Gold hit the tops of its 10-year rising channel for the first time in 3 years on 8/22 at (1) above, which happened to reach my longstanding Gold target at the $1,900 level. Each time a certain situation took place, Gold backed off 20%…different this time around? (see $1,900 target/20% decline here).   Since then it has created some wild swings inside of a $200 range. At the same time Gold hit the tops of its channel, Silver happened to reach a high as well at (3).

I chose GLD for the quiz last week, since the Power of the Pattern was suggesting a “Double Top” had been created (See post here)

Due to the situation in Gold, I find the flag/pennant pattern all the more interesting!  Flag/pennant patterns the majority of the time suggest that a very large move will take place on a breakout/breakdown.  Conservative players will want to own a breakout/short a breakdown when it takes place.  Aggressive options/spread players, should have a ton of fun with this situation, because of Silver breaks to the downside here, it should reward them very well!!!

How The Recent Decline In Stocks Looks "Eerily" Like Major Bear Markets Of The Past