Thursday, July 9, 2015

Gold and Fibonacci Retracements:

I was a guest on BNN’s Market Call on Monday and I have to apologize to a BNN caller who asked about gold and a Fibonacci Retracement. I skated around the answer because – without a chart I just stated that 50% was not a Fibonacci number. Fibonacci Retracements are ratios used to identify potential reversal levels. The most popular Fibonacci Retracements are 61.8% and 38.2%. Note that 38.2% is often rounded to 38% and 61.8 is rounded to 62%

Our chart is a monthly of gold setting out the advance from financial crisis low – of about $700 to the 2011 price peak of about $1900 – then down to the current lows of about $1160. The current retracement number is about 62%.

Most interesting is a look at the TSX most actives at the close July 8 – out of a total of 100 most actives only about 15 issues were up on the day – 10 being gold stocks – some symbols, ABX, BTO, LSG, NGD. G, K, ELD, AFM and AR. I just took a call form Fibonacci who thinks now is the time to bottom fish.

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