Resource World Magazine

16 www.resourceworld.com a u g u s t / s e p t e m b e r 2 0 1 5 T he Charles Nenner Research Center uti- lizes proprietary algorithms to calculate and forecast moves in stocks, bonds, commodities, and currencies. We analyze patterns and find cycles and price targets for stocks, bonds, commodities and currencies. (We will explain cycles later.) Over three decades ago, Dr Charles Nenner developed the system, which is followed by hedge funds, family offices, traders, institutions, and investors worldwide. Let's dive right into a sample of our research, and explain cycles and target analysis, using gold, sent out on July 20, 2015. It is taken from our morning update, which is published three times a week, covering the four global macro areas men- tioned above. (All prices in US $) Gold (Based on the AUG Futures Contract) – The sell signal for gold, given at around $1,170 continues. However, short term cycles are near their projected cycle low. A close above $1,145 is needed for a buy signal. We agree that gold is still weak – short term. $1,120 is a closing level that is a next downside target. However, that provides target level analysis. For timing, there is a daily cycle low this week. Therefore, as a short term trade, traders can consider going long, with a stop just below $1,120. Our cycle and target system sees the tar- gets as $1,165, then $1,195, and then $1,220. The next daily cycle high is pro- jected around Aug 7. That is the shorter term gold picture. Let's look back, longer term, and examine cycles and history with gold prices. Many investors forget that gold prices only broke $500 oz for the first time in the late 1970s (after going off the $35 oz standard in 1972). Then, gold prices came down (with two retests of the $500 level in the early 1980s, and in the late 1980s), until gold broke $500 again in 2006, after spending almost two decades in a bear market. In this age of reduced attention span, this is hard to imagine. It is worth noting in parallel that the Dow Jones first reached 1,000 in 1966, and then did not return to that level until 1982 – over fifteen years later. Since then, the Dow is up over 18 times in 34 years. Gold rose to under $1,000 oz in 2009, came down for a year, and then rose to the double top in 2011 around the $1,900 oz level, before coming down for the last four years. In effect, it went up nine years, from 2002 until 2011, and has been down for the last four. Our system called the top around $1,900. Since then, it has been a tough bottom to call, although gold has seen several short term bounces and sev- eral declines. Given these swings, how does a gold and resource investor plan for the future? Most investors in gold and other resources have not taken advantage of a tool known as cycle analysis. Yet, it was the wealthiest family in the world over a century ago that pioneered the use of cycles. After the French Revolution in the late 1700s, the Rothschild family created the major banking house in Europe, creating the structure for the international bond market, which made bonds more easily tradable. This was important following the difficult 18th century economic upheavals, which left many European countries in the 19th century with significant budget defi- cits (sound familiar?) due to wars, past and future. The Rothschilds hired scores of accoun- tants to calculate "cycles" in agricultural commodities, interest rates and other eco- nomic indicators. They researched across many hundreds of years to find prices in these areas. The word cycle comes from the Greek (no current pun intended) word meaning circle. While many think of today's nine- year inventory cycle or the 60-year cycle in interest rates, the Rothschilds plotted many cycles from data series going back hundreds of years in order to find over- lapping patterns where the majority of the cycle tops and bottoms coincided. According to their calculations, this increased the likelihood that the combined cycles would give accurate predictive postures for all the categories of traded instruments. The results were clearly quite Utilizing cycle and target analysis for commodities by David Gurwitz, Managing Director, Charles Nenner Research Center iNvESTmENTS

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