I haven’t had a look at XEG for a long time but I gave it another once over. The classic diagonal waves were evident and it’s the main reason we see many zigzags. This oil-related ETF could work as a triangle but then I would have to label it all with primary degree waves.
We are close to an 11-year bear market so far and frankly, that may not be long enough for a Cycle degree correction to complete. XEG definitely follows the sun cycle matching 2011, and 2014 peaks in solar cycle 24.
I don’t see the 5th wave decline in Intermediate degree finished, as the Minute degree 4th wave may still have a surprise rally left.
Once solar cycle 25 starts up, then I’m sure XEG prices will rise with it.
Not until the third major bottom shows can I get bullish on XEG and even then another bear market rally could follow.
For just about 3 days now the markets have soared. This is not a natural move as it’s also near vertical, suggesting that many buy stops got hit combined with the “Fear Of Missing Out”, rush.
The Dow did come back well into the previous second wave but it can’t surpass it. We would have to look for another zigzag type of a decline which would also produce a newer record low.
The Gold/Dow ratio changed but it didn’t make me jump up and down and scream “Buy”, as it’s only at 19:1 this morning.
I’m sure it will now take the rest of the week or longer before this clears up a bit and a complete retracement would have to take place if this was just another bear market rally.
The DOW and the SP500 are a bit the same but the Nasdaq looks more like an impulse.
Gold started out June with a price jump that can get the gold bulls all excited. Ok, I’ll bite as the last 3 months sure can work as a diagonal 4th wave flat.
The H&S could also be very bullish but before this happens, gold may have to crash back down to $1260-$1250, and then crank back up again.
On the other hand, gold can fall like a rock but then we know that the gold bulls are not as committed as the media makes them out to be.
Gold moves that are made with “Fear” hardly ever last that long so we still could see some wild action in both directions.
The one thing that some people might not expect is that a diagonal 4th wave can dip down into wave 2 which would be closer to $1200 gold.