We have been following the GLD with the Variant 1 of Basing Points, and in fact added on to our personal position yesterday. We’ve made a lot in gold and been burned a lot and the jungle drums got to beating. We wonder whether a new down cycle is starting. When ever uncertainty enters the picture we look to our systems to aid in decision making. Following Variant 1 we are now in a downwave which has not yet resolved itself with the formation of a Basing Point and trend followers will be gaily giving back profits to watch the establishment of the Basing Point.
We calculated Variant 2 Basing Points based on new highs and the results are shown on the chart. As can be seen Variant 2 is flashing sell signals. Over the long term Variant 1 will be the more profitable, and over the short term it will see greater volatility of equity. There is no doubt in our minds that gold will go to 2000. It may make a detour on the way (down).