43 replies to this topic

[PorkLoin]

I copied this chart from the DecisionPoint site. DP is a fantastic value, in my opinion.

This count would allow for five-wave declines into the February and July lows, creating a "synthetic triangle." That's not any recognized Elliott Wave term, just my take on what appears to be on the chart -- in this case a four month long B to give us three of the five overall legs from the Dec. high to the July low.

C here would only be a hair over half the length of A. Unusually short but it's a nice five waves, and the relative truncation of it would indicate the underlying strength in the market.

The move from the July low certainly does look impulsive, with a pretty clear five waves so far. If we really did end a correction from the December high at the July low, things look very bullish to me. I had thought the US Dollar was going higher, but if we've ended its upward move from December (and it actually looks quite good for a completed ABC) then it makes sense that Gold would again have it in gear to the upside.

The December high has yet to be taken out, and I am not saying that we have definitely ended the correction from that high. But the five-wave look of the move from the June high to the July low makes me think we may well have. If we were making a triangle or bear flag from the February low, then the legs of the triangle should be three waves, not five, and the C above, as well as the rally since, sure look like fives.

If we have made or are making an impulse wave up from the July low, then a downwards or sideways correction should appear at some time. That would be good confirmation of the larger bullish picture.

Doug

[PorkLoin]

Okay, Whipsaw City. In sentiment, at least personally. Sheesh -- what is the deal with Gold?! Mining stocks have been holding up pretty well, but on balance I now think that bullion looks weak, looks like rather than going up from the Feb. low we're probably going down from the high late last year. We've got three waves down from the recent high (which thus far would be corrective and bullish, longer-term), but I think the Commercials' big short position and big short position as a percentage of open interest in the futures is compelling, based on what has happened after similar times in the past. Compellingly bearish. We may rally again, but at this time I doubt we go above last year's high. If we say the trend is down, then a correction could have began at the Feb. low, with A up to the March high, B ending with a smaller "C" (five waves) at the July low, and a larger C up to the August high. If so, we wouldn't just be making the apparent three-wave move down from the August high. And the gold market may have yet more tricks up its sleeve. Might have to wait and watch a while longer. Doug

[SilentOne]

Doug,

If you are trading gold, you need to watch the miners right here. They will tip you off before gold will. Today's take.

CS post

cheers,

john

[PorkLoin]

Hey John, Nice charts, and that 208 area is certainly in play today. I haven't been watching the HUI -- really just the XAU a little, and bullion. I got out of all gold stocks last October, and hadn't done anything in the area until I tried shorting gold two weeks ago. Now, looking at the HUI, the count that looks the best to me, BY FAR, is that a triangle has been in the making since the high in late 2003. Check it out -- nice three-wave legs all the way, although the "D" going up (which would be to the recent high) looks a little short. But, the May to August rally looks okay for an ABC to me. Anyway, this count would have me bearish in that an "E" wave down would be expected. Going back to the bottom in 2000, I don't see any sure, clear count going up to that 2003 high, but it sure was impulsive! Really, it looks like five waves up to me, and if so then if the triangle is valid another five waves should follow. That would be a train I want to be on. Could just be a fifth wave up to come from 2000 (if this big triangle would be a fourth wave), and there too I wouldn't want to miss it. Might be one of those extending commodity fifth waves.... If we're going down in "E," then the lower triangle trendline is about 172, and a "throw-over," as we often see for E waves, could head for 160 or so. This is just speculation on my part, especially since we haven't seen enough action from this month's high yet. In bullion, the five waves up from July low to August high looks constructive, and we had three waves down to today's low, but it only looks like three waves up afterwards, and then down we went again. I can't get away from the big COT short position by the Commercials, either. Who knows -- we may see a decline when the most recent figures come out this week, but for now I have to again be bearish on bullion. Best, Doug

[PorkLoin]

The price of gold is hard for me to figure out. Short-term, momentum is not keeping up with price, as noted in the red lines. Longer-term, it's been decently strong through the corrective phase of the last 7 or 8 months, as with the blue lines. In blue is also a bullish ABC count -- it incorporates a long time for "B" but A and C really do look like five waves, and you gotta do what you gotta do. If it really is an ABC, the short length of "C" reveals a compressed market with good underlying strength.

May just blow on through the divergence and go above last year's price peak. For now, I remain unconvinced.

Doug

[PorkLoin]

This looks bullish.



Even with that darn five-wave-looking decline from Dec. 2004 to Feb. 2005, Gold is acting like it made a triangle then thrust out of it. If we accept that move down as five waves, it's hard for me to come up with a good Elliott Wave count. Might call it "C" within a weird ABC from earlier in 2004, but I don't think that serves any real purpose now.

If we call those five waves "A" within a still-ongoing ABC -- then we'd be making a long and nasty-looking "B". Here too, I don't think it would mean all that much in the grand scheme of things. Even if "C" came, the market would still be bullish overall. For now, the count I like best is an ABC from December to July, as I mentioned on September 10th in this thread.



I don't know if we're done 4 of 3 yet, in the count above. And of course the exact pattern will not be as drawn, i.e., 4 doesn't have to be a triangle, etc. It could easily go well down into the 450s. Overall I think it's now a bullish picture, on balance, despite the big Commercials' short position in the futures market.

Doug

[wxman]

Nice charts Porkloin, I think that you are correct on the ewave count

[PorkLoin]

I think that you are correct on the ewave count

Finally!

Seriously, thanks, wxman. Still can't get over the apparent five-wave nature of that move into the Feberuary low, though. Oh well.

Doug

[PorkLoin]

Nice candle there at the end.... If we're not just going on up, the action of the last three weeks still looks like a bullish ascending triangle to me -- rising on the bottom, flat on the top.

Doug

[PorkLoin]

Could still be overall bullish from the summer, with at least another wave up to come. I think this is a lesser probability due to the Dollar's strength plus bonds' strength, the Commercials' futures position, and the HUI and XAU leading on the way down.



I favor this count for now, and think we will see the $450 area.


Doug