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Gold & Silver Pullback as Forecasted Now for the Big Opportunity September 25th, 2011 at 10:51 pm Chris Vermeulen – www.TheGoldAndOilGuy.com A few weeks ago I wrote about how gold was starting to top and that everyone should expect a very sharp drop to the low $1600 area. How I came to this conclusion was though the use of inter-market analysis combining price patterns, gold futures volume, the dollar index and market sentiment. This allowed me to understand what the majority of other traders/investors were thinking and feeling. By knowing each of these market variables and crowd behavior I can accurately see into the future a few days with a high probability of success and most importantly with low downside risk. You can view part-1 on how I properly forecasted that gold would fall sharply in August here: http://www.thegoldandoilguy.com/articles/dollar%E2%80%99s-on-the-verge-of-a-relief-rally-look-out/ At the time when I forecasted gold to reach the low $1600 area gold was still building the top pattern so I could not say how long a recovering would likely take nor did I know exactly when to re-enter a long position. But now that we have seen how gold arrived at my target price I can form a new forecast. Spot Gold Price Forecast – Daily Chart: The gold chart below clearly shows rising volatility along with my topping pattern of three surges to new highs. It was August 31st when I warned subscribers and my followers that gold was about to top and that everyone should be taking profits or at least tightening their stops to lock in gains. Only three days later gold topped and it has not stopped falling since. On August 8th gold had a large opening gap to the upside. This means the price opened the next day much higher from where it closed the previous session. It’s important to note that gaps especially for gold almost always get filled within a couple months. Seeing this gave me a solid reason to think that gold should pullback to this level during the next big correction in price. Also during the month of August gold had to pullbacks only to continue to make the third and final high. This told me that when the top is put in place was a very high probability that we see the price of gold drop below both of Augusts’ lows and that would trigger stop orders sending the market sharply lower. Now that we are seeing the stops being flushed out of the market it means the majority of speculative traders have exited their positions. So speculative traders who caused the large surge in gold to take place are now out. Once all the speculative traders have exited which should take place in the coming weeks or two we can expect some type of bounce or rally. I will keep a close eye on the intraday charts for subscribers as we near a potentially major trade setup. Where are we in this gold bull market? Well I feel gold is more fairly priced between $1632- $1660 area. Currently gold is trading at $1660 but if things play out like I have seen in the past we just may get one more dip this week to the $1600 area before gold truly puts in a bottom. Because gold went from a new high all the way down to Friday’s panic selling washout instead of a controlled ABC correction I feel a bottom will be more of a one day event. This type of bottom carries more risk and is more difficult to time and trade. So scaling in with a small position at this level and adding on a drop to $1630 then $1600 could prove to be the safest way into a gold position. Forward looking I see gold bottoming over the next week or two then a nice relief rally to the $1775 area. Depending on how gold arrives there will alter my next gold forecast so let’s wait and see how things unfold. Spot Silver Price Forecast – Weekly Chart: Silver I call the Un-Safe haven because to me it’s not a safe haven in the way everyone’s believes it be. I hear and see everyone including friends and family selling all their stocks and putting their money into silver. To me buying large amounts of silver with your retirement money is just ridiculous. I m sure my statement here will trigger an inbox of silver-perma-bulls (silver bugs) to send me hate mail but that’s fine as my assistant filters my emails so I don’t have to keep being reminded how rude some humans can be over an simple opinion… Investments that can lose 25% in value within 2 days or lose 40% of it’s value in 5 months should not be traded nor invested in with large portions of anyone’s life savings, especially if you are over the age of 50 and have not proven to be a constantly profitable trader. No one can stomach losing that much of their nest egg. That being said I do feel silver is in a similar situation as gold. I do feel a bottom is near. Silver has formed an ABC correction and the price and volume patterns seem to be in line with a typical bottoming pattern. After Friday’s massive selloff I feel silver may slide a little lower yet before putting in a bottom. One thing to keep in mind with silver is that it is very thinly traded; there are a lot of speculative traders involved which push and pull the price to extreme levels on a regular basis. So if the broad stock market continues to sell off sharply then I expect silver to follow suit. Pre-Week Precious Metals Trend Analysis Trading Conclusion: The price action we have seen this year for both gold and silver indicate were are just warming up for something really big to happen. It could be a massive parabolic rally to ridiculous new highs in 2012 or it could be a large unwinding of the safe havens as countries sort out their issues and the big money starts moving out of metals and into currencies and stocks

silver

Looking at Silver, the chart is significantly weaker as it has breached the 32-day moving average and the 61.8% Fibonacci Retracement level as well. The MACD is also showing a bearish divergence. It would be critical for Silver to hold the support at about $16 (65-day moving average) for it to be considered a healthy correction, or else too much momentum will be lost. This level has to be tested sufficiently, and for now we reserve judgment on Silver. But clearly, Gold is the precious metal of choice of the two based on its shallower correction. www.MarketTimingSignals.com

Gold, Silver, Oil, Natural Gas ETF TradingCommodities & Stocks Ready to Bounce or Rally? Commodities and stocks almost look ready for a rally or at least a relief bounce. The market is down over 5% and the normal pullback this year has been 4%. Using technical analysis and inter-market analysis we can see that the market is reaching extreme lows and this usually means we are only a couple days away from a rally. I work with several market technicians as we all analyze the market a different way and share our work with each other to gain maximum insight on the broad market moves. We analyze momentum cycles, magnetic cycles, volatility levels, support & resistance levels, volume analysis and inter-market analysis. Each of us has found a formula which works for our individual style of trading. And by combining our work we have found that we can collectively produce some very exciting trading signals for the broad market. We focus on leveraged index funds in order to take advantage of our insights. While nothing in trading is ever perfect, the analysis for timing the broad market is very exciting.

Here are some quick charts on where the market is trading.

US Dollar – Daily Dollar Price Chart This chart is a no brainer. The trend is down and trading at resistance. If the US dollar reverses back down we will see stocks and commodities move higher.

VIX – Daily Volatility Index

Again, overall the trend is down and trading at resistance. As the saying goes “When the VIX is high its time to buy”. Just to be clear, the VIX is low compared to the previous highs set back in 2008 which was around the 80 level. But, if we want to keep things simple for the current trend then the VIX is high for our current market condition. The VIX moves in the opposite direction of the equities market.

DIA – Dow Jones Industrial Average ETF Fund

Here is the Dow Jones index fund and it clearly shows that when investors are selling out of their positions and getting scared of a market collapse, volume rockets higher. When we see the price pullback to possible support levels and volume increases that is a time when we should be looking to scale into a long position for a bounce, such as now. XLE – Energy Sector ETFYou can see that the energy sector is very close to a support level and volume is high. With the US dollar about to reverse back down it will help boost this sector as it is tied in with commodity prices which rise with a falling dollar. I expect we will see a price gap lower and fill this area before moving higher.

GLD – Gold ETF Fund & Silver

This chart has not changed much from last weeks report. We are getting the drop as expected this week. We could see the gap fill from early October before gold stabilizes. Silver is in the same situation. Gold and silver move in tandem so we are waiting for a bottom before looking for a low risk entry point. Gold and Silver Trading Tends

Commodity & Stocks Trading Conclusion:

To keep things short and to the point, I am seeing momentum cycle lows as of today, magnetic wave lows today, and most commodities and indexes trading at support. These observations, coupled with the US dollar at a possible resistance level and market volatility spiking to an extreme high, lead me think a bounce is in the cards. The market has had an amazing rally so far this year and I feel that we will have a solid year end rally going into Christmas. That being said, the recent sharp correction could form an ABC retrace pattern which means we get a bounce in the next week or so, then one more multi day sell off which will scare even more bulls out of the market. I am going to be scaling out of this oversold play quickly to lock in some gains while allowing a smaller position to ride for larger gains

Web Exclusive: Axis IT&T to acquire Cades Digitech

Raghuvir Badrinath / Bangalore September 04, 2009, 10:58 IST Axis IT&T, a public held engineering software services firm owned by Rajya Sabha MP Rajeev Chandrasekhar, is understood to have signed an agreement to acquire Bangalore-based Cades Digitech, a niche product design and engineering software services firm. Industry sources close to Axis detail that the transaction is valued at close to Rs 75 crore. Axis is understood to be acquiring a 51 per cent control initially and will subsequently increase its stake to 100 per cent based on certain milestones. Cades provides product design, Engineering and R&D services to aerospace, defense, automotive, transportation & energy sectors and has Infosys co-founder N S Raghavan's private equity fund as one of its major investors. Cades has more than 60 customers including the global clients like EADS / Airbus, Boeing, Fokker, Nissan, Volvo and Mercedes Benz. The Cades team has Product Design & Development expertise that includes Design, Analysis, Simulation, Multi-body Dynamics, Virtual Prototyping & Testing, Manufacturing Engineering, Product Data Management and Technical Documentation. Industry estimates indicate that Cades has a topline close to Rs 50 crore and has projected to grow by around 20 per cent during 2009-10. AXIS-IT&T is an engineering design service provider, with over twenty years experience in delivering Product Design, 3D Modelling, Detailing and Assembly, Finite Element Analysis, Reverse Engineering and Conversion of legacy drawings. With the move to acquire Cades, Axis gets niche expertise in aviation product design lifecycle Axis IT&T is part of Rajeev Chandrasekhar's Jupiter Aviation which is working on building the entire value chain for aviation industry. Right from designing software for the aviation industry, Jupiter Aviation is putting through the links for aircraft maintenance, repair and overhaul, training and also building a aviation SEZ and an airport at Hassan district of Karnataka.