Wednesday, November 26, 2008
Another fractal encouragement
Fractals are repeating patterns that can be predictive at times. Take a look at the charts below of Newmont Mining (NEM), an old blue chip gold mining company on every institutional investor's radar.
Then (in 2000, notice the months on the chart):
Now (notice the months on the chart):
If you believe, like I do, that the fundamentals are solid and a general equity bear market condition exists that is similar to 2000, then there is no reason to think a similar pattern can't repeat and this often happens in markets. See my previous post for a fractal example that made me a lot of money in the recent past.
If the current chart pattern "rhymes" with the previous one (since they're rarely perfect matches), we might could make some money by anticipating this. By the way, did you notice the lower MACD indicator on the two charts above for some more uncanny similarity? Anyhoo, this is what happened next back in the old days of 2000-2001:
By the way, if you're more patient than I and you're an actual investor, here is what happened next in good ol' 2000 for someone with a 3 year time horizon on Newmont (NEM):
Me, I'm in for the ride. Gold stocks are the GO TO SECTOR FOR THE NEXT FEW YEARS. Embrace this. Enjoy this. Buy low now so you can sell high later. Buy! Comprar! Buy! Acheter!