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What Do April/May 1978 And April/May 2008 Have In Common?

 

By Ronald Rosen

May 21 2008 10:16AM
www.wilder-concepts.com

   

“Time is more important than price; when time is up price will reverse.”

W.D.Gann

“A rumor is swirling around the Internet that an inglorious end to the U.S. economy is imminent. Unlike previous rumors to this effect, this one carries the weight of recent events in the financial realm and has many believing the rumor will come to pass.Let’s examine some of the claims being made: On March 18, 2008, a “closed door” session of Congress was held for only the fourth time in history. According to House Rule XVII, clause 9, it is forbidden for members of the U.S. House of Representatives to reveal the discussions held behind those doors. The penalty for leaking such information includes loss of seniority, fines, reprimand, censure or expulsion. According to news sources, one purpose of the meetings was to discuss new surveillance techniques to be used by U.S. Homeland Security. Rumors continue to swirl as to what the other topics of discussion took place in that meeting.

Following is what is rumored to have been discussed: Imminent collapse of the U.S. economy by September 2008; imminent collapse of the U.S. Government finances by February 2009; possibility of civil war within the U.S. resulting from the collapse; detainment of “insurgent U.S. citizens” in anticipation of their moving against the government; the potential for violent action taken by citizens against members of Congress due to the collapses; the merger of the U.S. economy with those of Canada and Mexico as a solution to the collapse; the introduction of a new tri-national currency called the “AMERO” as another economic solution.Needless to say, that’s a lot of information to process. Unfortunately none of it can be verified and it essentially falls under the category of rumor and as such must be treated as suspect.”

There is no conceivable way that we should base any of our investment or trading decisions on something that is considered a rumor. So let us take a look at the charts of gold, silver, the S &P 500, and the D. J. I.

A. and see if the “imminent collapse of the U.S. Government finances by February 2009” has any significance based on Delta Long Term turning points.

In April/May 1978 the CRB index began its final huge move up. It topped in 1981. Crude oil was and is a major component of the CRB Index.

CRB INDEX 1978 to 1981 NOTED

1978

On April 25, 1978 gold began its final move up to $850.00

GOLD DAILY 1978

30 years later, on May 2, 2008, gold may have begun its final move up to heights as yet unknown. A top is due at Delta Long Term # 3 high on 2/18/2009.

GOLD WEEKLY 2008

On April 28, 1978 silver began its climb from $4.91 to an ultimate high of $50 an ounce.

SILVER WEEKLY 1978

On May 2, 2008 silver may have begun its final move up to heights as yet unknown. A top is due on 1/14/2009.

SILVER WEEKLY 2008

“A flat correction differs from a zigzag in that the subwave sequence is 3-3-5. Since the first actionary wave, wave A, lacks sufficient downward force to unfold into a full five waves as it does in a zigzag, the B wave reaction seems to inherit this lack of countertrend pressure and, not surprisingly, terminates near the start of wave A. Wave C, in turn, generally terminates just slightly beyond the end of wave A rather than significantly beyond as in zigzag.”

E. W. P.

Flat Correction

S & P 500 QUARTERLY

The MACD indicator has turned bearish. The black line has crossed below the red line. The MACD on the Quarterly chart does not change direction often. Therefore, when it does it is providing an important message. This message is bearish.

Super Long Term Delta # 1 LOW should arrive about March 2009 along with LTD # 13 LOW.

If this formation proves to be a true flat correction the bottom should be somewhat lower than Wave A. Wave A bottomed at 767.50.

S & P 500 MONTHLY

The D. J. I. A. also has a Super Long Term Delta # 1 LOW that should arrive about March 2009 along with LTD # 13 LOW and is subject to a much greater decline than the S & P 500 due to the expanded flat pattern.

“Far more common, however, is the variety called an expanded flat, which contains a price extreme beyond that of the preceding impulse wave. In expanded flats, wave B of the 3-3-5 pattern terminates beyond the starting level of wave A, and wave C ends more substantially beyond the ending level of wave A.”

E. W. P.

D. J. I. A. QUAR

TERLY

The Delta Turning Points are telling us that between now, May 2008, and the first quarter of 2009 the words are PREPARE AND BEWARE. If you are an investor or an active trader who would like to know what else the Delta Turning points are saying:

Subscriptions are available at: www.wilder-concepts.com/rosenletter.aspx

Stay well,

M I G H T Y I N S P I R I T

Simeon - A Picture of Patience

Ron Rosen & Alistair Gilbert

***

Disclaimer: The contents of this letter represent the opinions of Ronald L. Rosen.  Nothing contained herein is intended as investment advice or recommendations for specific investment decisions, and you should not rely on it as such.  Ronald L. Rosen is not a registered investment advisor. Information and analysis above are derived from sources and using methods believed to be reliable, but Ronald L. Rosen cannot accept responsibility for any trading losses you may incur as a result of your reliance on this analysis and will not be held liable for the consequence of reliance upon any opinion or statement contained herein or any omission. Individuals should consult with their broker and personal financial advisors before engaging in any trading activities. Do your own due diligence regarding personal investment decisions.