Best of the Week
Most Popular
1.Is the Stocks Bull Market Over? Dow Trend Forecast into End January 2015 - Nadeem_Walayat
2.Gold and Silver Stocks Apocalypse Now, Bear Market Review - Rambus_Chartology
3.NHS Baldrick Plan to Spread Ebola Across UK - Sheffield, Newcastle, Liverpool, London Hospitals - Nadeem_Walayat
4.Ebola Terror Threat Suicide Bio-Weapons Threatens Multiple 9/11's, Global Plague - Nadeem_Walayat
5.Second-Richest Man Says Mortgages Now a "No Brainer" - Dr. Steve Sjuggerud
6.Gold And Silver Still No End In Sight - Michael_Noonan
7.NHS Baldrick Plan to Spread Ebola Across UK - Sheffield, Newcastle, Liverpool, London Hospitals - Nadeem_Walayat
8.The Gold Bug is Set to Bite Back - EWI
9.How Alibaba Could Capitalize on the EBay-PayPal Split - Frank_Holmes
10.The Consequences of the Economic Peace - John_Mauldin
Last 5 days
Bullish Silver Stealth Buying - 24th Oct 14
Blood in the Streets to Create the Gold Stocks Investor Opportunity of the Decade - 24th Oct 14
Swiss ‘Yes’ and ‘No’ Gold Initiative Campaigns Compete at Launches in Bern - 24th Oct 14
War And The Law Of Unintended Consequences - 24th Oct 14
Tesco Meltdown Debt Default Risk Could Trigger a Financial Crisis in Early 2015 - 24th Oct 14
Saudi Move to Cut Oil Prices Is Now Russia's Biggest Economic Threat - 24th Oct 14
US Stock Market Top Is Now In Sight - 24th Oct 14
New Profit Points in the Shifting Balance of Power, Welcome to Saudi America - 24th Oct 14
QE Failure & Folly Of Paper Mache, Treasury Bond Integrated Lifeline Patches - 24th Oct 14
U.S. Economy Faltering Momentum, Debt and Asset Bubbles - 23rd Oct 14
Annuities - Afraid Your Money Will Vanish before You Do? - 23rd Oct 14
What Debt Deleveraging? - 23rd Oct 14
How to Profit from Massive Spin-Offs with Just One Play - 23rd Oct 14
Evaluating Ebola as a Biological Weapon - 23rd Oct 14
Euro, USD, Gold and Stocks According to Chartology - 23rd Oct 14
Why You Should Always Be Invested in the Stock Market (Even Now) - 23rd Oct 14
Five U.S. Housing Market Warning Signs Point to Real Estate Market Downturn - 23rd Oct 14
The Better Short: Gold or Silver? - 23rd Oct 14
Focus on Graphite Companies with Green Energy and Technology Strategies - 22nd Oct 14
Crude Oil Price Hitting Bottom - 22nd Oct 14
Evidence of Another Even More Sweeping U.S. Housing Market Bust Already Starting to Appear - 22nd Oct 14
Gold Or Crushing Paper Debt Stocks Crash? - 22nd Oct 14
India Gold Demand Surges 450% and Bank of Russia Demand At 15 Year High - 22nd Oct 14
Bitcoin Stock Exchange Could Be "More Valuable than Alibaba" - 22nd Oct 14
Currency War - How to Profit from a Stronger U.S. Dollar - 22nd Oct 14
Banks Hold Treasuries and Make Loans- 22nd Oct 14
Gold and Silver Timing is Everything - 22nd Oct 14
Don't Get Ruined by These 10 Popular Investment Myths (Part VII) - 22nd Oct 14
Follow the Baby Boom to Biotech Stock Profits - 22nd Oct 14
Copper, Nickel and Zinc Won't Be Cheap for Long - 22nd Oct 14
How Will We Know That the Gold & Silver Price Bottom Is In? - 21st Oct 14
Is Gold as Dead as Florida Hurricanes? - 21st Oct 14
First Swiss Gold Poll Shows Pro-Gold Side In Lead At 45% - 21st Oct 14
The Similarities Between Germany and China - 21st Oct 14
The REAL Reason Why the Stock Market Turned Down - 21st Oct 14
Petrobras is a 'Scheme, Not a Stock' - 21st Oct 14
Stocks Bear Market Indicator Is Off the Mark - 20th Oct 14
Stock Market Ideal Turning Point is at Hand - 20th Oct 14
Investors Quit Complaining, The Environment is Perfect Right Now - 20th Oct 14
Ebola Armageddon Could Trigger a Rebirth in Gold and Silver Prices - 20th Oct 14
Gold vs Euro Risk Due To Possible Return of Italian Lira - Drachmas, Escudos, Pesetas and Punts? - 20th Oct 14
Stocks Rebounded Following Recent Sell-Off, But Will It Last? - 20th Oct 14
U.S. Responsible for West Africa Ebola Outbreak Says Liberian Scientist - 20th Oct 14
Stock Market Intermediate B Wave has Started - 20th Oct 14
Gold Stocks Analysis – FNV, CG, NCM, SBM - 19th Oct 14
Stock Market Primary IV Wave Counter Trend Rally - 19th Oct 14
Gold And Silver - Financial World: House Of Cards Built On Sand - 18th Oct 14
Anatomy of a Stock Market Sell-Off - 18th Oct 14
Why OPEC Has Declared an Oil War on Russia - 18th Oct 14
Gold and Silver Extreme Shorting Peaks - 18th Oct 14
Bitcoin Price Fall to $350? - 18th Oct 14
Tesco Supermarket Crisis Worse To Come as Customers Vanish! - 18th Oct 14

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

Stocks Epic Bear Market

Gold Price Could Go to $700 or $3000

Commodities / Gold and Silver 2013 Jun 24, 2013 - 03:36 PM GMT

By: WavePatternTraders

Commodities

That's the question that Gold traders and investors are asking themselves.

Gold has now reached a climax point that long term traders get to really find out if Gold is still in a bull market or finally in a long term bear market.

No matter how you look at it, Gold has been in a bear market for the past few years, whilst long term you could argue its still in an up trend, I think the decision about the direction of Gold being in a long term bull trend is about to be decided shortly.


In my opinion Gold going to $700 or $3000 will come from this area $1250-1300.

Let's face it, unless you have been living under a rock or something the funnymental guys have been completely ripped apart in their thesis that printing money equals Gold going higher.

But rather than face the choice of exiting long side positions at a loss they have made the classic trade mistake of adding to positions and doubling down, (trading mistake 101) and then praying that their thesis eventually works out, so much for the funnymentals, then rather admit they got it wrong, they come out with the Gold conspiracy stories about the bank cartels smashing it lower.

I am not suggesting there is not any corruption in the markets, but the fact that we trade price is all we need to know, as no matter if a market goes up or down, the trader/investor that understands this concept can take advantage of the markets.

Even if being short is a hedge against your physical long positions, it's got to be better than trying to talk a market higher and following a bunch of gold investors that have been caught long and big time loosing $$. Patterns will help decide entry and exits points in a market, NOT the funnymentals.

I think it's about time Gold bulls owned up to the fact they got their thesis wrong.

But I know they won't ever admit that, as that's going against any fundamental principle.

The dark side of technical analysis is always wrong? Or is it?

I hope readers of this article finally see the light and come over to the dark side and use technical analysis for your trading and investing, the fundamentals have no part in my trading ideas and nether should it be in yours.

Up or down it really should not make any difference, as long as you have access to take advantage of price action, making $$ is the basic concept of why we trade.

Getting back to the ideas.

Bull Case

The market needs to make a stand here and the bulls need to step up, or the market is in serious trouble and the long term trend is about to be confirmed as being broken.

I was initially looking for a pullback to around the $1500-1550 area, but that "take down" or whatever it was called, clearly decided that there was something else on the agenda. As I suspected it was in wave 4, as soon as the market broke down under $1550, the 38.2% retracement came into focus around $1450, but the market could not stop there as the selling exacerbated and it now sits at a point where this "supposed" wave 4 needs to stop and reverse.

The ideal target pullback for a 4th wave is a 38.2% retracement of wave 3, so that's around the $1450, but the fact it's now hitting the 50% retracement of wave 3, its now at the limits of what I consider of an acceptable 4th wave.

The book says wave 4 should not overlap with the top of wave 1, so technically that could come back to test the 2008 highs around $1040, but I don't consider the market to be in a 4th wave when it tends to exceeds more than 50% of a 3rd wave. So that area is $1300, which is why this area is important.

A breakdown or even failure to get back above $1400, would suggest the market is in serious trouble and the bull market is dead and targets of sub $1000 towards $700 will be seen over the coming months/years.

So far it's a 3 wave decline which is ok for now for the bull case, but if this area around $1300 does not hold, then it's likely to see much much lower and I am looking for well under $1000, so another 40-50% from current levels, if the bear case gets confirmed.

Bear Case

The bear case suggests the market is about to start to accelerate lower in what Elliotticians call a "3rd of 3rd", so we are unlikely to see a strong break above $1400-1425 and any bounce will be corrective and more downside is expected.

The good point the bears have is price has tried on a few occasions to get above $1425 and failed and whilst its under that area the bears are clearly in control, whilst the market can see small bounces and even potentially back test of $1425, the technical's are suggesting the trend is strong and likely to move lower.

The fact that we have not seen a strong reversal is not a good sign for the bulls.

Both ideas really suggest a bounce from the current levels as it appears short term there is a triangle, which I suspect it's a 4th wave of either idea, so the next bounce will confirm which idea long term traders need to be following.

I will say no matter what your bias is, price is the final arbiter and traders and investors that fail to respect that will be the ones getting hurt. If they have not been run over already.

As for me, I simply trade what I see, it's very easy if you remain biased to what price action suggests.

No need for any funnymentals just price and patterns.

Elliott Wave in the right makes sense

Until next time

Have a profitable week ahead.

Click here to become a member

You can also follow us on twitter

What do we offer?

Short and long term analysis on US and European markets, various major FX pairs, commodities from Gold and silver to markets like natural gas.

Daily analysis on where I think the market is going with key support and resistance areas, we move and adjust as the market adjusts.

A chat room where members can discuss ideas with me or other members.

Members get to know who is moving the markets in the S&P pits*

*I have permission to post comments from the audio I hear from the S&P pits.

If you looking for quality analysis from someone that actually looks at multiple charts and works hard at providing members information to stay on the right side of the trends and making $$$, why not give the site a trial.

If any of the readers want to see this article in a PDF format.

Please send an e-mail to Enquires@wavepatterntraders.com

Please put in the header PDF, or make it known that you want to be added to the mailing list for any future articles.

Or if you have any questions about becoming a member, please use the email address above.

If you like what you see, or want to see more of my work, then please sign up for the 4 week trial.

This article is just a small portion of the markets I follow.

I cover many markets, from FX to US equities, right the way through to commodities.

If I have the data I am more than willing to offer requests to members.

Currently new members can sign up for a 4 week free trial to test drive the site, and see if my work can help in your trading and if it meets your requirements.

If you don't like what you see, then drop me an email within the 1st 4 weeks from when you join, and ask for a no questions refund.

You simply have nothing to lose.

By Jason Soni AKA Nouf

© 2013 Copyright Jason Soni AKA Nouf - 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.

WavePatternTraders Archive

© 2005-2014 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

Free Report - Financial Markets 2014