 33 day cycle low was due on Tuesday June 29, and gold promptly double bottomed on that low to low cycle at 1227. 1227 also happens to be the Dec 3 high. A change in trend will not be confirmed until gold takes out the 1227 double bottom and crosses below the 2009 yr high on a closing basis. Now, the chart above is very busy. Let’s break down the details. First there is a 33 day low to low cycle. It is active, and the next 33 day cycle low is Monday Aug 16 (day after Aug 13 retail sales). Now, please reference the Dec 3 2009 yr high. Gold topped on the third day of that month, one day before a NFP report. The Dec 3 high terminated the bull trend off the July 8 2009 low on the 106 day (35 x 3 – close to the active 33-34 day cycle). Tuesday July 6 will be 106 days from the Feb 5 2010 yr low. Tuesday July 7 will be the third day of the month, and one day following the July 2 NFP report. Tuesday July 6 will also be 5 days from the high of Monday June 28 and the high of June 28 was five days after the June 21 high. Tuesday July 6 will be 10 days after the June 21 high. The June 21 high came 9 days after the June 8 high. A preliminary three little Indian price target is 1277-1278 for Tuesday July 6. I am not a big fan of this pattern as it is highly unreliable, but we got to start somewhere. I will sharpen my pencil after the NFP report. Stocks to look at: SPDR Gold Trust GLD Market Vectors Gold Miners ETF GDX