HKHSI and NASDAQ Downturn (5/5/2000)

Major Correction in the Horizon (4/15/2000)

Prof. Kai Keung Mark is a retired professor, Dept. of Biology, The Chinese University of Hong Kong and Dept. Head and Principal Lecturer, Dept. of Science, Hong Kong Institute of Education. He has three biotechnology patents. He uses his understanding of high technology to forecast market movements . He has published 13 articles in Financial Trend, and leading Hong Kong stock analysis journal plus many other Mark's letters since 1987. His prediction reliability rate reached 80%. He accurately predicted the October crash (10/18/87), the bottom level of 1990(3/5/90), the peak level of 1994 (5/11/92), the peak level of 1997 (2/12/96), the peak level of 2,000 (8/22/99), the peak in March 2000 (2/20/2000), the bottom in September, 2001, the US bottom in 2003 (5/28/2003), the HK bottom in 2003 (6/13/2003), the US peak in 2007 (11/14/2007), and the HK peak in 2007 (1/9/2008).

Gold bubble to burst in 2006

Gold price is forming a bubble.

Price of gold, silver, oil, stocks and bonds are determined by supply and demand, but supply and demand, besides their practical elements, are overwhelm by psychology, thus their price movements show a lot of similarities. Their price show cycles with sharp peaks and drawn out bottoms as well as many common chart patterns.

Gold produced its last peak by 1996 with double head formation, then form a down move with three fan lines. In its bottom, it produced the classical double bottom formation in 2000 and 2001, followed by a steady up channel. Price movement is getting more and more volatile, so a bubble is in the making. (see fig. 1) Gold bubble will burst

The author forecast that gold price will rise faster and faster, and with bigger oscillation .It also will form steeper and steeper up channel in the coming months. (see fig. 2) Finally, the dramatic up shoot cannot be sustained, thus the bubble will burst by 2006. This turbulent up move will form a turn around pathern, and price heads down again, forming a down trend of another several years. Similar story had just happen to the oil price. (see fig. 3 ) Oil behave similarly

Oil also have a long up move cycle of 3 years, reaching a faster and faster pace, or we called a bubble, and end up in a classical head and shoulder top pattern which the gold price is likely to develop in a similar way. The author forecast that oil will have a long down move below 55 US per barrel allowing the US economy as well as DJIA to boom for another one or two years.

Commodity and stocks all form good chart patterns because their movements are controlled by psychology and crowd behavior. It is too early to tell when gold price will reach the top, thus it is better to wait for the chart to tell you. If one wants to sell gold like the author does, one should get a higher price when one recognizes the formation of a top feature such as double head formation that had appeared twice in the recent gold charts already, or the classical head and shoulder formation. However, one never can hit the very top using chart signal.