28 replies to this topic

[cgnx]

I blinked and missed the whole move down. SIT Sit Sit.... what I tell ya. ( Ohhhhh the pain) of trying to trade the miners.

[cedartree]

hope you are right Beta. seeing plenty of posts about golds demise. they could be right of course, but somehow...i dont think so
but this move down was IMPULSIVE. anyway it could have been a C of something? cant see it. if not, then we have more work to the downsides

DOUGIE,
I think that this was a 3 of A in an ABC correction in gold. I think that gold will make a lower low next week around 645, but the stocks will not make a lower low. I am expecting the correction to last at least 6 weeks and maybe several months. I expect gold will test the 600 level and the HUI might test 280. Lots of trading opportunities lie ahead. Also thanks to Beta for posting his buys this morning...it helped knowing that someone else was buying while the gold stocks got creamed this morning. It wasn't easy to step up and buy this morning but the rewards were handsome.
One more thing, I suggest reading Adam Hamilton's piece on 321 GOLD. It offers an historic perspective on this week's decline that I believe is spot on. -Brian

[beta]

hope you are right Beta. seeing plenty of posts about golds demise. they could be right of course, but somehow...i dont think so
but this move down was IMPULSIVE. anyway it could have been a C of something? cant see it. if not, then we have more work to the downsides

Hi Dougie,

Not saying longs are completely out of the woods, just that we are overdue for a good bounce here. Agree that the impulsive nature of last week's decline has to be considered.

You've been raising some provocative questions re the overall wave structure (on which I am no expert), and it's got me thinking about various scenarios that might play out here in the commodity group next 1-2 months. To your question, "could it have been a C of something" ? -- here's one scenario that comes to mind, i.e., a complex ABC down formation that projects down to XAU 126:

171 - 144 = 26 (A1)
144 - 152.5 = 8.5 (B1)
152.5 -26 = 26 (C1) - projected low

Within that larger structure:

152.5 - 135 = 17 (a1)
135 + 8.5 = 143.5 (b2)
143.5 - 17 = 126 (c2) projected low

If this is correct, the projected low would leave us just above the March 06 low and 26% off the top, and more importantly, hold above the 200DMA. This would roughly correlate to $GOLD 550-570 (considering the lower beta) from its 730 peak.

While this set-up would cause more short-term pain for longs, in some ways it would be the more optimistic scenario I believe, as it would set up for another attempt at XAU 156-160 resistance in relatively short order. For example, I could see reaching the XAU 126 target by late May, then starting a new advance into June 06.

Just a thought that occurred to me, have not had time to see how this notion fits with individual charts -- which Ill be reviewing alot of this weekend ...


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Hi CedarTree, thanks for your post and link to the AH article. Always thought-provoking ideas from AH, and good to see more contributors posting on this forum.

Edited by beta, 20 May 2006 - 11:34 AM.

[dougie]

thanks for the posts : so to be CLEAR, NO one here thinks we could go to new highs from here? This impulsive dowm MUSt have a brother?

[greenie]

thanks for the posts : so to be CLEAR, NO one here thinks we could go to new highs from here? This impulsive dowm MUSt have a brother?

Funny I have been thinking the same after reading the posts.

[Jnavin]

Could be the beginning of an ABCDE triangle...one never knows....

[greenie]

Could be the beginning of an ABCDE triangle...one never knows....

Definitely a better place to start a big 3 up wave than two weeks before, when everyone was optimistic.
Holding onto my longs, but not adding more. Last week has been nerve-wrecking, to say the least.

[cedartree]

thanks for the posts : so to be CLEAR, NO one here thinks we could go to new highs from here? This impulsive dowm MUSt have a brother?

Dougie,
Sometimes B waves make a new high and C waves do not have to make a lower low. Often the C wave of stocks makes a divergent higher low while the underlying gold make a lower low. Anyway, I will have my boat fully loaded at the next low in the stocks and will ride it up(hopefully) with a trailing stop, whether its a B wave or a new impulse up. -Brian

[dougie]

the Jnavin ABCDE is a thought.... I guess one would have to stretch to see this as a C down we are completing, BUt look AT NEM weekly for starters