Why Gold may fake down before going on the next bull runTLDR; Gold may soon (fake) down -20%, before kicking off a longer term bull run.
Ok, let me be clear here...I'm not a financial advisor, and these are my opinions only...so take everything I say here as educational in nature only.
However hear me out before you call me an 'idiot', and let me explain my reasoning behind my statement.
To begin, let's ask the obvious question...
Has Gold Ever Done This Before?
To this, we can answer a definitive yes! Between 2008-2011. In 2008, gold dropped about 20%, then went on a bull run +170% until late 2011.
Were there any signs of a pending correction?
Yes. In 2008, prior to the 20% correction, the chart printed a Double Top pattern. I've labelled this event with a Red Down Arrow.
What Happened After the Crash??
Price tested the support levels created between the periods 2006-2007, which I've highlighted with a support line. After price successfully tested this support, it progressed much higher.
Specifically 170% higher.
Why do I think Gold will drop 20%?
The chart for the current 2022 period recently printed a Double Top pattern, similar to 2008. I've labelled this event with a Red Down Arrow.
More importantly, since 2014, the trading pattern of Gold has been incredibly similar to the 2006-2007 trading pattern that preceded the 2008 crash.
To illustrate this, I've taken the 2006-2011 trading pattern (yellow lines) and overlaid it over the current pattern period to show the four stages: Accumulate, pump, dump, bull run.
Why is the time scale different?
Because the market cap is larger now than in 2008, the moves take longer and the pattern is more drawn out. However the overall trend is the same.
What do we do with this information?
No idea. It is simply here as an observation, and only time will tell if any of this turned out to be accurate.
