Best of the Week
Most Popular
1. The Trump Stock Market Trap May Be Triggered - Barry_M_Ferguson
2.Why are Central Banks Buying Gold and Dumping Dollars? - Richard_Mills
3.US China War - Thucydides Trap and gold - Richard_Mills
4.Gold Price Trend Forcast to End September 2019 - Nadeem_Walayat
5.Money Saving Kids Gardening Growing Giant Sunflowers Summer Fun - Anika_Walayat
6.US Dollar Breakdown Begins, Gold Price to Bolt Higher - Jim_Willie_CB
7.INTEL (INTC) Stock Investing to Profit From AI Machine Learning Boom - Nadeem_Walayat
8.Will Google AI Kill Us? Man vs Machine Intelligence - N_Walayat
9.US Prepares for Currency War with China - Richard_Mills
10.Gold Price Epochal Breakout Will Not Be Negated by a Correction - Clive Maund
Last 7 days
US Housing Market Real Terms BUY / SELL Indicator - 16th July 19
Could Trump Really Win the 2020 US Presidential Election? - 16th July 19
Gold Stocks Forming Bullish Consolidation - 16th July 19
Will Fed Easing Turn Out Like 1995 or 2007? - 16th July 19
Red Rock Entertainment Investments: Around the world in a day with Supreme Jets - 16th July 19
Silver Has Already Gone from Weak to Strong Hands - 15th July 19
Top Equity Mutual Funds That Offer Best Returns - 15th July 19
Gold’s Breakout And The US Dollar - 15th July 19
Financial Markets, Iran, U.S. Global Hegemony - 15th July 19
U.S Bond Yields Point to a 40% Rise in SPX - 15th July 19
Corporate Earnings may Surprise the Stock Market – Watch Out! - 15th July 19
Stock Market Interest Rate Cut Prevails - 15th July 19
Dow Stock Market Trend Forecast Current State July 2019 Video - 15th July 19
Why Summer is the Best Time to be in the Entertainment Industry - 15th July 19
Mid-August Is A Critical Turning Point For US Stocks - 14th July 19
Fed’s Recessionary Indicators and Gold - 14th July 19
The Problem with Keynesian Economics - 14th July 19
Stocks Market Investors Worried About the Fed? Don't Be -- Here's Why - 13th July 19
Could Gold Launch Into A Parabolic Upside Rally? - 13th July 19
Stock Market SPX and Dow in BREAKOUT but this is the worrying part - 13th July 19
Key Stage 2 SATS Tests Results Grades and Scores GDS, EXS, WTS Explained - 13th July 19
INTEL Stock Investing in Qubits and AI Neural Network Processors - Video - 12th July 19
Gold Price Selloff Risk High - 12th July 19
State of the US Economy as Laffer Gets Laughable - 12th July 19
Dow Stock Market Trend Forecast Current State - 12th July 19
Stock Market Major Index Top In 3 to 5 Weeks? - 11th July 19
Platinum Price vs Gold Price - 11th July 19
What This Centi-Billionaire Fashion Magnate Can Teach You About Investing - 11th July 19
Stock Market Fundamentals are Weakening: 3000 on SPX Means Nothing - 11th July 19
This Tobacco Stock Is a Big Winner from E-Cigarette Bans - 11th July 19
Investing in Life Extending Pharma Stocks - 11th July 19
How to Pay for It All: An Option the Presidential Candidates Missed - 11th July 19
Mining Stocks Flash Powerful Signal for Gold and Silver Markets - 11th July 19
5 Surefire Ways to Get More Viewers for Your Video Series - 11th July 19
Gold Price Gann Angle Update - 10th July 19
Crude Oil Prices and the 2019 Hurricane Season - 10th July 19
Can Gold Recover from Friday’s Strong Payrolls Hit? - 10th July 19
Netflix’s Worst Nightmare Has Come True - 10th July 19
LIMITLESS - Improving Cognitive Function and Fighting Brain Ageing Right Now! - 10th July 19
US Dollar Strength Will Drive Markets Higher - 10th July 19
Government-Pumped Student Loan Bubble Sets Up Next Financial Crisis - 10th July 19
Stock Market SPX 3000 Dream is Pushed Away: Pullback of 5-10% is Coming - 10th July 19
July 2019 GBPUSD Market Update and Outlook - 10th July 19

Market Oracle FREE Newsletter

Top AI Stocks Investing to Profit from the Machine Intelligence Mega-trend

Gold GLD and Silver SLV ETFs Forecast Updates

Commodities / Gold & Silver 2009 Dec 07, 2009 - 02:49 AM GMT

By: Piazzi

Commodities

Best Financial Markets Analysis ArticleThe last time I wrote about GLD and SLV, November 21, I said this about GLD

It may be a bit extended for new positions as it is quite a bit of distance from all of its MAs. If the current count is correct, GLD may be near the end of its Intermediate wave 3, or that wave may be extending


And

Weekly price has started a vertical ascent, which is supportive of the bullish count and the notion of an intermediate degree 3rd wave. But the vertical nature of the past few weeks, and the high volume bars, make me a bit nervous that we may have a buyer exhaustion setting in soon.

And this about both metals

I’d rather be cautious and try to protect what I might have built in for now.

That was two week ago. At the time SLV was at 18.22, and GLD was at 112.94. Since then, SLV rose to an intraday high of 19.11 and GLD to an intraday high of 119.54. This Friday, SLV closed at 18.15, and GLD at 113.75. In the same post, I said that I had a target of 116.50 for GLD and 19.20 for SLV

So, it seems like it was not bad thing to avoid new positions, to take care of existing positions, and to have some well-calculated target areas in mind as our guides.

We did all that by just following our charts, applying finely tuned technical measures, and mainly ignoring expert opinions offered by main stream financial media. The past is the past. We gladly take credit for a job well done. We move on, and ask the only relevant question:

What about now?

This is a daily chart of GLD

Look at the volume on Friday. You probably have heard many stories. Like dollar’s on the rise. FED is about to drain liquidity. Job numbers were good,. ETC, ETC. They all may be right or not, relevant or not. Still, not many told us that we had a wave structure that looked about complete. We had an issue that looked seriously extended on daily and weekly frames. We had everybody talking about precious metals and currency problems. Not many told us that we had a situation where PM miners were not doing all that much better than gold.  I do believe that in a healthy commodity environment, the commodity producers should do better than the commodity itself. And by that I mean broadly across the group.

GLD may very well have entered a correction that might lead to a trend change. If the overall structure of the above count is correct, we may have seen the end of Intermediate wave 3. Only a new high would invalidate that possibility.

To the downside, only an overlap with the Intermediate wave 1 (purple) would put the current count under suspicion. Those are very poor trade parameters because they cover a wide range from 95 to 120. Not only that, shorting GLD now, exposes the shorter to some 8-10% risk before the tightest stop is hit.

Still, operating within the premises of the current count, and assuming that we have seen the end of Intermediate wave 3, if I wanted to narrow things a little, I could argue that due to the strength of the Minor wave 5 of Intermediate wave 3, we have a good probability for the correction to be at most limited to the area of Minor wave 4, that is, 101-104. That would be about 50-62% retracement of Intermediate wave 3.

GLD hit a high of 119+ which comes close to 2.62 * Intermediate wave 1.

Timewise, Intermediate 3 took 1.62 * the time taken for Intermediate 1 + Intermediate 2. If I project a 2.62 extension of the time of Intermediate 1 + Intermediate 2, it will give sometime early in March, 2010. That time frame corresponds with a seasonal period of strength that runs from March to July.

So, there it is, my first crack at projecting things assuming that

  1. My overall count is correct
  2. We have seen the end of Intermediate wave 3

I have seen bearish wave counts for gold that argue that the advance since the lows of 2008 is a wave B up – to be followed by a wave C down type of crash.

That would make a hell of a wave B. Maybe they are right, but it just doesn’t cut it for me right now.

It doesn’t matter, really. They expect a crash, I expect a correction, so, if either party is right, we should see lower prices, we’ll then re-evaluate as waves unfold.

This is a weekly with both my counts and the bullish one being the preferred count

Some of you may remember when I was talking about the triangular range around 95, and the breakout to the upside. Then we started talking about a possible Inv H&S  and we were saying that if gold wanted to go, it just had to go, no dilly-dally, if-but-maybe-this-maybe-that;  just break out on good volume and go, and it did that.

And that, to me, is the essence of market participation. One sees a setup, defines one’s conditions and parameters, and acts.

Now the 100 level on GLD, or 1000 on gold is a must hold. But, before that, we have the top of Intermediate wave 1 (purple) that should ideally not be overlapped if my preferred count is correct
--------------------------------------------------------------

For SLV My target prices did very well. Because silver did not have the vertical ascent of gold, I lasted a bit longer before taking whatever defensive measures I deemed necessary.

  This is a daily chart of SLV

Same story as gold. It looks done, or almost done, and if the count is correct, a correction to the area of minor wave 4 (16 – 17.5) is a likely target at this point.

I need to remind you that even if we have topped, we are so early that I am just doing ballparks.

Silver’s high point came at Intermediate 3 = 1.62 * intermediate 1.

It took intermediate 3 about 1.62 * time taken for (Intermediate 1 + Intermediate 2), and if I project an Intermediate 4 at 2.62 * (Intermediate 1 + Intermediate 2), It gives me end of February 2010, which is basically the same as what I projected for gold.

Once again, all targets and projections are theoretical. For price projections, it is an area that I seek not a pin point, and for time projections, it is a period that I seek and not the exact second of some big bang event.

So far, Gold has been a leader, and that, IMO, is not a very desirable situation to have for a long lasting PM bull environment. Maybe things have changed. But I still think that in a good PM environment those with more leverage to the price of the metal should lead. So if my count is correct and there is a major wave 3 and an Intermediate wave 3 to come, at so point miners, especially the juniors, should do very, very well. So, keep an eye on the performance of seniors versus gold, and juniors versus seniors.

Also, if this thing is for real, silver may do a lot better in terms of performance as the PM bull ages.

This is a weekly chart of SLV

What happened on Friday served as a reminder of what I always say to keep myself alert:

The doors of crowded places are narrow and few.

Have a Nice Day!

By Piazzi

http://markettime.blogspot.com/

I am a self taught market participant with more than 12 years of managing my own money. My main approach is to study macro level conditions affecting the markets, and then use technical analysis to either find opportunities or stay out of trouble. Staying out of trouble (a.k.a Loss) is more important to me than making profits. In addition to my self studies of the markets, I have studied Objective Elliott Wave (OEW) under tutorship of Tony Caldaro.

© 2009 Copyright Piazzi - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules