Category Archives: Bitcoin

The work of Edson Gould is useful primarily because we have the benefit of hindsight to confirm or reject the claims that have been made. Of the most commonly used methods of Gould’s work has been the Speed Resistance Lines and Altimeter. Both have worked exceptionally well when applied correctly.

Of course, there have been times when we have applied these tools either at the wrong time or the wrong stock or index. Surprisingly, as our work has shown, there have been few instances of this. It has more to do with Gould’s work than anything that we’ve been able to add to the topic.

This brings us to the topic of an approach that Gould has dubbed “Price Relationships” and “Time Relationships” method. Gould outlines a mathematical formula on how to arrive at a projected PRICE and TIME of the top “bull move” in a market. We have not attempted to utilize the TIME approach because it generally seems too exaggerated to make such a claim with a straight face.

Below we have included a chart from Gould’s November 12, 1979 projection for the Dow Jones Industrial Average. Based on Gould’s work, it was estimated that the Dow Jones Industrial Average would climb to 3,000 by 1990.

The magnitude of this claim needs to be put in the proper context. In the period from 1966 to 1979, the U.S. economy had mired through a period of stagnation.

The stock market was rangebound on a nominal basis and in real terms, experiencing the equivalent of a crash, in spite of the increasing number of buybacks by corporations.

Sentiment in the economy and the stock market wasn’t all that great as rising interest rates were at the forefront of every discussion. Within this context, Gould proposed that the Dow Jones Industrial Average would somehow increase at least three times the current level by 1990.

The record, based on the work of Gould, speaks for itself.

This brings us to the question of how did Gould achieve this assessment. For now, we will present, for the first time, the number generated for the future price of Bitcoin based on Gould’s “Price Relationships” while avoiding the topic of Gould’s “Time Relationships.” We’re hesitant to roll out a time estimate until we have worked out some of the kinks.

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Bitcoin Review

Posted on April 11, 2022 by nlo-admin | Leave a comment

In the coming days, we will issue a price projection for Bitcoin based on the work of Edson Gould that we have not used in the past. Before we submit this future price projection, we need to offer a brief review of our prior work on Bitcoin using the work of Edson Gould and Charles H. Dow.

Below are the highlights of our work on the topic of Bitcoin and the price of Bitcoin at the time the commentary was made:

April 10, 2013 at $165.00 (note: using Mt. Gox Index)

“The current parabolic increase in Bitcoin has a conservative downside target of $89.45 and an extreme downside target of $76.05.”
actual low at $66.34 on July 5, 2013

November 19, 2013 at $541.83

“It seems that Bitcoin has experienced a temporary peak in the price.” “Our conservative downside target for Bitcoin, based on the peak closing price of $785.50 is $384.83. The extreme downside target is $261.83. The worst case scenario is for Bitcoin to fall as low as $152.83 as indicated by the red line on the chart.”
actual low at $177.28 on January 14, 2015.
“…the next conservative upside target is $1,154.49 if the most recent peak of $785.50 is exceeded.”
actual peak at $1,237.96 on December 4, 2013.

November 30, 2017 at $9,916.54

“conservative downside target at $3,739.47.”

December 22, 2017 at $13,857.14

“We believe that there is going to be limited upside in the near term.”
“We think that the conservative downside target will be achieved before a new high is seen.”
“this run-up in bitcoin (+10,828%) is only slightly exceeding that of the 2011-2013 increase of +9,771%, as seen in the chart below.”
“In all prior booms, the subsequent bust AVERAGED –70%.”
“conservative downside target at $6,884.31.”

April 27, 2018 at $8,978.33

“As of April 27, 2018, Bitcoin is priced at $9,278.22 and has achieved our target of $9,148.23 as outlined in Dow Theory.”
“At this stage in the game, Bitcoin is in a no-man’s land.”
“While there are always three directions that the price could go (up, down, or sideways for a long time) this juncture is strictly to be played for the extreme of going back to the $11,479.73 or $6,914.26 level.”
“…if Bitcoin exceeds $11,479.73 it would be a huge reversal of the declining trend and could be consider the confirmation of a new bull market with the minimum upside target of $20,000. Under the circumstances described, Bitcoin could achieve a $37,000-$52,000 level before a meaningful downside is experienced.”

We have never believed in Bitcoin. What we have done is track the price. Based on the work of Charles H. Dow, price informs us enough to not have faith in Bitcoin or any other assets/commodity but on the collective knowledge of the most informed participants, large and small. Dow and F.A. Hayek’s views are summarized in the following quotes:

On February 25, 1902, Dow said:

"The one sure thing in speculation is that values determine prices in the long run. Manipulation is effective temporarily, but the investor establishes price in the end. The object of all speculation is to foresee coming changes in values. Whoever knows that the value of a stock has run ahead of price and is likely to be sustained can buy that stock with confidence that as its value is recognized by investors, the price will rise (Dow, Charles H. Review and Outlook. Wall Street Journal. February 25, 1902.)."

This aligns with F.A. Hayek’s 1945 claim that:

“…the shipper who earns his living from using otherwise empty or half-filled journeys of tramp-steamers, or the estate agent whose whole knowledge is almost exclusively one of temporary opportunities, or the arbitrageur who gains from local differences of commodity prices, are all performing eminently useful functions based on special knowledge of circumstances of the fleeting moment not known to others.”

Our price projection for Bitcoin will be available to subscribers only.

Notes: