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
The Central Bank Time Machine - 23rd Aug 19
Stock Market August Breakdown Prediction and Analysis - 23rd Aug 19
U.S. To “Drown The World” In Oil - 23rd Aug 19
Modern Monetary Theory Could Destroy America - 23rd Aug 19
Seven Key Words That Explain "Stupidly High" Bond Market Prices - 23rd Aug 19
Is the Fed Too Late Prevent A US Housing Bear Market? - 23rd Aug 19
Manchester Airport FREE Drop Off Area Service at JetParks 1 - Video - 23rd Aug 19
Gold Price Trend Validation - 22nd Aug 19
Economist Lays Out the Next Step to Wonderland for the Fed - 22nd Aug 19
GCSE Exam Results Day Shock! How to Get 9 A*'s Grade 9's in England and Maths - 22nd Aug 19
KEY WEEK FOR US MARKETS, GOLD, AND OIL - Audio Analysis - 22nd Aug 19
USD/JPY, USD/CHF, GBP/USD Currency Pairs to Watch Prior to FOMC Minutes and Jackson Hole - 22nd Aug 19
Fed Too Late To Prevent US Real Estate Market Crash? - 22nd Aug 19
Retail Sector Isn’t Dead. It’s Growing and Pays 6%+ Dividends - 22nd Aug 19
FREE Access EWI's Financial Market Forecasting Service - 22nd Aug 19
Benefits of Acrobits Softphone - 22nd Aug 19
How to Protect Your Site from Bots & Spam? - 21st Aug 19
Fed Too Late To Prevent A US Housing Market Crash? - 21st Aug 19
Gold and the Cracks in the U.S., Japan and Germany’s Economic Data - 21st Aug 19
The Gold Rush of 2019 - 21st Aug 19
How to Play Interest Rates in US Real Estate - 21st Aug 19
Stocks Likely to Breakout Instead of Gold - 21st Aug 19
Top 6 Tips to Attract Followers On SoundCloud - 21st Aug 19
Holiday Nightmares - Your Caravan is Missing! - 21st Aug 19
UK House Building and House Prices Trend Forecast - 20th Aug 19
The Next Stock Market Breakdown And The Setup - 20th Aug 19
5 Ways to Save by Using a Mortgage Broker - 20th Aug 19
Is This Time Different? Predictive Power of the Yield Curve and Gold - 19th Aug 19
New Dawn for the iGaming Industry in the United States - 19th Aug 19
Gold Set to Correct but Internals Remain Bullish - 19th Aug 19
Stock Market Correction Continues - 19th Aug 19
The Number One Gold Stock Of 2019 - 19th Aug 19
The State of the Financial Union - 18th Aug 19
The Nuts and Bolts: Yield Inversion Says Recession is Coming But it May take 24 months - 18th Aug 19
Markets August 19 Turn Date is Tomorrow – Are You Ready? - 18th Aug 19
JOHNSON AND JOHNSON - JNJ for Life Extension Pharma Stocks Investing - 17th Aug 19
Negative Bond Market Yields Tell A Story Of Shifting Economic Stock Market Leadership - 17th Aug 19
Is Stock Market About to Crash? Three Charts That Suggest It’s Possible - 17th Aug 19
It’s Time For Colombia To Dump The Peso - 17th Aug 19
Gold & Silver Stand Strong amid Stock Volatility & Falling Rates - 16th Aug 19
Gold Mining Stocks Q2’19 Fundamentals - 16th Aug 19
Silver, Transports, and Dow Jones Index At Targets – What Direct Next? - 16th Aug 19
When the US Bond Market Bubble Blows Up! - 16th Aug 19
Dark days are closing in on Apple - 16th Aug 19
Precious Metals Gone Wild! Reaching Initial Targets – Now What’s Next - 16th Aug 19
US Government Is Beholden To The Fed; And Vice-Versa - 15th Aug 19
GBP vs USD Forex Pair Swings Into Focus Amid Brexit Chaos - 15th Aug 19
US Negative Interest Rates Go Mainstream - With Some Glaring Omissions - 15th Aug 19
US Stock Market Could Fall 12% to 25% - 15th Aug 19
A Level Exam Results School Live Reaction Shock 2019! - 15th Aug 19
It's Time to Get Serious about Silver - 15th Aug 19
The EagleFX Beginners Guide – Financial Markets - 15th Aug 19

Market Oracle FREE Newsletter

The No 1 Gold Stock for 2019

Gold Bull or Bear?

Commodities / Gold and Silver 2011 Dec 19, 2011 - 09:37 AM GMT

By: Tony_Caldaro


Best Financial Markets Analysis ArticleGold did something this week it had not done in three years, and had done only twice before since the bull market began in 2001. It completely retraced an entire uptrend. Amazing as that should sound, and it is, as I have never seen this kind of bullish action ever before, there is one potential bearish implication. While 2011 has been a difficult year for the equity markets with a lot of volatility and uncertainly. Gold has just thrown its OEW count into the same ring of fire. Tough year!

After kicking this event around in the OEW forum with several in our group, who closely monitor and trade Gold, we arrived with four potential long term counts. Three are bullish and one is bearish. Presenting the four possible counts, in no order of preference, to allow the reader to make their own determination.

The first count is a slight internal deviation from what we had been expecting for 2011: a Major wave 3 high and a significant Major wave 4 selloff. This count was presented by Patrick in the US, who has done an excellent job in tracking the precious metals. Major wave 4 support, under this scenario, is in the range of the previous downtrends lows and the Intermediate wave iii high: $1463 to $1559. We have this support band posted the daily Gold chart. Gold hit $1563 on thursday. Once this downtrend concludes Gold should enter a 2-3 year Major wave 5 advance. Taking it to our long term target of $3750. This is a popular count.

The second count, both Patrick and I are concerned about. This count suggests the bull market in Gold is over. We can see five completed waves from the 2008 low. Just like we observed from the 2001 and 2004 lows. At $1923 Primary wave V has nearly a perfect 1.618 fibonacci relationship to Primary waves I through III. The recent uptrend, to $1804, was the first one that failed to reach an overbought condition on the weekly RSI in the entire 10 year bull market. Also, the $1923 high displays the highest weekly MACD since 2001 as well. It will take quite a selloff to confirm this scenario. But it is one everyone Gold investor should take into account. This is a popular count.

The third count is offered by Nick in Sweden. Nick suggests the Gold bull market may be tracking the traditional ABC commodity pattern. As you are aware nearly all commodities, in both bull and bear markets, unfold in ABC patterns. Currencies as well. This is the reason they are difficult to track with the traditional EW approach. Since OEW quantifies waves we have clearly seen these ABC patterns unfold for decades. Under this scenario the first level of support is currently near the $1470 area, and the next level is around $1200. Have not seen this count anywhere.

The fourth count is super bullish long term, but not so medium term. This suggests the recent $1923 high only ended Major wave 1 of Primary wave V. Again, support for Major wave 2 would be in the $1200-$1470 range. Have not observed this count anywhere either.

That’s it. Four potential long term counts with three bullish patterns, and one bearish. Medium term we additional downside risk into the $1463 to $1559 support zone. Typically Gold takes about two months to correct, which suggest a low next month. Then, during the next uptrend we can start eliminating some of these potential counts. One last note. Should either the FED, or the ECB, start a Quantitative Easing program this would be quite bullish for Gold. Review the four counts and decide for yourself which one fits your own investment objectives.


After about 40 years of investing in the markets one learns that the markets are constantly changing, not only in price, but in what drives the markets. In the 1960s, the Nifty Fifty were the leaders of the stock market. In the 1970s, stock selection using Technical Analysis was important, as the market stayed with a trading range for the entire decade. In the 1980s, the market finally broke out of it doldrums, as the DOW broke through 1100 in 1982, and launched the greatest bull market on record. 

Sharing is an important aspect of a life. Over 100 people have joined our group, from all walks of life, covering twenty three countries across the globe. It's been the most fun I have ever had in the market. Sharing uncommon knowledge, with investors. In hope of aiding them in finding their financial independence.

Copyright © 2011 Tony Caldaro - 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 - 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