Four Pillars Finance Newsletter

Issue #111 (7 March 2011)Hello everybody.The markets we cover are coming close to important junctures.So far most cycles we use appear to be on track.Let's have a closer look.Here is the FPF prediction chart for the Nasdaq in 2011.

(Predictive chart made with FPF 1.1 software, available athttp://www.fourpillars.net/finance/fpf.php

)

Nasdaq

Current level: 2785

The Nasdaq has continued upwards in the first weeks of the Metal months, but suddenly turned down last week.This is not unusual and also happened in the previous Metal months period last year (see chart).I don't think this correction is over.Potential targets are 2450 by the early April, or 2550 in May-June if we get a milder decline.If the two year old uptrend channel gets broken, then I would look for 2100.So, staying out and waiting for better buying opportunities down the road.Here is our updated prediction chart for NasdaqThe momentum indicator still shows major divergence.

Gold

Current level for XAU index: 216

Gold stocks made a bottom at 195, just above our target at 190.The gold market starts looking a bit healthier, as silver is leading the market now.But still the gold stocks go on lagging well below their recent highs, while the price of gold and silver has made new highsin the recent days.Of course there can be good reasons for that. If mining costs rise faster than the price of the mined product, then manymining companies' profits may actually decline or stagnate despite a rising price for gold and silver.That could explain why their stock prices lag.Earth months bottom period is over, so we look for further gains.But this market must stay above 195-200 to keep its current long term uptrend intact.So that's where I want to put my stop loss.We issued a tweet on Feb 8 to buy gold because Earth months are over.We only publish this free newsletter every 4 to 6 weeks.But you can follow us on Twitter if you want to receive some short updates and charts.http://twitter.com/lunatictrader1 Here is the current chart for XAU: