This is an equal weight gold stock ETF and it shows the same pattern but pointing down, none of this sideways pattern where we can get fooled into thinking a big bull market is just around the corner.We still end up with a sideways pointing wedge and it has been long overdue to break out. Break out in which direction? This morning gold stocks have already turned down,so I will not be surprise that ZGD will slice through the bottom wedge trend line. ZGD hit a new bear market low in early 2018 which many of the other ETFs did not do.
I’m dealing with many of these 4th wave scenarios and if I’m right this ETF has much more to fall and will even set new record lows. Another double bottom could fool us with an early bottom,whichmay take all summer to play out. After all we have to respect summer highs like 2016!
This ZGD is a fairly new addition to Canadian ETFs, which is a bit over 5 years old. The invisible wave count previous to 2013 can be used from any other Canadian ETFs with some differences. It’s an equal weight ETF and will produce different wave patterns, but in general they will react the same as most other ETFs. I show Minor and Intermediate degree tops and bottoms with the Minor degree 5th wave being a diagonal. ZGD made its bottom in mid 2015 long before any other gold stock related ETFs did. Again, I could be wrong on this, but I have to call them the way I see it, even if it means missing out on the next leg.
I hate to miss out any any bullish phase, so this is a tough call.
Any price action “after” the 2015 bottom belongs to the bullish side as a potential expanded counter corrective move. The 2016 rally is what I call a “C” wave bullish phase, which peaked suddenly in mid 2016. $14.50 CAD seems to be the peak after which all gold stock related ETFs start a grinding bearish phase, with parts of it fitting into a falling wedge. Falling wedges are very bullish indeed, but any wedge can fool us, especially if it is a fairly small one.
ZGD is now poised to do one of two things, blast up, or keep falling! “It’s now or never”, as I like to say. All ZGD needs to do is decline just a fraction below the 2015 low, and then this market will have confirmed, that a “complete”retracemet, has taken place. In short, we may find out the hard way what a fake bull market can do. Way back at the 2013 lows we can see a gentle sloping decline between 4 points. This is a bullish pattern as the markets are starting to bunch up.
I only have one Gold/ZGD ratio from today, and it’s sitting at 146:1. I may get an expensive ratio reading from the Mid 2016 peak, but that still requires more homework.
Chances are good I will update this ZGD more frequently as it deserves far more attention at this critical stage.
With most gold stocks pointing down and gold pointing up, many analysts say that gold stocks will catch up! I don’t believe in this “catch up myth” as they were saying the same thing at the 2011 peak and it didn’t work.