Gold Weekly Chart: 2011-2018 Bear Market Review

The Gold bull market soared until mid 2011, before it slipped into a grinding bear market. At that 2011 peak of about $1919,  I was still possessed by the SC  and GSC degree demons along with everyone else. It wasn’t until 2013 that I started switching “all” my wave counting over to a Cycle degree perspective.

Since Cycle degree comes before SC degree, all 5 waves in Cycle degree “must” be found first, before we can move into “any” brave new world of SC degree.  Gold just crossed into the new world of Cycle degree wave 4 in late 2011, and wev’e been hunting for a bottom ever since.  I think we are still far away from a Cycle degree wave 4 bottom in gold, but a Primary degree “A” wave sure looks promising.

I started with the above wave count many times, so it’s not something I picked out of a top hat. The challenge is always to figure out where we are in the corrective phase,  and not to get into a bull trap on a big fake bull run! A “bear market rally” would be a better term for it, and you have to remember that “all” bear market rallies eventually retrace the entire bullish phase from which they started from.

In the case of gold the late 2015 bottom ended at $1050, before gold charged up and then started to die.  Any future gold price dip below $1050 would confirm that our present bullish phase had been a bull trap.  All three parallel trend lines are based on the bottom line, then without changing any of the angles the top line matches the peaks very well. Within the rising wedge I have, the patterns are some of the wildest patterns I have ever seen, which does not fit into any bull market. Choppy rallies are usually signs of a rally going against the trend. Gold is now trapped in the cone of a rising wedge and some dramatic move has to happen for gold to break out, and show us its true path that is still in progress. I could be wrong here, but I love these setups before they happen. This wave count will be at odds even to my closest friends, so we need far more evidence of further declines to have the confidence in a fake bull market.

Silver would still have a long way to go to catch up with gold, as its pattern is far worse than gold. I don’t believe in the catch-up theory as they used that excuse many times before in 2011. What investors forget is that in 2008, Stocks, Oil and all gold related asset classes crashed together for a short period of time, and to say that this cannot happen again is not based on financial history. Most of the big swan dives that gold has taken in the past, have worked out close to $200 moves, which sure can cut our present $1314 gold price down to size.

I dislike drawing simple trend lines, but identifying  a rising wedge before all others see it, works to our advantage.

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