For some time I have been sharing this or similar chart of GOLD with many individuals and pointing out that the recent sharp move up in Gold is not a new Uptrend but rather continuation of correction or congestion following the All Time High.
Main Reasons for this is (1) we have a triangle at the base of the rally. Triangle normally only appear in Wave 4 or Wave C. as this is at the base it can only be Wave b. Both suggest that on the breakout it would be the last move in that direction. Therefore in this case the breakout to the upside could only be minor wave c that recently topped and we have been declining since. That continuation of weakness could retest the summer low in the region of 1500 round number. (2) in a large correction such as this one, we should have Momentum divergence between what might be Wave A and Wave C We do not have such divergence in the RSI hence we expect another lower low which could potentially produce such divergence. Consequently the current weakness could fulfill that requirement. If so, then we would have a new low in this congestion since all time high & it would complete Wave 4 on larger degree, setting the base from which new uptrend (Wave 5) could take place. Therefore, any reasonable retracement on smaller time frame should be opportunity to short Gold.
Комментарии
jmtbernardo
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Very good and interesting. Where did you learn to count the waves ? Do you have websites where I can read more about it ?
DanV
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This chart has played out well for the downside target of 1500 and then updated chart suggesting 1400 which was AB=CD measured move. Since then I think I will need to updated and re-publish Gold chart. Many could not contemplate the price of Gold falling 1400 at the time and it has not yet bottomed. Look out for updated chart to follow
vitael
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Dan quit from GOLD, better to close this chart
m4riovolp3
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Dan, do u expect a recovery to 157$ / 160$ in SPDR GLD Trust? Resp. in Gold to 1600/1650?
DanV
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Based on Time symmetry using GLD possible low could be mid June or later in July
DanV
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3 months ago we had identified minimum target to 1500 area, which has been met with convincing price action. So now a possible small retracement could be expected but the trend still is to the downside and also pointed out that AB=CD price symmetry in PINK suggests that we could be looking for secondary price target in due course to 1400 for the final low as shown in original chart and again in the updated chart here
m4riovolp3
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nicosxm
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Good Day Dan V , Where you expecting Gold to collapse so fast...????.... what is your sentiment at this point...???.....thanks, best, Nico
DanV
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Hi, thanks for your question. I am surprise but the recent sell off in Gold. I did not expect such a momentum. I have made few minor changes to the original chart with additional price data since publishing the chart at the outset. In the current decline from Oct 2012 high @ $1800 area we appear to have 2 Zigzag above the Long term up trendline. Upon break of the we have small decline (wave a) and small triangle ( wave b). Since then we have impulsive 5 wave down and are in minor wave (iii) in progress. Therefore I expect s a small bounce for wave iv and another decline to complete wave v and wave c overall, which could bring us to 1500 area. That could form possible bottom. However, if we are to match double zigzag above the Major up trendline above double zigzag below that trendline, then the drop from Mid Jan from 1700 level, we could have 1st abc zigzag, then I would imagine an abc retracement and another zigzag lower. That shown in GOLD could allow price to mark time to possible form Low in June or seasonally common in late July with price probing below 1500. So in summary, upon completion of wave c with internal 5 minor waves bottoming around 1500, I would look for an abc ZigZag bounce towards 1630 -1650 area and another abc ZigZag drop to the level 1480- 1500 or even 1400 if the AB=CD symmetry (shown on the chart) is to plays out. I have no qualification to justify such weakness in GOLD price. However would guess that if like most suggest Gold is an Inflation Hedge and store of value against paper "Fiat" Money, then the feared inflation might not be as serious a threat as many might have envisaged or that the "Smart Money" might be able to make better return from other assets compared with Gold. They will likely return at some stage, just don't think it will be in the next few months and will do so when GOLD is on sale after capitulation at lower level. Anyway, here is the snapshot of updated charts with these details.
nicosxm
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Thanks for your reply and chart snapshot update. as always nice work I can rely to with the same outlook.