Here is a picture. No point in spending ages turning it into words:

20160217 Knebworth gold action-reaction actionreaction lines arlines median all1

My key median line starts at the $1309 low, early 2011, it goes through point of recognition gap in the high-1400s April 2013 just right, so it delineates the transitions into the bubble phase and out of the bubble phase. It also traces back to last high of the ‘sane’ bull market earlier in 2010. Draw pitchfork using these and also the swing high and low $1800 and $1180.  It’s a gentle uptrending fork.

I never liked the quadruple rolling top in Nov 2010 – it set off alarm signals that my goldbugness tried to ignore but couldn’t quite. According to this chart, it was the first excursion into bubble territory – the first toe in the water or foot in the door.

IN late 2013 I tried this but didn’t find the slope because I didn’t see the pitchfork. At that time it seemed to agree with Goldman’s target of $1050 by end of 2014 which didn’t quite work out. The shallow slope of the fork and the Ar lines allows for big errors in timing but not in price though!

Now, I’m simply looking at all the bubble highs and finding symmetry with the post-bubble lows, I am not looking for exact symmetry here but just testing the water.

The current action is on a parallel pitchfork that not only mimics the big one but is very close to half as wide. That would make it a typical Andrews pitchfork style external parallel.

It looks pretty good to me.

OK, where are we now? Well, still in a bear market? Point P has symmetry with Point Q on this chart. The chart has rotational symmetry about the middle cross of the pitchfork. Point P and Point Q are both areas of steep slope – big rate of change of price.

Wearing a goldbug hat, this says the bear market is over and the interim target is $1750+ as the median line is revisited:

20160217 Knebworth gold action-reaction actionreaction lines arlines median pitchforks PQ 1750

20160217-Kneb-gold-action-reaction-actionreaction-lines-arlines-median-pitchforks-PQ-1750

First, we have actually to get back in to the blue pitchfork of course! That would take about $1400 and that is remarkably the upper target of the smaller orange fork.

A bearish scenario might be to touch the bottom of the blue fork at $1400, get repelled and fall the whole width of the blue fork down to about $800 in a channel doubling event.