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Five Things You Need to Know: Mr. T Gold Indicator Gives Sell Signal


Recent news events are signaling an important sell signal for gold.


Kevin Depew's Five Things You Need to Know to stay ahead of the pack on Wall Street:

The pieces are falling into place. The weight of the evidence taking hold. And like free cocktails at a circus barker's convention, the damage is beginning to ad up.

First it was the announcement that director John Singleton (Boyz n the Hood) has signed on to bring The A Team to the big screen, with a rumored cameo by Mr. T. Next came the announcement of a Mr. T graphic novel scheduled to be released by a British publisher (Mohawk Media) this summer.

Now, Mr. T is back in the news thanks to a controversial Snickers ad that was recently pulled in Britain over complaints it was homophobic, according to the London Telegraph. The ad never aired in the U.S. , but the fact it aired in Britain is rather appropriate considering London is the largest market for global Over-the Counter gold trading.

The bottom line, this news event marks a major sell signal for the Mr. T Gold Indicator, and suggests an important top may be forming.


1. What is the Mr. T Gold Indicator?

The Mr. T Gold Indicator is a proprietary technical indicator created by Minyanville to identify and anticipate prospective exhaustion points in the price data for gold. Some technical indicators rely on formulas applied to the price data of a security, but these types of indicators can be very subjective, requiring an analyst to view the signals that are generated within the context of still more indicators!

The Mr. T Gold indicator, on the other hand, is completely objective and easy to use. All you have to do is look at Mr. T. What could be easier than that?

2. How Does the Mr. T Gold Indicator Work?

Good question. The Mr. T Gold Indicator is based on the five squares series of price points using .9444 for downside trend factors and .05556 for upside trend factors, multiplying either .9444 or .5556 by the close of the high (or low) that is referenced by the first series of price objective within the oscillating trend channels.

Hahaha! Just kidding (although it would be cool if that really was the Mr. T Gold Indicator formula). The truth, however, is the Mr. T Gold Indicator is simply based on the appearance and popularity of Mr. T.

Minyanville has discovered that over the years Mr. T's appearance in the news and rises and falls in his popularity are subconscious reminders telling us when the yellow metal has reached an important price peak.

3. Surely, you cannot be serious, do you think I am a fool?

Like Mr. T, we pity the fool. The reason Mr. T pities the fool is because Mr. T knows his gold. In fact, Mr. T developed his gold-wearing ability during his days as a bouncer, confiscating the gold jewelry of those he kicked out of nightclubs as a symbol of his toughness and virility.

Mr. T knows human behavior, and he knows gold. So who are you going to believe? Some pinheaded precious metals analyst at Bigwig, Doofus and Booyah Securities? Or Mr. T?

Shut up, fool! You're going to believe a guy whose first name is "Mister", middle name "period", last name "T"!

4. The Mr. T Gold Indicator in Action

(1982 - 1994)

At this point you are probably thinking, "Quit your jibba jabba." Does the Mr. T Gold Indicator work? How good is the Mr. T Gold Indicator?

Rest assured, the Mr. T Gold Indicator has been weighted, smoothed, eyeballed and thoroughly back-tested for generalish accuracy using both the Internet Movie Database (IMDb) and Wikipedia (the free, somewhat accurate encyclopedia that anyone can edit, even that guy who works in your building with the weird comb-over and Charlie's Angels lunch box... and the more we think about it, probably especially him!). Let's take a look at the historical accuracy of the Mr. T Gold Indicator.

Gold 1981 -1994

Gold 1995 - 2005

5. A Fractal-Based Look at the Mr. T Gold Indicator

As you can see, the Mr. T Gold Indicator is a robust tool for identifying high-probability price exhaustion points in gold, both on the upside and the downside. In the above charts we took a long-term view of gold, using the Mr. T Gold Indicator to identify price exhaustion points on monthly charts. In addition to the yellow metal, the indicator is also useful in identifying similar exhaustion points in the metals stocks themselves, such as Newmont Mining (NEM), Barrick Gold (ABX), Goldcorp (GG), AngloGold Ashanti (AU) and Gold Fields (GFI), all of which are flashing similar sell signals.

But what about weekly, daily, even hourly and minute-by-minute charts? Don't give me no back talk, sucka! Naturally, it stands to reason that if the Mr. T Gold Indicator is indeed a robust price exhaustion tool then it should apply to smaller time frames of gold price data. That is, because the gold market is a self-organizing complex system with self-similarity on different time scales, the Mr. T Gold Indicator should be just as useful in these self-similar and subdivided minute time frames as it is on a larger scale. But this must be tested!

As you can see from the chart below, on February 22, 1983, gold opened very strong as the opening title sequence to the A-Team television show rolled. However, in this episode, "Bad Day at Black Rock", (see A on the chart below) Mr. T's character, Sgt. Bosco "B.A." Baracus, was seriously wounded by gunfire.

About 15 minutes after the first commercial break (see B on the chart below) gold began a brief rebound as The A-Team found medical attention for B.A. from a small-town doctor.

However, in the next few minutes, it became clear that the small-town doctor suspected B.A. may be part of a biker gang returning to rescue their jailed leader. Gold collapsed intra-day (see C on the chart below) as the doctor warned the local sheriff of his suspicions. It appeared B.A. was doomed.

About 22 minutes later (See D on the chart below) Hannibal was able to convince the sheriff that B.A. was one of the good guys. Gold rebounded by the end of the episode as B.A. recovered and the A-Team helped the sheriff protect the town.

Gold, five-minute intra-day chart, February 22, 1983

For more, watch as Hoofy and Boo report on the Mr. T Gold Indicator and have an unexpected guest!

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No positions in stocks mentioned.

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