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Strategies & Market Trends : Dino's Bar & Grill -- Ignore unavailable to you. Want to Upgrade?

To: Goose94 who wrote (10903)	12/29/2014 10:34:09 AM
From: Goose94	Read Replies (1) \| Respond to of 203898

The Historical View On Gold —Where It's Been, Where It's Going? Markets move in cycles or trends. There are bull cycles, there are bear cycles and there are neutral or sideways trends. Technical traders turn to charts to analyze these cycles and pinpoint price targets and objectives and support and resistance zones. Two of the basic tenets of technical analysis, or chart reading are that: History repeats itself and Markets move in trends Let's take a historical look back at where gold has been? Figure 1 below reveals a monthly chart of nearby Comex gold futures from roughly 1980 through 1994. See the spike higher to $875 per ounce region in early 1980. Double digit inflation in the United States was one factor propelling gold higher at that time. In the early 1980's, the U.S. chairman of the Federal Reserve Paul Volcker cranked up the federal funds rate to a peak at 20% in June 1981 in his efforts to squelch inflation, and from there, the gold trend switched from bull to neutral. From roughly 1982 forward into until the early 2000s, gold traded in a large neutral range between roughly $250-$500 per ounce. Then the gold trend switched again from neutral to bullish. And from 2003 forward, nearby gold climbed from the low $300's per ounce to the all-time high above $1,900 per ounce in September 2011. Then the gold trend switched again from bullish to neutral —sideways trade emerged from late 2011 into the spring of 2013, and then a bear cycle began taking gold down to the June 2013 low. Now, gold could be mired in another large neutral cycle. Markets move in trends and history repeats itself. Gold has a historical tendency to consolidate in large sideways or neutral trends for long periods of time. Could gold be entering a long period of sideways trade? For now, gold buyers have been defending the $1,100 per ounce zone on the downside. That area marks support and the bottom of the range for now. On the upside, the $1,350, $1,400 and $1,428 levels mark out resistance on the monthly chart and could act as neutral range top ceiling. Could gold trend sideways between $1,100 to $1,400 for a couple of years? History shows gold has languished in neutral trends for years. Maybe 2015 will prove to be the year of the range trade in gold. Plan your trade and trade your plan. By Kira Brecht