Addition to Must Read Part 2

By our analysis gold is completing a consolidation pattern after only two up-leg waves of an evolving triple up-leg (plus 2 down) fractal pattern as previously mapped out from November 2005 to May 2006 (shown below).

Fractal patterns play out in increasing magnitude over time and this initial period shown in red below in Figure 1 took gold from $450 to over $700 per ounce. The fractal patterns are seldom exactly the same however the similarity is striking – usually the larger pattern is more complex as it plays out over a longer period of time and a greater scale.

Figure 1.



The evolving fractal pattern below is shown as I captured it very recently with the projected fall marked in black and I now suspect this correction is reaching an end. The simplicity of the initial two up-legs without any significant correction marks them as two plainly obvious moves.

The consolidation pattern after these two latest up-legs also mimics the earlier fractal pattern on a larger scale – note there are two distinct peaks in this latest consolidation just like the previous pattern. I have cropped the beginning of the first pattern at a specific point to illustrate the similarity more closely and included both on the same chart in Figure 2.

Figure 2



Gold Fractals: No 1 (including 5 legs – marked in black ) & New Larger Fractal No 2 – (including 4 waves – 4th still completing). Note similarities in RSI tops also on a larger scale marked by ellipses in black.

Should this pattern play out as expected we will see a much larger up-leg to follow in the final wave. Wave two was $200 high running approximately from $800 to $1000. If the same ratio plays out as the initial pattern we could see a very dramatic up-leg from here beginning shortly.

The probability of this is not calculable however seasonal factors do support this theory. Please do your own research – this is not to be used as part of your investment decision. Read the Disclaimer below – this is not investment advice.

Best regards,
Neil Charnock

www.goldoz.com.au

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Neil Charnock is not a registered investment advisor. He is a private investor who, in addition to his essay publication offerings, has now assembled a highly experienced panel to assist in the presentation of various research information services. The opinions and statements made in the above publication are the result of extensive research and are believed to be accurate and from reliable sources. The contents are his current opinion only, further more conditions may cause these opinions to change without notice. The insights herein published are made solely for international and educational purposes. The contents in this publication are not to be construed as solicitation or recommendation to be used for formulation of investment decisions in any type of market whatsoever. WARNING share market investment or speculation is a high risk activity. Investors enter such activity at their own risk and must conduct their own due diligence to research and verify all aspects of any investment decision, if necessary seeking competent professional assistance.