In my April 15, 2013 commentary I concluded by writing “Bottom Line: It doesn’t look like Friday’s sell-off will be the low everyone is looking for. It doesn’t look as if it could be profitable to even start looking for that low until early May. Gold bugs take heart; April showers bring May flowers!”
Since that commentary gold rallied over 100 points into early May only to give it all up again and find itself, as of last Friday, back at the same level as when I wrote the April commentary.
Middle Section Counts
In the April commentary I also identified a descending middle section I was using to help time the low in gold (in addition to the cycle analysis I showed). The concept of a descending middle section was developed by George Lindsay and is essentially a decline (B to H) in a long bull market interrupted by two small rallies (E and G) at about the same level. Point E, the first of the two rallies, is called the “measuring point”. In the December 2009 middle section, point E falls on December 11 (mistakenly identified as December 17 in the April commentary).
Point E counts 634 calendar days to the intra-day high of the basic cycle on 9/6/11. Counting an equidistance forward in time targets a low on Saturday, June 2 – leading me to expect a tradable low in gold on either the previous Friday or following Monday
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