#139. Gold Investment And Tetrahedron

Find Out If There Is Such Thing As Timing The Market

What I am about to show you here will be something that you may not have seen anywhere else. In a way, this piece of article can be somewhat controversial. I know I risk myself being called a madman if what I show here does not come true. But then again, it's just my thoughts and should not be taken as fully accurate. It also should not be taken wholly as a guide for your investment. 

This is based on the Theory of Tetrahedron. The price moves in a set of triangles forming a tetrahedron. A tetrahedron is a 3 sided pyramid. In a 2-dimensional form, the tetrahedron is laid out as three triangles as you see below.

The above shows the gold price chart around 29 October 2008. I have shown this to my friends about the possibility of the gold price (red line) to go up and form another triangle.

The observation I gather is that, after 3 triangles, the graph will go up. This is something like the Elliot Wave. Perhaps I will discuss the Elliot Wave in my future articles.

Certainly, I took a position to purchase some gold on 28 October 2008. I was confident that the gold price has dropped to a low during that period. This is based on the triangle shape. The upside and downside of the triangle are usually of equal length. Hence, you can see that the price has reached quite a low.

The above graph shows what the gold price is today, 2 December 2008.

Did you see that?

Fair enough, the triangle is forming. Although not as big as I have imagined. Still, it is a triangle in the making. Sadly, I didn't sell it when it reached a high on 24 and 25 November 2008 (US$822.50) as I was busy to go to the bank. Could have made a few bucks there.

Now, I just have to wait for the price to hit a low to take a new position to average out the cost. Need fresh ammo and wish I have some.

As I write this now, the gold price is at US$767.50 per ounce. Well, I am still in the profit zone. But a smaller margin. Hope it doesn't go too low.

Can we time the market?

This is always the argument. Can we time the market? Can we know when is the best time to enter the market? When to take a position? When to leave the market?

From the above demonstration, to an extend, I have proven that we indeed can time the market. Of course, it is not as simple as you read here. I employed other charting tools too in finding the right timing. I used the MACD (Moving Average Convergence Divergence) charts. I used candlesticks charts.

I know there will be argument that we still need the fundamental news. Lately, I have found that the so-called fundamental news were of no use to me. The market reacted differently to what we read in the headlines. When it is expected to go up, the gold price went down instead.

So, what do you think? Please leave your comments.