Jim’s Mailbox

Posted at 5:00 PM (CST) by & filed under Jim's Mailbox.

Greetings Jim,

On March 15, our computer models generated a cycle low signal for the weekly chart of gold, indicating that the latest intermediate-term cycle low (ITCL) was likely in place. Price behavior during the last two weeks has confirmed that a new intermediate-term cycle is in progress.


In September 2011, our computer models predicted the likely development of a long-term correction in the gold market. The top formed as anticipated and the subsequent correction developed into a consolidation pattern that favors an eventual resumption of the secular bull market from 2001. However, the current intermediate-term cycle faces an important test and market behavior during the next several weeks could provide a meaningful signal with respect to long-term direction.


The short-term cycle has maintained a bearish translation for the past several months. However, a cycle low signal was nearly generated today, indicating that the latest short-term cycle low (STCL) may have formed during the previous session, and the short-term cycle is on the verge of transitioning to a bullish translation.


Technical indicators on the daily chart are effectively neutral overall, suggesting that direction is in question as prices hold above previous lows of the downtrend from October.


Our Gold Currency Index (GCI), which tracks the intrinsic value of gold as an international currency, is also holding near comparable short-term highs. However, a slight positive divergence has developed between the GCI and gold in US dollar terms. Notice that the GCI momentum indicator (MACD) has moved into positive territory, while the gold momentum indicator remains in negative territory. As longtime readers know, divergences between the GCI and gold in US dollar terms usually forecast the direction of the next meaningful move, so the slight positive divergence is a bullish short-term development. It will be important to monitor this divergence during the next several sessions.


The consolidation formation in gold is undergoing an important test and a meaningful signal with respect to long-term direction could occur during the next several weeks. Therefore, it will be important to monitor the character of the rebound off of the last ITCL closely.

Best Regards,
Erik McCurdy
Senior Market Technician

Prometheus Market Insight


This law has been planned since December 2012.

After Cyprus, this law may pass easily at the State Duma. Most of the luxury cars are built by Europeans and mostly Germans: BMW, Mercedes, Audi. Next comes Volvo and Land Rover.

Best regards,
CIGA Christopher


Payback can be a bitch.


Additional tax on luxury cars approved by government’s commission
© RIA Novosti, Grigory Sisoev
12:16 27/03/2013

MOSCOW, March 27- RAPSI. The government’s lawmaking commission has approved amendments to the Tax Code introducing an additional ‘luxury’ tax on cars worth more than 5 million rubles ($162,000), Vedomosti business daily writes on Wednesday.

The proposed amendments will now be submitted to the State Duma. According to the government website, the commission approved the version sponsored by the Finance Ministry.

Cars with average value of more than 5 million rubles will be qualified as luxury items and will be added to a special list compiled by the Industry and Trade Ministry.

Owners of cars which are less than five years old and cost between 5 and 10 million rubles ($323,903) will pay a double rate; 10-15 million ruble cars less than 10 years old, or cars worth over 15 million rubles ($485,855) and are less than 20 years old will be subject to a triple rate tax.