Saturday, November 29, 2008

GLD - Fibonacci Cycles

One characteristic of Fibonacci series cycles is that the nest allowing one to determine a finer gain structure when the divisions become too large to encompass the period under observation. I set the start for the series near the lows in February of 2005, these are the magenta lines. Starting this far back the Fibonacci number 610 falls in July of 2006 with the next number 987 falling in early January of 2009. The other lines are set to increase the fineness of the divisions and their starting points are marker '0'.

It would be a good sign if gold can manage to sustain a price increase over the next year, this would imply the anticipation of increasing inflation in the future and therefore an end to the current deflationary environment. Offhand the chart looks like GLD will test the 200 day moving average. We will see what happens then.

GLD Daily with Fibonacci Cycles
Click to expand

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