Tuesday , 19 September 2017


“Three Peaks” Pattern Suggests Gold to Decline 17% into June!

There are a number of different ways to look at what has been happening with the price of gold and silver of late and to anticipate what is in store for them next. One of the most unique ways of assessing past, present and future movement is by taking a look at their “Three Peaks and the Domed House” and “Bump and Run” chart patterns. In deed, the “Three Peaks” pattern suggests that gold has peaked and will now decline by 17% to $1,290 per ozt. in June. Let me explain. Words: 835

So says Nu Yu in an article which Lorimer Wilson, editor of www.munKNEE.com, has reformatted and edited […] below for the sake of clarity and brevity to ensure a fast and easy read. (Please note that this paragraph must be included in any article re-posting to avoid copyright infringement.) Dr. Yu goes on to say:

“Three Peaks and the Domed House” Pattern for Gold is saying…

My version of George Lindsay’s basic model uses a macro or “phase-counting” approach which is different from Lindsay’s classical micro approach (which uses “number-counting” from 1 to 28) in that it divides the “Three Peaks and the Domed House” pattern into five major phases as follows:

  1. Three Peaks
  2. Basement
  3. First Floor
  4. Roof
  5. Plunge

 In the following intermediate-term time frame chart we can see that:

  • the “Three Peaks” phase in gold developed from last November to last December
  • the “Basement” phase (bear trap) formed in late January of this year when gold had a separating decline to reach a low at $1310 per ozt.*
  • the “First Floor” phase of the Domed House was built in March after a rapid advance in the price of gold in February
  • the “Roof” phase (bull trap) has been underway since early April with gold having over-shot my target price of $1540 which was a projection based on a measured move with the same length and duration as the advance move right before the “First Floor” phase.
  • the “Plunge” phase has now begun and gold should experience a 17% decline to $1,290 per oztby the end of June.

*(For an explanation of what “ozt.” means exactly please read this explanation.)

 

Please note that the “Three Peaks and the Domed House” pattern model will end with the “Plunge” phase and it has no future projection either in the upside or downside after the “Plunge” phase.

“Bump and Run Pattern” for Gold is saying…

As mentioned in my article in December here gold was forming, and is continuing to form, a Bump and Run pattern in a long-term timeframe which is shown in the weekly chart below. This pattern typically occurs when excessive speculation drives prices up steeply.  According to Thomas Bulkowski, this pattern consists of three main phases:  

  1. A lead-in phase in which a lead-in trend line connecting the lows has a slope angle of about 30 degrees.  Prices move in an orderly manner and the range of price oscillation defines the lead-in height between the lead-in trend line and the warning line which is parallel to the lead-in trend line.
  2. bump phase where, after prices cross above the warning line, excessive speculation kicks in and the bump phase starts with fast rising prices following a sharp trend line slope with 45 degrees or more until prices reach a bump height with at least twice the lead-in height.  Once the second parallel line gets crossed over, it serves as a sell line. Gold currently is in the bump phase, and its uptrend may continue as long as prices stay above the sell line.
  3. A run phase in which prices break below the sell line often causing a bearish reversal to happen.

 

Looking at the current “bump-and-run” chart for gold above it is evident that gold is still very much a hold with its price well above the sell line of $1,350 per ozt..

“Bump and Run Pattern” for Silver is saying…

When a price breaks below the sell line of a run phase it often causes a very bearish reversal to happen.  Based on the current projection for the price of silver (see chart below) its sell line is near $46.  With silver now trading below that level we could see silver correct down to the $39 level (i.e. -15%) and possibly go down to the $33 level (i.e. -28%) which would correspond to the “Plunge” phase of the gold index.

 

Conclusion

Many precious metals analysts (see here) are of the opinion that gold and silver prices are going to go parabolic in the months and years ahead.  My analyses suggests, however, that at least short term, both gold and silver run the risk of experiencing major corrections along the way.

 

9 comments

  1. Another researcher of the markets estimates that Gold may fall to about $1,300/oz June-July-August.

    Nice to have an second opinion from a totally different perspective.

    Thank you for the interesting information, Dr. Yu. It is appreciated!

  2. Doesn’t your whole definition of a bump and run pattern imply gold running directly to 2680? If the bump is 2x the lead in, that is 1350 – 681 x 2 + 1350 = 2688.

  3. Congrats

    Well, as for SILVER, he nailed it. I just found this article now, and he nailed it (look at that lead in trendline). Maybe the few naysayers barking at a guy trying to ‘yellow flag’ caution things, will head his gold call. Silver may bounce now, and Gold go higher, but I will keep these charts close by during that time. OH, and as of the post, “if this came out MAY 1 instead of 4th, we could have shorted it” -Really? You would have shorted it then? 99% chance nope!

  4. It would have been nice if this article had appeared on May 1 instead of May 4. Then we could have gone short on silver and made some money! Now it is very risky to go short, as it was to go long once the parabolic rise started. Shorting is one place where the old saying “better late than never” does not apply!

  5. Casper da gost

    three peaks LOL
    Maybe its 3 scoops….
    Honestly i almost don’t even want to bother responding to this idiotic article… $1290 gold – because of 3 peaks. Where was this rocket guru back in 2001 or 2002…. I was buying gold shares – trying to tell every one i knew to buy, i posted articles, i had charts published by other writers, I watched many – i mean many of these expert come and go. This correction will be over next week, bottoming now, buy next week as you won’t get a manipulated opportunity like this again for a while. Mark my words folks – i’ll be back on here – good job above HEIDI !

  6. May 4th Update:

    For your information, here is just a brief intra-week update:

    1) Gold
    Gold is still in the “Roof” phase which is a bull trap. According to the “3P & DH” pattern, the drop that so far gold has had is just an appetizer. It has not officially entered the main course of the “Plunge” phase yet.

    2) Silver
    Silver has broken down the Sell Line at $46/oz. It is in a sell-off mode. Today silver prices reached my first price target of $39/oz. If it is not able to hold here around $39/oz above the Warning Line, it could have another severe sharp decline to the next price target of $33/oz to get a support from the Lead-in Trendline.

    Dr. Yu

  7. Same old .. same old … Once gold and silver goes up like we just had … All of these ” analyst ” (??) show how high gold / silver will/can go . But once a corrections starts….bang they all ( no, not all there are s few good analyst out there but it does not incl. this one here ) go the other way … and show now HOW LOW it will/can go . They are all usually wrong on the upside ( overdone ) and the same for the downside … overdone … gold dropping now by 17% to $ 1250’s ? That’s over $ 256 in a few weeks ? Based on what ? This guy ( PHD or not ) will be as wrong as the once who wrote $ gold to $ 1800 in June .
    Why don’t they just say : ” I’m clueless short-term ” .
    And the real suckers in this ? The one that invest and even believe some of those writers. It can cost them a lot listening to the wrong ” analyst “. Do these people have a degree in this field for being called an analyst ? I think not … it’s an opinion … that’s all and I hope not too many take this guy too serious .

    • I agree Heidi, Analysts don’t tell you that they use modeling techniques used for stocks, bonds, etc,. These models don’t even work at that. The manipulation as shown by the software that Goldman was using to secretly get advanced info before the others(France found out and Germany too remember?) going to trade was pathetic, another scheme that shows manipulation.

      When buyers buy all the silver and gold they are buying – BECAUSE of the Reserve currency doing what it is doing, the demand alone (paper is printed weather its derivatives bonds stock or Fiat) all can’t be made in an electronic beep, thus the models are not proper to use for metals that must be found, dug up and brought to market – buyers buy – models fail.

      There just won’t be enough silver for the Banksters to hold to manipulate when all they push is paper – of course they are secretly accumulating, like Soros the trader saying he is selling, when he sells a little then buys alot at lower prices. – Market news manipulation is the same as market manipulation.

      This guy will be wrong – buy and hold. Chinese are doing it Germans are doing it, Indians are doing it, Mexicans are doing it… take a hint

  8. It will take a brave man to short gold the way the dollar is falling.