I do my own TA purely for my sake and sometimes I will post that here. This is NOT trading advice and I am wrong as often as I am right, so take this for what it's worth: free TA. However, this is what I see in the gold market and if I am right, what we should expect say over the next six months.

I see a reverse head and shoulders developing, very similar to the one from March 2008 to September 2009, except this one is not as deep and not as long. The left shoulder took gold down to $1,075 in December, the head down to $1,045 in February, and *I believe* we have just put in a slightly higher right shoulder at $1,085 yesterday. The right shoulder could fall as low as $1,065 over the next week without invalidating this pattern. I just happen to believe the low is in already.

Note that the downtrend from the early December high was broken on February 16. A broken downtrend does not necessarily imply a new uptrend. It simply means we're not going any lower for the time being.

The neckline is roughly $1,145 although one could say that $1,160 would be more convincing. A positive break of the neckline indicates a high probability that the pattern will complete.

The length of the left shoulder was 25 trading days, the head was 35 trading days, and the right shoulder is so far 16 trading days. Based on symmetry in these three segments, the right shoulder has another 10-20 trading days to get the gold price back to $1,145. This would put us in mid-April.

If we break the neckline, the pattern is confirmed, and we should expect a move higher roughly the depth of the head ($100) over the subsequent four months. In other words, we should see roughly $1,245 by mid-August. Of course, this would represent a new all-time high, and would then likely see gold off to the races again targeting $1,300 - $1,400 in the fall.

Jim Sinclair's firm $1,650 is not unfathomable in this scenario by January.

If we see this pattern play out, it'll be a slow, grinding, but solid move to $1,245 by August. In other words, it would be the perfect environment to release positive drill results, and an updated PEA.

Aggressive traders can try buying the bottom of the right shoulder here and now and holding. A break below $1,065 invalidates this pattern, and a break below $1,045 means the downtrend has resumed.

I personally hope we get the move above the $1,145 neckline BEFORE Kimber releases any more stellar results (i.e. in mid-april $1,145 gold with 97-cent Kimber). That way, I can be assured we are in the game for new highs in gold, but pick up gold in the ground still at rock-bottom prices. Talk about a deal of a lifetime!

Hysteria