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May 31st is First Notice Day for Gold.
Frank Taucher writes about "Slammers" and "Launches" in his"Supertrader Almanac".
*Basically a FND Slammer occurs when price moves towards first notice date. In most markets, since long positions are subject to a delivery notice issued at the option of the short position, longs will tend to liquidate their positions and create artificial downward "pressure" on the market just prior to first notice day. When this pressure is relieved, a post-first notice day bounce often occurs known as FND Launching.*
When FND coincides (aproximately) with the end of a down seasonal, we have a Seasonal Slammer and when it coincides with the end of a Down cycle we have Cycle Slammer.
a cmbination of all three produces a "Black Hole" followed by a "Blast Off"
(the expressions are used in the Almanac)
Today is May 31st. First notice day for Gold and the last 6 trading days very much looks like a Slammer.
However look at the goldseason.gif which displays continious gold from 1974. the blue line is the seasonal pattern since the start. Watch how the bottom coincided with the 2nd bottom of price in the double bottom pattern. The price correction fits in the middle of the doubble bottom season correction and we are now in line for the almost straight line up for 4 months (seasonallly).
It looks like a Seasonal Launch.
Do we have any goldcycle knowledge out there in RT space? Do we have an important cycle low of some kind atthis time? Can we count on a "Blast off"
Well, if everything works according to EW schedule we could at least be in for a healthy wave 5, according to my interpretation(EWgold.gif).
Yesterdays move down (W4) ended just 40 cents below the high of W1 (just like W4 of 1 ended 50 cents below the W1 of 1 high). This level, furthermore coincides with the all important 78.6% level(263.9) which marks the level where we decide if the bull market is ON or OFF
This level in price is extremly importand also since 266,5 is where we had an important bottom in GCM on Aug 25 1999.
We are also, for the 2nd time (see"D"), testing the break out, now on "Bullmarket scale", of the trendline from the end of June 2000.
Lots of support here in other words. A break of this level would be VERY bad for us Gold Bulls.
More...
stig
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