Precious Metals Market TimingBy Ron RosenFebruary 24, 2006
“Time is more important than price; when time is up price will reverse.”
On the road less traveled, take a friend.
"I have been waiting 20 years for this bull market.....it's going to be great help going thru it with your experience and delta charts." "Great report Ron. I am especially impressed with your call that silver might bottom at 9.05, which it did. I waited and entered at 9.20 after I thought the 9.05 low had been established. Otherwise, I am still following your long term advice on the stocks in the HUI but I am sorely tempted to take some profit the end of this month. Any opinion? "Ron, your frequent reports are invaluable and important. I feel like a kid at Christmas opening a present each time i get your email. Each one is well read and much appreciated by all." "Ron, “Thanks for the breadth and depth of your 17.02.06 report it is a great help and most comforting to have you in our corner." "Ron, Kudos on a very good report. Technical analysis-even delta- is meaningless without both an appreciation of underlying fundamentals and, more importantly, a philosophy borne of observation and experience. Your comments illustrate both. And I am delighted to have been able to read them. Hopefully, we will be able to navigate the rough waters together with you. I always appreciate your comments and observations." "Re: Your Feb 27 Report – It is simply fabulous. These charts are so clear & beautiful." "Thanks for a great report Ron." "Ron is the 'Old Man of the Sea'. He knows his weather, knows his currents & knows his tides. He fishes from a small boat & is not greedy with his catch. He also knows when to pull up his line & when to stay ashore. Our fisherman is now sowing his nets. When the old man goes out to fish, lets put our boats back into the water. Let the fisherman's eyes cast their gaze & let his ears & nose sense the wind change. The fisherman knows where the best fish are, yet he uses a small hook & very little bait. Why? He fishes when the catch is hungry & when the catch wants to be caught! Even with a small catch he is happy & occasionally he is pleasantly surprised, one way or another. Most of the times he is not surprised but understands two fish are never the same & two days on & in the ocean are never the same."
Hey, I may be old, but not that old!
Healing TimeSolo piano music for relaxing the body and pleasing the brain...very restful. Brad Kay
Random Fractals and the Stock Market“Here we present a method for rescaling time absorbing the large jumps into the trading time, leaving visible the dependence of price on time.” After considerable thought my only comment about the above statement is, “HUH?”
“What’s in a name? That which we call a rose Sometimes things are made very complicated when they are really very simple. If we want to know what the stock or commodity markets are going to do in the future, we need to find patterns in the markets that repeat. People who participate in the markets repeat their patterns over and over again. W.D. Gann discovered this many years ago. That is why I always start this report with; “Time is more important than price; when time is up price will reverse.” Gann did not have the advantage of using the Delta turning points. They were discovered after he passed away. This means that Gann did not know when time would be up. However, he did know how important time is to understanding market movements. Delta provides us with the perfect order of highs and lows but not price. Using Delta we know approximately when a turn is due. Delta does not give us perfect accuracy. Perfect accuracy is not available. So we are left with the best that is available. That’s pretty good unless we make it too complicated by using language that makes folks think we are one of the intellectual elite. It is also very important not to stick our nose in the canvass. If we are too close to the canvass we can’t see the whole picture. When we look at charts that give us only the daily picture we can’t see the more powerful trends that will carry us all the way to our desired destination. You will never read anything I write that uses the words “random fractals.” We have an opportunity to benefit by one of Gann’s simplest and yet most powerful statements. We are at a point in time that can take 20, 30 or 60 years to arrive. Here we are right in the midst of the potentially most powerful moves that can occur in ones lifetime. That is why I keep repeating this one particular observation of Gann’s. I hope it sinks in and you recognize its importance to our success in the markets at this point in time. “IT IS THE SAME PRINCIPLE"“When a stock (or commodity) advances into new territory or to prices which it has not reached for months or years, it shows that the force or driving power is working in that direction. It is the same principle as any other force that has been restrained and breaks out. Water may be held back by a dam, but if it breaks through the dam, you would know that it would continue downward until it reached another dam, or some obstruction or resistance which would stop it. Therefore, it is very important to watch old levels of stocks. The longer the time that elapses between the breaking into new territory, the greater the move you can expect, because the accumulative energy over a long period naturally will produce a larger movement than if it only accumulated during a short period of time” It has taken twenty six years for gold to build up enough pressure to finally break the first dam. The dam is broken, the energy is released, and the rush is on to destroy the remaining two dams. When that job is accomplished we will be witness to a sight that is rarely seen. This rare event occurs once every two or three generations. It should be enough for any economic historian to write about. I do believe that since the United States was founded we have had several trips down this lane. What’s that about people repeating their patterns? Ah! Sweet mystery of life Well, you get the idea. Let’s not waste this opportunity.
GOLD QUARTERLY CHART(Click on image to enlarge.)
Silver has broken out of its first dam. The first dam is nineteen years old. The rush is on. SILVER QUARTERLY(Click on image to enlarge.)
GOLD DAILY CHART(Click on image to enlarge.)
GOLD WEEKLY CHART(Click on image to enlarge.)
SILVER DAILY CHART(Click on image to enlarge.)
SILVER WEEKLY CHART(Click on image to enlarge.)
I have read a few reports that state it is possible for the HUI to decline to the 200 area. The eight month rise of the HUI is very misleading. Over two years ago the HUI reached a high of 258. Today twenty six months later it closed at 320.64. That means the HUI has gained 62 points in 26 months. That also means it has taken the HUI 26 months to appreciate 24 %. That is not exactly runaway appreciation. It does not appear to be overpriced to me. Of course it can correct and rest for awhile. It has had a good run. As far as I am concerned, “We aint seen nuttin yet.” The real move, I mean the real move, has not yet begun. If the HUI is undergoing an A, B, C correction, it may decline to the 269 area. This would be where the C leg down equals the A leg down. I would not count on this happening, but it is a reasonable probability.
HUI DAILY CHART(Click on image to enlarge.)
HUI WEEKLY CHART(Click on image to enlarge.)
The hypothetical investment account* has remained 100% invested. The trading account** was sold for a profit of $23,555.25. The trading account was held for 7 weeks and produced a 22 % profit. The trading account recently purchased 1500 shares of Hecla mining. On February 22 the trading account put approximately 50 % of its cash back into the market. The securities purchased are from the original list of HUI stocks. The other 50% will be purchased when we have the signal we need for complete reentry. It can be amazing how patterns of the past repeat. In the last great bull market in the precious metals we had Watergate and Nixon’s resignation and the United States was bogged down in Vietnam. The country was spending billions under Pres. Johnson’s guns and butter policy. We were lied to about the war and how it was going. The big deal was the body count. It was total madness. In this bull market in the precious metals the United States is bogged down in Iraq and spending hundreds of billions of dollars. There is no end to the amount of money being spent. Our military, men and women, are returning in coffins, or brutally butchered and missing limbs. The Iraqis are now killing each other over religious differences. Talk about madness. Now this port fiasco has turned just about the entire nation against the President. I doubt he will be impeached, but his fellow Republicans are moving as far away from him as they can. This seems like a relatively similar environment to me. However, with it all it still appears that the HUI and gold and silver may have a bit more correcting to do. I’ll be back on Monday night with another market update. Till then…. Ron R.
*The hypothetical investment account consists of all of the fifteen stocks in the HUI. There are no other mining shares in the account. The number of shares of each stock in the hypothetical investment account has been calculated in a way that helps the accounts performance approximate the performance of the HUI.
** The hypothetical trading account duplicates the investment account with one obvious exception. The account takes trading profits. The entire trading account is traded as though it contains multiple shares of one company.
Next report will be posted on Monday, February 27, 2006. Stay Well, Ron RosenMIGHTYINSPIRIT
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