Gold On The Path to Higher Highs
Here is what happened (chart on the right): As you can see, there was no need to change anything with regards to the arrows I drew. We saw prices falling as anticipated to exactly 1410, and then the explosive rebound following the outline of the yellow arrow.
This suggests that gold as the forerunner for equities has done its part at the time it was envisaged. This means that equities are poised to strengthen and broaden the rally, which started a fortnight ago.
Consequence or Serendipity?
There are of course a lot of reports, stating exactly the opposite, and commentators quote as many fundamental reasons as they refer to technical analysis, too. All of these views cannot be termed 'wrong', but are probably not providing the in-depth analysis you would expect big investors to have access to.
Since gold has provided the base for the next rally, I am confident that the rest will fall in to place, albeit as volatile and somewhat 'unpredictable' as the last few months have been. That at least is the view of the casual investor. Forecasting at the moment is not a question of inability, but one of too much flux over shorter term periods, i.e. events develop in leaps and bounds. The danger is that by the time I have printed the forecast, parameters and polarities have changed, and you may read it with a different understanding than just a few weeks ago.
As unpredictable as the events in the Arab world may seem, so are the events in capital markets, - and these occur not as a matter of consequence but one of serendipity. Years from now, wistful people might explain the confluence of social upheaval and stock market events as proof of an 'interconnected' collective mind, but I doubt whether the term adequately describes the experience we go through while coping with the immediacy of forceful change. There are different levels of human activity, which often coexist 'independently' of each other, until such time when their values clash. Looking for a causal connection in a futile effort to explain - or more likely - to seek a lever of control over an essentially fluid situation is what we tend to do under such circumstances. But, we probably dare not name the real source out of fear that 'it' will engulf us too.
'Moving on' opens up possibilities - good, bad and indifferent
If this sounds too deep, let me try and give you an example on the extreme periphery: Indigenous people, while living in a 'world of their own', are called so because of their lack of connection with the 'rest of the world' , - 'the world of consumption and commerce'. Once people, for whatever reason, decide to 'move on' from a closed state of the world, they unleash a clash between their existing values and the values that the 'developed world' tends to export. You don't have to be radical to be exposed to this process.
The rest is recorded in history as monumental changes. Exciting times, if you ask me.
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