Bob,

Thanks for your comments and questions. I’m sorry for the delay in responding.

As for the starting point, the nominal place to start a Midas S or R curve is at a price turning point, and that’s the first thing to do. But after doing that, sometimes one sees that subsequent turning points are not captured by that curve. I have found that if you move the initial starting point around until the curve captures the first major pullback in price, the new curve so generated, called a Calibrated Curve, is usually quite robust, going on to capture later very significant turning points that would otherwise not be so captured. And that’s the case here, where moving the starting point back a bit made it capture those first two close-in pullbacks in late 2007. Then, many months later, in 2008, this calibrated curve perfectly captured that pullback. So, this curve is highly significant going forward, which it why it’s so important to watch it here.

Your second observation, that changing from a weekly bars chart to a daily bars one gives you differently behaving curves, is very astute. This is indeed true. Even though one launches curves from the same turning point date, if the charts are of different timeframes – such as daily bars and weekly bars – the curves are distinctly different, and have to be treated as such. It’s quite a coincidence to be answering this question for you now, since earlier today I wrote the section of our forthcoming book which explores this very phenomenon.

Thanks again for your questions.

—David.