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Category Archives: XGD

XGD S&P/ASX All Ordinaries Gold Index Review.

 

This is just an index related to the gold mining industries. What was always odd was that this index never really created the “C” wave as deep as I would expect. Even a running pattern would have a longer “C” than what XGD shows. All the other ETFs sure don’t look like this, as they were all much, much lower.  Back down in late 2013, news that insiders were buying was everywhere, that I was convinced that 2013 was a major bottom. What followed was a rally and then another 3 wave decline to a new record low, which I have as a “B” wave in Minor degree.

After the “B” wave bottom XGD soared and pushed up right into my wave 2 in Intermediate degree. This insane rally was a 4th wave rally, that pointed or confirmed my wave 2 top in 2012. Of course, that would break every impulse rule in the book, but it sure doesn’t break any diagonal rules that I know of.

One expanded pattern at the bottom gives us the big clue that this entire bullish phase is nothing but a big bear market rally!  “ALL” bear market rallies completely retrace themselves back down to and below their point of origin. When it crosses to new lows, even just by pennies, then the bear market rally will get confirmed.

When we get close we, then we can see a huge H&S pattern being formed, and that would be extremely bullish from my perspective.

I have to do more back-checking to establish a few more Gold/XGD ratio extremes. Today the Gold/XGD ratio is sitting at 3.97:1, which means I need 3.97 gold ounces to buy one unit of the XGD index.

Don’t think that this is some freakish anomaly, because they do happen, especially in commodities.

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XGD, Canadian Gold Stock Index 2011-2018 Review

 

I haven’t looked at this index much before, but it sure has some interesting features not present on all the other gold related ETFs and indices that I cover.  One notable pattern is how high XGD  soared compared to all others, and even hit the middle of my wave 1-2 counter rally. This is as far as I can push any 4th wave rally, which I have run into many times. Elliott wave rules from the book do not work in commodaties, as it is all about connecting zigzags at all the big degree levels as well.

When we look at the late 2013 and 2014 bottom wave, it contains a 3 wave decline, which I think is part of an expanded 4th wave.  XGD should still crash well below the late 2016 bottom as any zigzag in progress is not finished just yet. We need the “C” wave to show itself, and travel to new record lows, to confirm that the 3 year+ bullish phase was just a fake.

Just in case XGD never completley retraces itself, then I already have an alternate ready to go. Once this wave position does fail I think the “A” wave in Primary degree will get moved to the 2013 bottom. 2013 was a very special year and it still is, as we also produced a double bottom in 2015.

I have no real track record on the Gold/XGD ratio but I started one, which worked out to 3.78. It takes 3.78 gold ounces to buy one unit of XGD. That number should get smaller as the cheaper it gets, we need less ounces to buy XGD units.

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