Larry's last stand.

" While gold has rallied to just above $1,700, it has thus far failed to take out my system resistance at the $1,727 level, let alone monthly resistance at $1,740 to $1,750." Larry Edelson.

This morning, 6:32 Texas time, gold has reached 1,744. Here are some further facts indicating that Larry has been wrong, 1. Short contracts on gold had fallen from 41,000 to 11,000 and 2. the US Dollar Index had dropped another 0.5 to 79.5. I expect Larry to reverse by next week.

Larry Edelson is an accomplished commodities trader and a far better chartist than most of us will ever be. So, why does he continue in his error and how concerned should we be about his forecast that gold will drop before the big rise?

I think the explanation for Larry's erroneous forecast lies in the fact that he is mixing technical analysis with economic forecasts in a non-permissive way. That is, he believes that the ECB and the FED will not increase printing (which he believes is needed for the gold rally to rekindle) untill after the Stock Market AND the gold market crashed. So, his technical forecast is based on a belief that is proving to be incorrect. But, Larry is an honest guy and he will admit his mistake. He has already done so with the Stock Market.