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
Time to take the RED Pill - 28th May 24
US Economy Slowing Slipping into Recession, But Not There Yet - 28th May 24
Gold vs. Silver – Very Important Medium-term Signal - 28th May 24
Is Gold Price Heading to $2,275 - 2,280? - 28th May 24
Stocks Bull Market Smoking Gun - 25th May 24
Congress Moves against Totalitarian Central Bank Digital Currency Schemes - 25th May 24
Government Tinkering With Prices Is Like Hiding All of the Street Signs - 25th May 24
Gold Mid Tier Mining Stocks Fundamentals - 25th May 24
Why US Interest Rates are a Nothing Burger - 24th May 24
Big Banks Are Pressuring The Fed To Losen Protection For Depositors - 24th May 24
Another Bank Failure: How to Tell if Your Bank is At Risk - 24th May 24
AI Stocks Portfolio and Tesla - 23rd May 24
All That Glitters Isn't Gold: Silver Has Outperformed Gold During This Gold Bull Run - 23rd May 24
Gold and Silver Expose Stock Market’s Phony Gains - 23rd May 24
S&P 500 Cyclical Relative Performance: Stocks Nearing Fully Valued - 23rd May 24
Nvidia NVDA Stock Earnings Rumble After Hours - 22nd May 24
Stock Market Trend Forecasts for 2024 and 2025 - 21st May 24
Silver Price Forecast: Trumpeting the Jubilee | Sovereign Debt Defaults - 21st May 24
Bitcoin Bull Market Bubble MANIA Rug Pulls 2024! - 19th May 24
Important Economic And Geopolitical Questions And Their Answers! - 19th May 24
Pakistan UN Ambassador Grows Some Balls Accuses Israel of Being Like Nazi Germany - 19th May 24
Could We See $27,000 Gold? - 19th May 24
Gold Mining Stocks Fundamentals - 19th May 24
The Gold and Silver Ship Will Set Sail! - 19th May 24
Micro Strategy Bubble Mania - 10th May 24
Biden's Bureau of Labor Statistics is Cooking Jobs Reports - 10th May 24
Bitcoin Price Swings Analysis - 9th May 24
Could Chinese Gold Be the Straw That Breaks the Dollar's Back? - 9th May 24
The Federal Reserve Is Broke! - 9th May 24
The Elliott Wave Crash Course - 9th May 24
Psychologically Prepared for Bitcoin Bull Market Bubble MANIA Rug Pull Corrections 2024 - 8th May 24
Why You Should Pay Attention to This Time-Tested Stock Market Indicator Now - 8th May 24
Copper: The India Factor - 8th May 24
Gold 2008 and 2022 All Over Again? Stocks, USDX - 8th May 24
Holocaust Survivor States Israel is Like Nazi Germany, The Fourth Reich - 8th May 24
Fourth Reich Invades Rafah Concentration Camp To Kill Palestinian Children - 8th May 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Elliott Wave Analysis of Gold - A Word of Caution for Gold Bulls

Commodities / Elliott Wave Theory Apr 20, 2007 - 01:46 AM GMT

By: Nadeem_Walayat

Commodities

Gold in recent days has flirted with resistance above $690, currently having retraced from the initial attempts at a breakout higher.

From time to time, so as not to get suckered into a wrong analysis or wave count of a market based on relying too much on ongoing 'updated' analysis. I like to take a fresh chart of a market, in this case of Gold, and see what actually stands out clearly at this point in time, a Fresh view so to speak.

What is the 'Fresh' current chart of Gold telling us, especially in terms elliott wave analysis ?


A. The first thing that stands out is that the $733 peak in May 2006 marked a significant peak, a 5th wave peak. So I can mark that peak as a 5 on the chart.

B. The subsquent price action resembles a correction, and in elliott wave terms, a correction is comprised of 3 waves, A, B, C. Again this is perfectly clear on the chart. And thus I denote ABC. So far this is going well. Especially when I note that C is higher than A, which is a sign of strength !

C. Now this part of the chart brings us into the present. What do you see ? I see 4 clear waves, 1, 2, 3,4. So that count is entered onto the Gold chart.

D. The Present ! - What follows a 4 is a 5, which implies that the current wave up is a 5th wave. Now this is where things get a little tricky. Gold has breached the Peak of Wave 3, so it could make a weak 5th peak anytime soon. This would be taken as very weak price action. And imply a larger correction is expected, much larger than which usually follows minor wave 5 counts. Therefore Gold must continue higher virtually immediately to and beyond 733 BEFORE correcting.

So taking a fresh look at gold, has resulted with a warning to perma gold bugs, that if Gold does not manage to extend the size of the current 5th wave rally to beyond 733, then the ensuring correction is likely to be pretty severe.

So how would one actually trade this market ?

1. LONG - With a tight stop, i.e. under the last weeks low, 675 and rising under each previous weeks low going forward.

2. SHORT - On a reversal trigger, one of the best triggers are off of SAR's (Stop and Reverse), therefore a break of the Long stop at 675, with a stop over the high, currently 696.

For expert analysis of elliott wave counts on a range of financial markets, make sure to take advantage of Free Access to Elliott Wave Internationals Financial Forecasts between 18th April 07 and 25th April 07.

 

By Nadeem Walayat
(c) MarketOracle.co.uk 2007

The Market Oracle is a FREE Daily Financial Markets Forecasting & Analysis online publication. We aim to cut through the noise cluttering traditional sources of market analysis and get to the key points of where the markets are at and where they are expected to move to next ! http://www.marketoracle.co.uk

This article maybe reproduced if reprinted in its entirety with links to http://www.marketoracle.co.uk

Disclaimer - This article is provided for general information purposes only and not a solicitation or recommendation to enter into any market position, and you are reminded to seek independent professional advice before entering into any investments or trading positions.


© 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