The Gold market bottomed on Dec 28, 2011 at a low of 1523.9 (Feb '12 ctrct), closed for a daily/weekly/monthly/yearly close of 1540.9. I believe that was the end of the large A-B-C correction. 2010's close was 1421.4 (Feb '10 ctrct) on 12/31/2011 for a yearly gain of +120pts.When the run started on July 1, 2011 from a low of 1480 and reached about 1680, it started to go hyperbolic straight up in a moon shot to the 1900s. Between mid-august to september 2011, you could have easily gotten $1,800/oz. The guys who have been holding gold a long time and/or newbies that caught the sudden rise were salivating at the immense profits.For those who made quick profits and did not exit, they got the SLAM DUNK on 9/22/11 from 1787 to 1543 in 3 days, thats -240 pts in 3 slamo-jamo-whammo-days! The futures players would not have been able to withstand that kind of volatility in such a short time span. The Johnny come latelys to that party got eaten alive. That was Wave A down.Wave B up correction, the false rally, occurred from late Sep to early Nov, topping out a week after they dismantled MFGlobal at around 1800. This was WAVE B up.Wave C down seems to have completed on Dec 28th with a RSI low of 27.28, a number I had never seen so low. The previous low was at 28.07 on 12/15 a week earlier. I say that 12/28 low was ROCK BOTTOM. Kinda makes sense. All serious gold buyers (who wanted the physical) would have bought in the breakout at 1680 upto the 1780s-1900s. These are the institutional/sovereign players who were taking delivery regardless of price. For COMEX to be able to deliver in Dec 2011, they needed to take gold down as far as they could for Dec delivery to minimize their cost. And thats what they did, IF they sold in the 1800-1900s, buying back for Dec delivery would allow them to cover (meaning making delivery) at least at a cheaper price.The second thing is by whacking MF Global (#1 in metals, #2 in oil), you took out a large number of accounts that were taking delivery, the boys who wanted it with deep pockets still got their gold. For everybody else, it was, fill out this 21-page form, get in line, we'll get to ya, and by the way youre only getting 72% of your money. Jon "the Don" Corzine made a bad bet with your money in Vegas, and LOST your other 28%. Says there are many other "Dons" in other firms who could make similar ALL IN bets with customer segregated money. That term "customer segregated" means nothing anymore after MF Global. Same as saving money in a bank, and that bank bet your money on garbage mortgages or sovereign bonds from the PIIGS, lost it all, and they say sorry. Fill out the form, get in line, and we'll get to ya.Going back, I posted sometime ago that they were going to trade in the upper part of the range between 1740 to 1900 first, then they were going to trade the lower part of that range (1550s-1740s). Wave B up filled that range, and on Wave C down completed trading of the whole range between 1550-1900s for the last 6 months.Now Im getting signals gold is on the cusp of a major new run in gold that should take it to like $4500. For those who dont know Alf Field, go take a look at his commentary on 321 gold. He's calling a bottom with a high probability that gold is in the next cycle UP. He calls this next wave UP Intermediate Wave 3 of MAJOR WAVE 3. This is the strongest of all rallies in the EW cycle, and as he mentions, a "black" swan event can occur here.The possible black swans today are: (1) Euro defaults, takes out European banks, which dominos right back to US banks and investment banking firms; (2) Any middle east tension/war with Iran/Syria/Israel/etc with further involvement with Russia and China, blockage of the Hormuz strait, should see oil spike to the moon also; (3) Trillions of derivatives in interest rate contracts as mentioned by Alf Field, this collapse could take out European and US banks.Ok, here are the facts that make the BULL side. Wave A and Wave C are almost equal size in magnitude, which says this correction is over in EW terms. The RSI made a really LOW low on 12/28/11, this usually indicates a bottom. The bollinger bands just "pinched" and that means a major move (UP or Down) is to occur. After breaking down below the 200-day moving avg on 12/15, gold rallied above it for two days (1/11-1/12), and is right on it as of todays close of 1630.8 (Feb '12 contract).The GUARANTEED PLAY===============Here is a PLAY (as Joe Namath said in SuperBowl III back in 1969) that I can GUARANTEE it pays off. No futures here, no paper play. The guarantee play CANNOT be done with PAPER, its gotta be with the real thing, and its not Coca-Cola. Get gold (or silver) NOW and place orders to continue buying down to 1500. IF the bottom is in, gold WILL NOT go below it. Worst case, you converted your paper to gold. Best case, gold rockets to 4500, where you will triple your return.For those without DEEP Pockets (need leverage)==============================CAUTION!!!! These plays are playing in the futures world. Remember what happened to MF Global (and what Alf Field says about futures). The futures world is like a casino, you can get a good run, but when you go to cash out, they can be closed and bankrupt. Futures is highly speculative and you CAN LOSE MORE than what you have in your account. When MF Global went belly up, they froze all accounts and positions, means you CANNOT exit, and you open yourself up to unlimited losses.Conservative Futures Play---------------------------------Get long 1 gold futures contract here at 1640, place a stop at 1500. Youre risking 140 pts which is $14k/contract. If it runs to 4500, your return will be +2860 pts x 100 = 286k.Riskier Futures Play----------------------------If willing to take more risk buy 1 here at 1640 and place a buy order at 1590 and 1540, you will end up with 3 contracts total with an avg price of 1590, with a stop at 1500, you risk 90 pts, total risk is $27k. This is assuming that they take gold down another 100 pts (which I DO NOT think is gonna happen but need to be ready for it). Upside is +2910 pts x 300 = 873k. Thats a 32-to-1 return.Note, it may not drop another 100 down to 1540, which means you will only have 1 contract to ride up.SNOWBALL Play------------------Lets say gold doesnt go down, and you only have 1 contract here at 1640. You need to have a plan going forward to add to your position. Say like every 50-100 pts up, add a contract. The gains from the original contrct and those newly added on will start to enlarge like a giant snowball where you could end up with many more contracts than you started. Positive: really big awesome gains; Negative: will get taken out if a large drop occurs. The next largest drop should NOT be greater than 15%.Bottom Line========IF the bottom was made of Dec 28, 2011 AND Intermediate Wave 3 of MAJOR Wave 3 has started, gold will not stop running. I think since the 1550-1900 range was covered, the black swan event could take gold shooting up ABOVE 1900 (or higher) on a ballistic shot and then start trading higher from there. Going back to EW, the only wave that could retrace 100% is wave 1/2 (which we are in now), which means you need to have funds to buy if it heads to 1520 again as a short-term minor correction.This aside (and I dont think its gonna happen), the lowest right now I think it can go is about 1605. You also have to know that rollover is coming in the next two weeks from the Feb contract to the April contract. Rollover times are very volatile.I think thats enough for now, I have a lot more on my mind which I will try to post in the coming days. Im mainly now planning (and taking positions) what to do with the line drawn in the sand at 1500.For those out there: These are my opinions and are NOT to be traded because most of this I get from my dreams so in reality has no factual basis, and you have to be a moron to trade from some poster on a gold site saying to go long.P.S. For those who would like regular updates, send me you email address and I will put you on my mailing list.
