Wednesday, February 14, 2007

Fractal Charting

14 February 2007

I wish to commend to you to the work of a very brilliant (amateur) analyst who is studying precious metal investments using a method referred to as fractal charting. He goes by the name of Goldrunner, and in my opinion his work is groundbreaking.

I have done a web search, and others are using this method. However, due to my limited experience, Goldrunner is the only person I know to be applying the method of fractal charting In the area of precious metal and currency investments.

Goldrunner’s most recently published article draws a fascinating parallel between chart patterns in gold in the 1970’s and today. If Goldrunner is right, then the precious metals markets could remain strong from now through mid-2008 (that would be an unusually long period of strength).

As do I, Goldrunner holds that the gold bull market is advancing in waves (or stages). He is thus suggesting that the new uptrend being formed might persist for about as long as did the one from 2001 through late 2005. You may recall that in late 2005, gold began to surge into the uptrend which we are presently experiencing (peaking in May 2006, but still going strong).

As do all freely-traded items, the price of gold tends to move in channels, and within the channel, the movement can be quit violent. But if Goldrunner is correct, the next year might prove to be a period of smoother than usual sailing.

Well, I was trained by the boy scouts, so I'm battening down the hatches anyway. But if the sailing should prove clear over the next year, it would make the trip all that much more enjoyable!

For those of you interested in exploring Goldrunner's work in more depth, here is an index to his work: Gold-Eagle.com Goldrunner Index.

Goldrunner references the work of Dan Norcini (a colleague of Jim Sinclair and regular contributor to JSMineSet), and here is the long-term gold chart to which he is referring.



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