sinclair formula 4 me (a dummy)
On August 10th 2011 gold closed at 1795.40.
Jesse Livermore discovered in the 1920's that if you take a high closing price, a price surrounded by lower closing prices, you can predict the next low closing price to be surrounded by higher closing prices.
The closing price before 1795.40 was 1717.20.
The closing price after 1795.40 was 1765.60
Thus, 1795.40, being higher than the 2 others is a candidate for being a high closing price.
The formula says take 1795.40 and compute its square root:
Its square root is about 42.37.
The formula says subtract 1.00 from the square root:
42.37 - 1.00 = 41.37
The formula says multiply the result by itself for the predicted next closing low price surrounded by higher closing prices:
41.37 times 41.37 = 1711.48
UNFORTUNATELY, PANIC FOR GOLD SET IN AND CAUSED 2 MORE CLOSING HIGHS, HIGHER THAN THIS ONE, SO I HAD TO RECOMPUTE 2 MORE TIMES TO GET THE LATEST POTENTIAL CLOSING LOW PRICE SURROUNDED BY CLOSING HIGHER PRICES.
USING THE SAME FORMULA MY LATEST PREDICTION IS NOW 1768.20.
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