Long-term in the HUI and XAU

That is a very pretty chart, and the XAU is much the same. At the beginning of 2002 and halfway through 2003 gold stocks broke higher out of consolidations. Now it's happened again -- nice trading, those of you who bought recently when the HUI was 20% or 30% lower.

To break out and then go back down and test that upper trendline is common action, and we're messing around in the present area. I would think we'd get some scary market action for the bulls here, without too much actual decline on the charts -- shake out some of the latecoming bulls and put some doubt on the bullish case.

Gold is acting strong even with good Dollar strength this month, and to me this is very bullish. I didn't think we were going to get this move up so soon, and for now I imagine surprises will be on the upside.

Best,

Doug

Doug: that chart also supports a fake out D up with a E down to come as a possibility. we are closing just above your line but that matter slittle yet unless we see soe hard up here which I doubt...so, if we get some more down inside of that, one has to wonder: should I sell as it could be that dreaded E, or is a fake out with the BO about to come?

that chart also supports a fake out D up with a E down to come as a possibility. we are closing just above your line but that matter slittle yet unless we see soe hard up here which I doubt...so, if we get some more down inside of that, one has to wonder: should I sell as it could be that dreaded E, or is a fake out with the BO about to come?

Dougie, I have thought of that so, so much -- the "fake-out" D. And there is risk here -- yes, it could be a "bull trap," or "false breakout," etc. The public has woken up (to some extent) to gold, and so this stuff bears thinking about.

"D" would already be almost exactly as long as "B," here, and D's normally are shorter, so that makes me doubt the ABCDE in progress count, for now. The indicators I watch look similar to the May-October period in 2004, so I don't know what the heck....

From the May 2005 low, I think the HUI looks decent for 123.. -- with 1 and 2 being done at the July low, and then 1 of 3 and 2 of 3 being complete at the late August low. So, we'd be going up in 3 of 3 now.

This could also be 3 of C, within the still-possible triangle. If all we do is finish up the move from this year's low in an overall three-wave pattern, and turn back down, then it could be in "E."

In months past, due to what I perceived as a bull move in the US Dollar, I doubted gold's bullishess, but now the chart action has forced me to reconsider. Long-term, even if we have that E wave to come, after that gold and the mining stocks should roar, so waiting around until one sees the "perfect" Elliott Wave count/low-risk situation may be fruitless. Either sooner or later, in my opinion, this bad boy is going to do that Blast Off.

For now, I think the question is are we making three waves up from May 2005, or five?

Best,

Doug

Doug wrote, Gold is acting strong even with good Dollar strength this month, and to me this is very bullish. I didn't think we were going to get this move up so soon, and for now I imagine surprises will be on the upside. Hi Doug, Nice chart, thanks. You touched on something that's key and that's the divergence that occurred - being both the dollar and gold gaining, rather than moving in opposite directions. This is HUGE bullish. best, rono

Hey Rono,

Agreed -- and I think that the bullish charts are more important than the Commercials' short position in gold futures, which heretofore seemed to affect the market to a greater extent.

I sure wish I knew where the US Dollar was going. At this point I'd bet on a continuing rally, but still in the context of an overall bear market, with lots more severe weakness to come. If and when that decline resumes, the yellow metal ought to give us Dougie's Blast Off.

Doug

the thing that keeps bothering me is that the US dollar index looks like it is now going into a C wave up from an ABC corrective wave up... i wish this dollar rally would get over with.. all i know is that once the dollar resumes its long term slide... THAT will be when gold really goes to the moon

Tradesurfer:  i wish this dollar rally would get over with..

all i know is that once the dollar resumes its long term slide...

THAT will be when gold really goes to the moon

Ha! Me too, Tradesurfer -- darn this blastedly strengthening Dollar!

I wonder, though -- I thought that was the main thing, and that as long as the Dollar was going up, Gold would be in a correction. That was the case, and then it wasn't the case, and now (maybe) it's the case again.

It's been quite a few months now since the Dollar's bottom, and maybe too many people are thinking like you and me, and waiting for "the" buying opportunity in gold and mining stocks.

Best,

Doug

Hi Doug,

Here are some comments re: The USD and Gold.

Gold Bull Stage Two

cheers,

john

PS, Looking at the chart below, gold looks pretty toppy ie. it is way above the 20 day MA.

hard not to be bullish the minor stocks if you just enjoyed the ride up. even harder to get long if you missed this ride up. All things are pointing up until proven otterwise, trade them buys if you see them!

Hey Rono,

Agreed -- and I think that the bullish charts are more important than the Commercials' short position in gold futures, which heretofore seemed to affect the market to a greater extent.

I sure wish I knew where the US Dollar was going.  At this point I'd bet on a continuing rally, but still in the context of an overall bear market, with lots more severe weakness to come.  If and when that decline resumes, the yellow metal ought to give us Dougie's Blast Off.

Doug

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I am not nearly as sure as you are: i think gold will behave on relationship to other things, not the dollar hence forth