We may be assassinated by the gold bugs, but an analysis is an analysis — if not a cigar. We ran a rule of 7 analysis on gold and came up with some fanciful targets. (http://www.edwards-magee.com/ggu/ruleofseven.pdf) As you will remember in the use of the rule we take the first wave of the breakaway, here 243.9, multiply the length by the rule factors (here 1.44, 1.75, and 2.33) and subtract the result from the high. We get the three targets noted on the chart: 1081.8, 996.48 and 855.01. No guarantees, only time will tell if it works. If it doesn’t it will be the first thing we’ve tried this year that didn’t (or the three hundredeth). Anyway our money is where our mouth is. We’re short via GLL.
Today short sellers drove up prices by covering their shorts. Probably they did it because the previous low should be a support point and they didn’t wait around to see if it would hold.