Posted Aug 21, 2015 by Martin Armstrong
COMMENT: Marty, I want to thank you for showing me how real analysis actually works. I think so many people have been use to the typical buy and hold and its going to the moon forecasts that they do not understand how you even function. I am writing because I think many may misinterpret how you analyze markets. Like your gold forecast of Socrates. I can see that time and price are separate and your turning points can be a high or low. The forecast is a turning point and the interpretation is the trend and price leading into that turning point.
I showed a friend what Socrates wrote on gold and he didn’t get it. He was so use to the typical nonsense that he thought you will always be right because you address both sides. I explained to him it was clear. To continue to move higher gold had to exceed the previous week’s high and a failure means that target inverts and can present a low. Many just do not understand price and time are separate. I can see the difference in how you forecast but some who are use to the gold promoters may not.
Not sure if this helps, but I know you always listen to all sides.
Keep up the great work. We are all not that dense.
REPLY: Yes, you are probably correct. It is hard to keep that in mind when I am used to professionals rather than the general public. A REAL analyst must ALWAYS define where he is right and where he is wrong. The market is infallible, never the analyst. We are along for the ride. This is indeed about trying to listen to what the market is telling you for it is never wrong.
Secondly, it may be exactly opposite of what people believe, but it is far easier to forecast years out than tomorrow. The reason is rather simple. If gold rallies to 1150, 1185, or 1225 and then peaks on the turning point, it is irrelevant. A high is a high regardless of how high unless it starts to exceed Reversals on the monthly level where trend changes. This is what I refer to as NOISE. If we get a high or low in the short-term it does not change the long-term. So people get all flustered with a rally but to me its no big deal until it proves to be something on the monthly level. Everything else is just noise.
In trading as in analysis, just NEVER enter a forecast or a trade without defining where you are right and where you are wrong. So saying gold will rally but it must exceed the previous week’s high is defining where you are right. It is not trying to pretend you are never wrong. It is the professional way of doing things. There is no guessing. It is the IF-THEN-ELSE approach and professionals will not accept anything less.
Tags: Price and Time, Socrates