"Great Set-Up On Deck"

Symmetry is beautiful and best shows up on a chart. Naturally, situations can change in markets and technical analysis is a bit of mathematics, art and luck all wound up in a knot together. What we see is a potential inverse head and shoulder (a number of technicians are now talking about it) and symmetry implies that the right side development should mirror that of the left side. Currently, a right shoulder may be under construction.

The current weekly chart of gold looks quite interesting even beyond the implied inverse head and shoulder formation. We've constructed a buy model and, although not perfect as 2008 proved, it does seem to work quite effectively at determining upward turns in the price of gold for however brief or long that may be.

We'll share it with you.

In order for the chart to remain somewhat legible, we've focused on the past four years of gold's current nine year Bull Market. What we're looking for next is a combination of events that should take place simultaneously.

• Price needs to break thru resistance and we would like to see it take out $919.
• The stochastic black line needs to cross up over the grey line. It would be preferable to see that occur at 20 or even below. Back in 2006 a significant launch in price occurred with a stochastic crossover above 25 during June but the large leg up didn't really start until a stochastic 20 crossover took place during October.
• Price likes to bounce off the lower Bollinger band as well as slice down thru it intraweek to scare some participants off the bus.

So, as you can see, it shouldn't be too long before gold is at an optimal crossroads and you might want to be prepared for a third launch thru the $1000 ceiling. This next launch may just make a floor out of $1000. We'll see.