Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
US Presidential Election Year Stock Market Seasonal Trend - 29th Nov 24
Who controls the past controls the future: who controls the present controls the past - 29th Nov 24
Gold After Trump Wins - 29th Nov 24
The AI Stocks, Housing, Inflation and Bitcoin Crypto Mega-trends - 27th Nov 24
Gold Price Ahead of the Thanksgiving Weekend - 27th Nov 24
Bitcoin Gravy Train Trend Forecast to June 2025 - 24th Nov 24
Stocks, Bitcoin and Crypto Markets Breaking Bad on Donald Trump Pump - 21st Nov 24
Gold Price To Re-Test $2,700 - 21st Nov 24
Stock Market Sentiment Speaks: This Is My Strong Warning To You - 21st Nov 24
Financial Crisis 2025 - This is Going to Shock People! - 21st Nov 24
Dubai Deluge - AI Tech Stocks Earnings Correction Opportunities - 18th Nov 24
Why President Trump Has NO Real Power - Deep State Military Industrial Complex - 8th Nov 24
Social Grant Increases and Serge Belamant Amid South Africa's New Political Landscape - 8th Nov 24
Is Forex Worth It? - 8th Nov 24
Nvidia Numero Uno in Count Down to President Donald Pump Election Victory - 5th Nov 24
Trump or Harris - Who Wins US Presidential Election 2024 Forecast Prediction - 5th Nov 24
Stock Market Brief in Count Down to US Election Result 2024 - 3rd Nov 24
Gold Stocks’ Winter Rally 2024 - 3rd Nov 24
Why Countdown to U.S. Recession is Underway - 3rd Nov 24
Stock Market Trend Forecast to Jan 2025 - 2nd Nov 24
President Donald PUMP Forecast to Win US Presidential Election 2024 - 1st Nov 24
At These Levels, Buying Silver Is Like Getting It At $5 In 2003 - 28th Oct 24
Nvidia Numero Uno Selling Shovels in the AI Gold Rush - 28th Oct 24
The Future of Online Casinos - 28th Oct 24
Panic in the Air As Stock Market Correction Delivers Deep Opps in AI Tech Stocks - 27th Oct 24
Stocks, Bitcoin, Crypto's Counting Down to President Donald Pump! - 27th Oct 24
UK Budget 2024 - What to do Before 30th Oct - Pensions and ISA's - 27th Oct 24
7 Days of Crypto Opportunities Starts NOW - 27th Oct 24
The Power Law in Venture Capital: How Visionary Investors Like Yuri Milner Have Shaped the Future - 27th Oct 24
This Points To Significantly Higher Silver Prices - 27th Oct 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Gold Price Blows Through Upside Resistance - The Chase Is On

Commodities / Gold & Silver 2020 Jul 31, 2020 - 05:23 PM GMT

By: Avi_Gilburt

Commodities

Last week, I put out an article outlining my expectation for a pullback in GLD before we head to the 200+ region. Within the comments section, I outlined my plan as to how I am going to play for a potential pullback. However, that pullback has not yet materialized.

For those that have followed me closely for years, you know that I have been heavily long physical metals and mining stocks since I started accumulating them again in 2015, after calling the top in 2011.


Moreover, the manner in which I have been playing the market since that time is to hold my long positions, and simply hedge those positions when we approach resistance points which can elicit pullbacks. And, I have outlined to the members of Elliottwavetrader how I use options to hedge my positions at those resistance points.

To date, we have caught just about every pullback over the last 5 years and I have done rather well with those options plays during that time. But, as we have progressed during this rally in the metals, I also warned my members that we would come to a point in time where the market was going to blow through the resistance at which I was attempting to hedge.

This week seems to present me with such a scenario for the first time in 5 years. GLD has now blown through the 179 region, and has made it much more likely that we are on our way towards the 200+ region in a more direct fashion.

Allow me to take a step back and explain my methodology, so you may understand why I hedged where I did.

You see, we utilize a methodology called Fibonacci Pinball within the standard Elliott Wave structure. For those that want to understand a bit more about this, you can read the background of our method in this 6-part EW Intro series I wrote some time ago.

But, the main point is that when the market provides us with a rally towards the .618-.764 extension of a wave 1-2 set up (if you review the materials above, you will better understand this reference), I expect a further i-ii structure to develop before we break out over the .764 extension. That is what occurs in the great majority of circumstances when we track bullish structures.

However, a minority of the times, the market develops as a series of 1’s and 2’s off the lows, and we then see a direct break out through the .764 extension in the heart of a 3rd wave. That seems to have been what we experienced recently in the GLD chart. Unfortunately, this is not something that I am able to foresee all the time. Clearly, I was unable to foresee this potential in GLD most recently.

But, if you noted my positioning in my disclosure, you would know that I have been quite bullish of the market for some time, and have retained my long exposure. But, as I noted, I did attempt to hedge for that potential pullback at resistance. And, the market blew through that resistance.

This now changes the parameters in the near term, but it does not change our expectation of rallying to 200+ in GLD in the coming months. But, it does seem as though many are finally taking note of gold and the chase seems to be on.

Support has now moved up from 161-66 to the 174/76 GLD region, and as long as all pullbacks now hold that support, I expect that we will head to the 190 region next, which will then raise support up to the 179 region, as we then target the 202-207 region next.

Again, for those that have followed me for years, you know that I do not view linear markets from a perspective of certainties. Rather, I approach the market as one should - based upon probabilistic analysis.

Moreover, within our methodology, we have a built-in objective standard which outlines when our primary expectation is wrong, and we are able to switch to our alternative relatively easily. In this case, the market moving through that 179 level has made it much less likely that we see any pullbacks that break below 174/76 upper support. Should we see such a break below that, then I will look at it as an opportunity. However, as it stands now, it is looking much less likely at this point in time.

Lastly, please consider this my last post on metals for quite some time, as I really do not have the time to be writing many articles on a weekly basis anymore. But, I am expecting us to rally over the 200GLD region in the coming months before we see a major bout of weakness in the complex lasting many months.

Avi Gilburt is a widely followed Elliott Wave analyst and founder of ElliottWaveTrader.net, a live trading room featuring his analysis on the S&P 500, precious metals, oil & USD, plus a team of analysts covering a range of other markets. He recently founded FATRADER.com, a live forum featuring some of the top fundamental analysts online today to showcase research and elevate discussion for traders & investors interested in fundamental rather than technical analysis.

© 2020 Copyright Avi Gilburt - 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.


© 2005-2022 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