My secret is that I have so many charts, with so many lines everywhere, that when I scroll through them (usually during a pedicure), one of them is always liable to be at an important point. So, e.g., I saw a chart in the comments of Kid Dynamite's post on gold manipulation today, and knew I had my own version of that chart somewhere. (There are very few charts I don't have, although I've finally given up on following the 3-month heliocentric cycle of Mercury. I now look only at the 5- and 10- minute versions).
And lo!! it's at an important point.
Based on where the correlation between gold and the TIPS (~real interest rates) is right now, usually something dramatic happens.
I'm watching now to see if the correlation drops to the grey zone ... that's when historically we either have a local top/bottom. If the price of gold is falling when the correlation w/ real interest rates crosses the grey threshold, that means bottom, and vice versa.(Naturally, since gold and real interest rates should move together).
**UPDATE: In response to commenter Daniel's confused query let me add this explanation:
Basically I have the same correlation indicator repeated twice at the bottom, one has a green horizontal threshold, one has a gray horizontal threshold a little bit lower. Looks like more than 3/4 of the time, if the correlation drops below the green horizontal line, it goes all the way down to the grey. So the green vertical lines mark where the green horizontal line is crossed, and the grey vertical lines mark the entire span where the correlation stays below the grey horizontal line.
Every time correlation hits the grey threshold, it's marked an important top/bottom.
I actually added the green line to the chart today to mark where the correlation currently is, then realized it has some significance in itself, e.g. for a long straddle option play.
From GM's VAULT
Free hat to anyone who sees what's going on here ...