Gold Alt E-Wave Count: What If ...

Something about the larger e-wave count from the 2001 lows has been bothering me, esp. in conjunction with the monthly MACD.

Namely, assuming that the entire sequence from the mid-2011 peak represents a "4" wave, I cannot figure out how to subdivide the wave structure that precedes this "4" into a "1,2,3" that fits the parameters.

However, I can see how one could argue for the completion of five waves UP (see notations in blue, with lower regression waves in green).

This 5-wave count would, of course, be a very bearish scenario for $gold, and most likely take it back to the 700's. For the counter-argument, the wave structure off the Sept 2011 peak looks corrective, not impulsive.

Watching how price behaves at the 1450 level will be critical; the next lower support levels are 1300's and 1100's below that.

In the short-term, I could see a bounce to GLD 162-167, but it wont mean anything of significance.

http://stockcharts.com/c-sc/sc?s=$GOLD&p=D&yr=15&mn=0&dy=0&i=p65601856655&a=276813347&r=1356847089754.png

Edited by beta, 30 December 2012 - 01:15 AM.

Something about the larger e-wave count from the 2001 lows has been bothering me, esp. in conjunction with the monthly MACD.

Namely, assuming that the entire sequence from the mid-2011 peak represents a "4" wave, I cannot figure out how to subdivide the wave structure that precedes this "4" into a "1,2,3" that fits the parameters.

However, I can see how one could argue for the completion of five waves UP (see notations in blue, with lower regression waves in green).

This 5-wave count would, of course, be a very bearish scenario for $gold, and most likely take it back to the 700's. For the counter-argument, the wave structure off the Sept 2011 peak looks corrective, not impulsive.

Watching how price behaves at the 1450 level will be critical; the next lower support levels are 1300's and 1100's below that.

In the short-term, I could see a bounce to GLD 162-167, but it wont mean anything of significance.

http://stockcharts.com/c-sc/sc?s=$GOLD&p=D&yr=15&mn=0&dy=0&i=p65601856655&a=276813347&r=1356847089754.png

Beta:

Yes those are the issues here: http://www.traders-t...?...st&p=642221

Primary Count:(1,600 is key for me here)http://stockcharts.com/c-sc/sc?s=$GOLD&p=M&yr=20&mn=6&dy=0&i=p74112129489&a=287407986&r=397.png


Trend Lines: http://stockcharts.com/c-sc/sc?s=$GOLD&p=W&yr=13&mn=4&dy=0&i=p61240856859&a=205151058&r=1356886623026.png

stubaby

Stu,

Thank you -- I love the detailed precision of your charts ! Your annotations raise several possibilities --esp keeping in mind the non-linear scale which makes things visually misleading when viewing Stockcharts. And yes I have followed the conversation on the "Deliberations" thread below, although I note that discussion is missing the context of the bigger fractal off the 2001 secular low.

First, let me state my understanding of rule-based parameters:

1. Wave 3 should be 1.618 * Wave 1 in length, at minimum
2. Wave 5 should be 1.618 * Wave 3 in length, at minimum
3. Wave 5 should be the longest wave in price, though not duration (for commodities)
4. Wave 4 should not overlap Wave 1
5. Wave 2 and 4 should alternate in structure, and represent Fib proportions of waves 1 and 3, respectively
6. Waves of similar magnitude (hierarchy) should be proportional in time and price

The last rule is the most difficult to apply, given that e-wave fractals are composed of infinite regressions. This is what I find most difficult and confusing in sorting out wave structures.

Applying the five rules above, one possibility--the most optimistic for gold--is that the current sub-fractal off the 681 low is a Major wave 3-4 in progress. Something like this count:

wave 1: 255-1033 = 778
wave 2: 1033-681 = 352 (approx .5 Fib)
wave 3: 681-1921 = 1240 ** note this is just shy of wave 1 * 1.618 or 1258

IF the current fractal from 1921 is a wave 4, then it should complete around 1400, using an ABC structure.

That would allow for a final wave 5 move (Major) to 3406 (1400 + (1.618*1240))

Let's call this the "Major 5" e-wave count. The key question is, what conditions would confirm or invalidate this count ??

[posting to be continued later]

Edited by beta, 30 December 2012 - 02:33 PM.

Whee you gettting those rules?
HEre is another view:
http://blog.kimblech...eltestdec28.gif

Stu,

Thank you -- I love the detailed precision of your charts ! Your annotations raise several possibilities --esp keeping in mind the non-linear scale which makes things visually misleading when viewing Stockcharts. And yes I have followed the conversation on the "Deliberations" thread below, although I note that discussion is missing the context of the bigger fractal off the 2001 secular low.

First, let me state my understanding of rule-based parameters:

1. Wave 3 should be 1.618 * Wave 1 in length, at minimum
2. Wave 5 should be 1.618 * Wave 3 in length, at minimum
3. Wave 5 should be the longest wave in price, though not duration (for commodities)
4. Wave 4 should not overlap Wave 1
5. Wave 2 and 4 should alternate in structure, and represent Fib proportions of waves 1 and 3, respectively
6. Waves of similar magnitude (hierarchy) should be proportional in time and price

The last rule is the most difficult to apply, given that e-wave fractals are composed of infinite regressions. This is what I find most difficult and confusing in sorting out wave structures.

Applying the five rules above, one possibility--the most optimistic for gold--is that the current sub-fractal off the 681 low is a Major wave 3-4 in progress. Something like this count:

wave 1: 255-1033 = 778
wave 2: 1033-681 = 352 (approx .5 Fib)
wave 3: 681-1921 = 1240 ** note this is just shy of wave 1 * 1.618 or 1258

IF the current fractal from 1921 is a wave 4, then it should complete around 1400, using an ABC structure.

That would allow for a final wave 5 move (Major) to 3406 (1400 + (1.618*1240))

Let's call this the "Major 5" e-wave count. The key question is, what conditions would confirm or invalidate this count ??

[posting to be continued later]

Rules are based on Elliott wave methodology. Numerous books and online resources. I forgot to add another rule: wave 2 should not exceed more than .786 retrace of wave 1. If others disagree with these E-wave rules or use different rules, would love to hear your comments.

Edited by beta, 30 December 2012 - 06:14 PM.

dougie, thanks for posting the alt count link. The problem I see with labelling this as "1-2" is that it does not solve the question of how you subdivide the ten-year price sequence from 255-1921 into 5 (lower fractal) waves. I prefer Stu's labelling of the 1000/700 sequence as the proper "1-2."

**

Reverting to the earlier discussion, the possibilities have been narrowed to 700 or 3400 as the next IT target.

I do think 700-1100 is a real possibility IF this is the beginning of Primary II, instead of completion of Major 4/5.

The good news is that, following the end of Primary II, Primary III should take $gold back to the 3500-5000 range, but this will take 5-10 years to play out.

OTOH, if SPX stays above 1150, chances are this is a correction in a larger uptrend (Major 4/5).

GDX chart is a different story. A move under 42.5 should take this back to 26-31.

I wonder if the fundamental catalyst for a gold slide--if it happens--could be rising T-yields. TLT has risen in lockstop with $gold since 2003, but also appears to be completing an exhaustion top/5-wave move here.

What happens if/when Treasury yields reverse UP and the Great Bond Bubble bursts ? Something to keep watch on ...


http://stockcharts.c...56911492950.png

Edited by beta, 30 December 2012 - 06:57 PM.

I live the bearishness that is building

post

Edited by beta, 01 January 2013 - 03:59 PM.

In reviewing Stu's chart above, I note that he raises the possibility that the present "4" wave is of a lesser degree, i.e., minor 4 not Major 4.

I am not an expert on Elliott complex corrections, but it appears to be an ABCXYZ which would fit the rule of alternation with the Major Wave 2 in both price and duration. Either way, it's possible that the wave formation off the 1526 low is the start of a wave 5, with bullish implications.

http://stockcharts.com/c-sc/sc?s=$GOLD&p=W&yr=8&mn=0&dy=0&i=p60180145456&a=287589246&r=1357074057521.png

Edited by beta, 01 January 2013 - 04:10 PM.

Happy New Year's 2013 !!!

This is my dog Jinjer. She was rescued as a stray at four months from the streets of Guatemala. I knew JinJer was my dog instantly when I first saw her in captivity. (Unlike the other strays, she did not bark or panic, but calmly looked for an exit.)

She is half-Golden Retriever and half-Aussie sheepdog, with the sunny optimism of the first breed and the latter's alert instincts. She loves to go to Ocean Beach on weekend AMs to ponder the endless mysteries of Price, Time & Volume (**)

Dogs teach us humans many important virtues: unconditional love & compassion; how to be sincere and loyal to our fellow creatures; how to be thankful for each day's blessings.

2012 was a fabulous year ! Happy New Year wishes to all Creatures great & small --may 2013 shine upon you with grace and prosperity,

/beta
SF

(*) we are reading a new book -- Nassim Taleb's "AntiFragile: Things That Gain From Disorder"-- to sum up, Volatility Rules -- Embrace It !



http://imageshack.us...839/dog2013.jpg

Edited by beta, 01 January 2013 - 04:16 PM.