tag:blogger.com,1999:blog-5673441815180854503.post6281833121808660892..comments2023-09-10T09:54:59.309+01:00Comments on Screwtape Files: A Beautiful (Inverse) Head and ShouldersLouis Cypherhttp://www.blogger.com/profile/07670126160101669248noreply@blogger.comBlogger4125tag:blogger.com,1999:blog-5673441815180854503.post-45263156071522235022012-03-25T10:35:23.133+01:002012-03-25T10:35:23.133+01:00David: Yes, sorry, I read your first comment a bit...David: Yes, sorry, I read your first comment a bit too quickly there and I then proceeded to argue the case for gold rather than silver!<br /><br />To be honest, it's always very difficult to determine where exactly shoulders begin and end, and where the neckline really is. We can only ever have an approximation, as the counting of candlesticks is more subjective than it should be...<br /><br />That said, you set out a very convincing case for a retest of 1600 in gold. You also make important points about volume: I didn't address this in my article (basically, I didn't want to complicate matters), but it's true that volume has to be right for the formation to be a true IH&S. The Stockcharts website gives a very good explanation of this.<br /><br />I'm surprised that there are observers out there brave enough to say we've definitely hit the bottom, given OpEx next week, and (as you point out) the end-of-quarter portfolio management. (It's also the end of the tax year in the UK). But a bottom or not, I think the case for gold (and maybe silver) going forward from April looks exceptionally bullish short-term.Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5673441815180854503.post-58699095645526176742012-03-24T21:02:42.861+00:002012-03-24T21:02:42.861+00:00I was looking at silver...boy the weekly gold char...I was looking at silver...boy the weekly gold chart looks even better than Silver!<br /><br />I use weekly verses daily as it makes it easier to count :)<br /><br />On Gold I see a retest/consolidation around 1600 or below. On the initial shoulder creation it took 7 weeks to get to the neck. We are at 5 weeks down from the neck on the other side. And the shoulder needs at least 10 days of consolidation on reduced volume from what I see on the chart. <br /><br />..at the point of consolidation I would think volume would dry up...Using GLD the volume has been pretty consistent around 10 million shares traded per day. I would think volume would fall to half that. The reversal would come with heavy volume in excess of 3 times current volume. <br /><br />Things to consider: Investment houses are cleaning up their quarter portfolio's and will not be making large investemtns precious metals until April at the earliest.<br /><br />I would look for the news that brought Gold down from its Feb highs to continue. (EURO? Spain?)<br /><br />Need something that allows the banks to invest in metals at a low price. Thus the shoulder "stalls" as the houses buy from the public while trashing precious metals... Maybe dipping below 1600? The other shoulder actually went all the way to 1530...That would scare the investor!<br /><br />Needs to be blood on the street for a true bottom. Not pissed enough at the metals to call this the bottom.<br /><br />DavidDavid Marklehttps://www.blogger.com/profile/08507418018535609443noreply@blogger.comtag:blogger.com,1999:blog-5673441815180854503.post-66320959108337457972012-03-23T17:30:02.808+00:002012-03-23T17:30:02.808+00:00Hi, David. Thanks for commenting. It looks like my...Hi, David. Thanks for commenting. It looks like my $1625 thesis is playing out - but one never knows. You may be proved right yet, not least with OpEx next week, and the dreaded Monday down day.<br /><br />From a technical point, two weeks (an extra eleven candlesticks from when you commented) sounds like a stretch. I just roughly counted 26 candlesticks on the daily for the left shoulder. The right shoulder already has 31. If this were to become 42, the 'beautiful symmetry' that I described would become rather a Plain Jane.<br /><br />But time, and the market, will reveal all...<br /><br /><i>JdA</i>Anonymousnoreply@blogger.comtag:blogger.com,1999:blog-5673441815180854503.post-27771356295378804202012-03-22T23:55:55.502+00:002012-03-22T23:55:55.502+00:00Two more weeks and the remaining shoulder will be ...Two more weeks and the remaining shoulder will be complete. consolidation in the 29-30 region. Drop below 29 and we head to 26. almost there.David Marklehttps://www.blogger.com/profile/08507418018535609443noreply@blogger.com