FSO Weekly Charts from Stephan Bogner Feb. 27, 2004

About Triangular Chart Patterns

In triangular times, a price fluctuates within the boundaries of the triangles' legs. These formations consist ideally of 5 segments/waves. At about ¾ in front of the apex, the price is trespassing the boundaries of the triangle and starts trending in a certain direction. The triangle is completing with an explosive thrust – either to the upside or downside. According to general cycles theory, the length of the thrust ranges at least between 75 and 125% of the first wave. Please see the article "2 Opinions – 1 Triangle" for more information.

~ Welcome To The Thrust ~

For more than 20 years, the goldprice has been caught in a triangle. In the mid-1990s, the goldprice managed to cut across the upper triangular leg and broke out at $400. Instead of thrusting to the upside right away, the goldprice used a pullback to its apex at $250 (remember that every second triangle is using a pullback before thrusting). Remarkable is the timing of the "Washington Agreement on Gold", which event coincides perfectly with golds` apex. Since then, the goldprice has always been marking higher lows and is thrusting to the upside.
The Commodities-Index CRB has been moving within triangular boundaries since 1993.The 5^th wave succeeded to break the upper leg and the CRB-Index is thrusting ever since.
Beginning in 1998, the goldprice was outperforming the silverprice for about 6 years, because silver was in a downward-sloping triangle relative to gold. Having reached its apex at the very end of 2003, this chart pattern is completing with an explosive thrust at the moment: the silverprice is rising faster than the goldprice.

~ About To Thrust ~

Approximately every 10 months the USD-Index has been marking lows (see vertical yellow lines). Since June 2003, the USD-Index is moving within a triangle. Fake-breakouts are not uncommon in heavily traded markets.
The Goldprice in Euro has been in a dominating triangle since the end of 2001. A breakout to the upside could indicate (among other possible scenarios) that the goldprice is rising faster than Euro…
The goldprice in Rand has been trapped in a triangle since the end of 2001. A breakout to the upside could indicate (among other possible scenarios) that the goldprice is rising faster than the Rand…

~ Soon to Thrust ~

Major stockmarket indexes are moving within two tighter sloping trendlines since 1995. Wave 4 of 5 is in the process of being made. After that, wave 5 will bring clarification whether the triangle will be completed with a thrust to the up- or downside.

Chart courtesy: www.stockcharts.com and www.sharelynx.com