Tag Archives: Gold

Gold Daily Chart: Bear Attack Update!

One thing I love about the waves in gold is that the have the ability to always move against the majority, when they least expect it to. Is this gold crash going to be called an unexpected correction, or was the entire move just another bear market rally? If we look back to the late 2016 low, followed by a rally. This bullish phase has so many overlapping waves that it is hard to find a single good impulse wave structure.  This type of pattern is what we would get when an asset class runs against its own larger trend. I’ve seen wave counts where the wave analsyts  turn all these waves into pure impulse waves, and therefore forecast a big bull market yet to come. Gold sure looks like it wants to head south not north so my bearish outlook remains.

This bullish pattern above can fit into a triangle which ended at the magic number of $1360. Any triangle in a “B” wave rally is very bearish as a “C” wave crash should follow.  The top resistance line also produced at least 3 H&S patterns.  Since my triangle is a Minor degree triangle then at the next big low, my degree level has to go up by at least one degree.

Most of the time it would be a two-degree change which will be the case for gold. Sure we have a long way to go, but gold can move $100-$200 with little effort. In silver this “B” wave is much lower and just as distorted.  For the entire 2017 bullish phase to be confirmed as a bear market rally, gold would still have to crash below $1120.

Last week the commercial traders added to thier short positions which is not a bullish indicator but a very bearish one.  If oil keeps on crashing like it has been doing, then I don’t see any reason why the Gold/Oil ratio will not drag gold down with it.  In any potential mini pani,  investors could end up selling everything in a desperate “dash for cash” once they realize that the gold bull market is crumbling all around them.

This could take until the September, October time period for all this to play out, so patience is the key this summer.

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Gold Crashes Joining Oil in the Decline.

Gold refuses to soar as forecast by the “Crystal ball readers of Wall Street”. Instead gold crashes right along with oil this morning. Sure, the $1300 price level had importance but now it’s more like a major resistance price level. The markets love even numbers so gold $1200 could be the next even number price target. Gold still has to retrace two sets of previous lows before it even gets close to $1200. By then anything can still happen.  Gold needs for the US dollar to turn real bearish, to provide the push in gold prices.

This has not happen regardless of what the gold bulls have been forecasting. When an asset class moves in a direction we do not expect, then we don’t throw out the idealized road map, but must take a new reading in where we think we are. Gold looks more like a triangle pattern but it does not fit into a 4th wave. It works as another zigzag decline, but my degree level still may need adjusting.   As we can see gold can crash dramatically when it wants to, and you can bet someone will always blame some fundamental news why gold also crashed.  These gold bearish moves is not a surprise if we look at gold as just one big bear market rally. Even gold could have established it’s 2018 record high with gold $1375.

A move like this reverberates through many other asset classes, so it’s never just about one asset class, but many of them will react during the same time.

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GLD Gold ETF 2011-2018 Review

I had to try different settings before I could use this chart to count out GLD. GLD tracks the price of gold not gold stock miners.  GLD tracks gold very well, like IAU does, and the trading volume always seems to be there as well.

The 2011 $185 price peak is my Cycle degree wave 3 location. Once I looked at the gold bearish phase from a diagonal wave perspective, things started to fit much better. The big problem is always trying to figure out where we are in this diagonal 5 wave decline. The explosive move from the 2015 bottom, to the 2016 peak, also works better as an inverted  zigzag.

What followed the 2016 peak, was a grinding decline, and in 2017  another gyrating bullish move. happened.  This bullish phase or overlapping wave structures, should be a clue that our present gold rally is struggling. When it struggles like this GLD is traveling against the larger trend.  Any gold chart or ETF gold chart is showing this bullish move, and the majority all think that gold is still going much higher. After all the bullish trend is still in place right?

The one thing that the majority will never figure out, what is a bear market rally and what is a true bull market. Only a very small percentage of traders or analystst know the difference.  I’m not talking about some imaginary conventional description of a 20% decline, as a simple 20% decline has little meaning in the Elliott Wave world.

From an Elliott Wave prespective, any bear market rally is completley retraced. In this case the low was in late 2015, which would have to get completley retraced.  Even if it’s only by a very small percentage. Since the 2011 peak we’ve had about 6-7 bear market rallies and they were “all” retraced, so chances are good that our present rally is also a bear market rally.

The bigger the bear market rally the more bullish investors get drawn into a bull trap, so identifying bear market rallies before the crowd does, is extremely important.

With about 15 of these ETF patterns in play and only “one”  ETF gets completley retraced, then all the others will eventually follow. This may take all summer and well into the fall, but a new record bottom will also produce a very good buying opertunity for the next bullish phase that is sure to come. This will be a Primary degree “B” wave bullish phase,  which will also be a bear market rally, but it will be a much bigger bear market rally by “one” higher degree.  The short description would be that gold can travel 1.618 times higher than the 2016 peak but not exceed any new record highs.  At about $175 we have a tripple top which would also produce an extreme resistance price level.

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Gold Intraday $1300 Price Update

The $1300 price level seems to be the magic number at this time, like $1360 was way back in April. Will the $1300 price level hold? I doubt it as price has little meaning while pattern is everything. I have started into the next higher degree 5 wave sequence which may still have more to go. It’s not the only proability as another zigzag decline can also be in progress. Gold does not look like it wants to go ballistic like many gold bulls are hoping will happen. Gold refuses to play that game as it’s been grinding its way down for a few months already.   It all depends on what we believe our understanding of what a bear market rally is and how it acts.  Conventional wisdom allows any upside move to be called a bull market, but from an Elliott Wave perspective all bear market rallies get completley retraced.

These bear market rallies can only be Primary degree or less as my largest degree is Cycle degree. Oil is a great example how a big bullish phase can hoodwink all of us into believing a bullish trend can go on forever!  No trend lasts forever as they will always turn against the most skewed trade set-ups all the time.  Gold has been struggling to go higher since the December 2016 bottom, which usally means that gold has been in a rally against the main trend. Since the 2011 peak gold has been meandering down in what looks like a 5 wave sequence but until we look at this decline from a diagonal perspective, what I count out will make little sense.  The mass media attention to gold is blinding us from looking at silver and even gold related ETFs.

Any move in silver has been lethargic at best, and is still miles away from breaking out to a new record high. I’m not going to spew out the same retoric as the gold bulls are doing becuase if I do, we end up in the same trap as the majority. I follow about a dozen gold and silver stock related ETFs and they’ve all have been acting like they are hung over after a wild drinking party.

The US dollar has been correcting but that may have its limits. The Euro has been taking a beating at the same time, but for gold to soar, we need a huge bullish phase in the Euro, and other US dollar inverse related currencies. An Intermediate degree bear market rally is enough to fool the majority while even a simple Minor degree bear market rally will send bullish analysts of on a tangent.

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Gold Monthly Chart 1980-2011 Primary Degree Review

I don’t like drawing trend lines most of the time because the trend lines do get abused to the point where they have lost their meaning and effectiveness. For well over a decade I counted all markets from a GSC degree perspective and thought little that the 1980 gold peak was nothing but a Cycle degree wave 3 peak. After all the 1980 gold crash produced a 20 year bear market, which many analysts called a secular bear market. Many GSC degree wave analysts never saw the 2000-2011 gold bull market coming as they were still bearish when gold hit $1000 in 2008.  They missed most of the gold bull market before they changed their minds and started an impulsive wave count.

There is no way that we should miss a gold bull market that was so big it took until 2011 to finish. This is when any Cycle degree wave 3-4 should have been thrown out but yet the majority of wave analysts still maintain gold as a Cycle degree wave 3-4, or worse SC degree wave 3-4. I have looked at gold with both degree sets but now look at gold from a Primary degree wave 3-4-5, for the 1980-2011 time period. This shifted the Cycle degree peak ahead by 21 years, and at the sane time-shifted any SC and GSC degree peaks much further into the future. Being out by just one degree, means the diffrenece between catching a major bull market or missing it entirely.

Reviewing this 1980-2011 time period and its wave count is very important to understand. I use the wording “Must” often and it has the same meaning as any basic EWP rule. EWP rules cannot be broken or ignored. Once I replaced the 2000 gold bottom with a Primary degree bottom then we know that 5 waves in Intermedeate degree must develop to complete the 5th wave in Primary degree. It was a very choppy ride with a big 2008 crash and correction that took most all other asset classes with it. Gold, oil, gold stocks and the general stock market imploded together.  The 2008 crash coincided well with the end to solar cycle #23 as well.

Of course many will never accept the idea of a Cycle degree peak in 2011, but I do. To confirm the gold market bearish phase it has to give us a very specific wave count. We always have 5 choices, but only 3 simple corrective patterns. Flats, Zigzags and Triangles make up this list. At this time we are looking at about 30 Cycle degree markets, with all the commodaties seeming to be in zigzag patterns in different stages.  There are a few that sure look like Cycle degree triangles, which is a rather rare pattern.

In 2016 we saw another bottom in the gold price at $1050, which many assume is the start of a new huge mega gold bull market. Sorry folks, ain’t going to happen on this trip, as the $1050 price is not nearly low enough to justify the completion of any 4th wave in Cycle degree. Our recent bullish phase may only be a 4th wave rally so until that clears up I will remain bearish in the shorter term.

It may take all summer for this pattern to clear up, after which another big gold counter rally will arrive, but it will be one degree higher. One degree can produce a 61% difference in price projections, and a quick calculation could send gold and gold stocks 61% above that mid-2016 peak. Once Cycle degree wave 4 is finished then I have no problem talking about a fuure $2300 gold price. If I mention that price too many times now, readers can make the mistake of thinking $2300 is just around the corrner.

Our recent Opec Oil bear attack slashed the oil price down to size, and sooner or later gold will not maintian its price. Gold to head north while oil heads south, is a poor excused to maintain a bullish gold forecast, as the Gold/Oil ratio will not allow for this to happen.

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Gold Intraday Crash Review $1300 Price Level Busted!

This morning gold crashed about $23 breaking the $1300 price level with ease. I mentioned that this was a very high probability and this morning it happened. We still have a bit to go as 5th waves tend to extend dramatically at times. I dropped my degree level down one degree of this 5 wave run, but I have to stay below Minor degree as we may still have to deal with a zigzag in Minute degree. The $1300 price level was a mental support price for all the bullish price action that was supposed to make gold soar. Gold is soaring alright, but in the wrong direction.

The US dollar also spiked higher this morning as I believe it’s a bullish phase is also far from over. In the near term for this summer and into the fall, I will remain bearish. In the past, gold has had few problems with moving $200 at a time in both directions. This decline is far from over, but we have to be aware that violent reversals can happen at any time, even if they may be temporary reversals.

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Gold Intraday Rally Review

In April gold created a spike to the upside and then proceeded to crash or go into a bearish phase. As soon as the May rally started gold opened with wave structures that overlap each other. This also makes it a candidate for a triangle. Gold stocks acted lethargic to this bullish phase, so they are not impressed with gold’s recent move.  This sure could make the $1302 just a temporary resting spot as another leg down should follow. My 5 wave decline in Minute degree may be a bit too large, but that can always be adjusted later on. I will keep my Intraday postings during the week, (Tuesday-Friday) as it is critical to spend time on my larger degree pictures as well.  Any site will give you short term trade setups as they are as popular as bathing suits in the summer!

No way will I spend my time giving readers short term trade setups as that is not what I use the EWP for. Any kid with the EWP book and a ruler, can give you short term trade setups.  Flipping numbers and letters around like we flip hamburgers is not my cup of tea.

So for now gold is acting bullish but this will not last as that $1300 price level should still get crushed!

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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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Gold Daily Chart Review

Since December 2016 gold has displayed one ugly advance that only a mother could love! During the 2016 crash we could have a 3 wave crash, which allows the $1375 price peak to be broken to the upside this summer. If gold does breakout then the entire move,  would be called a “C” wave bull market in Minor degree.  At best this would allow gold to soar in the shorter term, but it still looks like a 4th wave rally to me, when counting from the late 2015 bottom.

This would keep money out of the markets, as I don’t chase bull markets when trading ETFs. I think the media focus on gold is blinding us to the potential for gold to finish a big bear market rally of Intermediate degree wave 4.

Just the fact I mention an Intermediate degree 5 wave pattern is a clear message to readers, that this blog has passed into the world of a Cycle degree 4th wave correction. I use a strict “rule” that no 5th wave should ever be left uncapped, and if you find one of my 5th waves uncapped, then send it to me and I will redo it. Actually capping the 5th wave is built into the EWP, I just emphasized it as a strict rule.

The big $1050 bottom has not even touched the previous 4th wave yet, so don’t get all cranked up about a $5000 or $10,000 gold price forecast coming soon!

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Gold Daily Chart: Is $1375 A Bull Trap?

 

Our present gold bullish phase was an extremely choppy ride and gold has been struggling as of late. We can go back 5-6 years and gold have struggled around this 1375 price level many times before. Based on the top line we also have 4 H&S patterns of various sizes, which would be very bullish in a bull market, but it would be very bearish if a big correction is coming.  I cannot stay bullish when I see this as it looks too much like a gold bull trap to me.

I did raise my degree level up by one, and the “A” wave I’m use can switch to a 4th wave easily. The rally that started in early 2017, can work as a triangle in a “B” wave. Any triangle in a “B” wave like this is very bullish in the long term, but short term gold bulls could be trapped.

We also have a rising wedge which we know can produce some violent trend reversals. Our present top could be a running inverted zigzag so a dip below $1300 would be the first logical price target to get breached.

Gold could turn bearish, along with the stock market, which has happened before during the 2008 crisis.  Gold could roll around some more, but if the entire gold bull market was a fake, then it must start to tell us soon.

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Gold Daily Chart Review

The Gold crash of late 2016 has just about been completely retraced and gold is finding tough resistance at the $1360 price level. Many times I have mentioned the $1375 price level as the price to beat to confirm the 2016 crash as a correction. We’re still about $25 away from the $1375 breakout and I’m confident gold will still clear $1375 with flying colors.  Wild moves in one direction and then a wild move in the other, seems to be the normal state of affairs.

I show a simplified “C” wave still in progress, but they are all diagonals, which is what we should expect for a “C” wave bullish phase.  All this is still pointing gold to the $1500-$1600 price range. A short term correction may still be in progress so I expect some violent moves as gold gets closer to a breakout situation.  Emotional investors jump in and out of gold for “safe-haven” reasons, so based on that it is impossible to know when investors suddenly get the urge to “buy”.

In the end it will be the US dollar bear market that will keep gold very active and until the US dollar is ready to charge back into a full bull market, the upward pressure on gold should remain.  It’s when this daily chart goes vertical, we have to wake up, as vertical moves do produce big bearish phases.

The biggest threat will come from stocks, when they start on bigger counter rallies. Gold and gold stocks will always find competition from the general stock markets and the idea is to spot any reversal before it happens, not after. It is the mass media that are always late in recognizing a trend change as the fundamentals are lagging indicators, not leading indicators.

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Gold Daily Chart Update: More Upside To Come!

Gold is making what looks like a correction, but with a bit more downside left to go next week.  Since the entire December 2016 low gold has created a choppy bullish phase that has been a real challenge to say the least. These choppy bullish moves also tell me that diagonal waves are involved, which develop in any degree “A”, “C”  in 5th waves. At this time the gold bullish phase is not finished, and that gold still has to break above the resistance price of $1375.

Bull markets don’t end when they are pointing down, they end when the charts are pointing up mostly in blow-off conditions. This blow-off condition should still happen which could push gold to $1400-$1600. At $1550 gold would run into the bottom of resistance, so gold has its short term bullish battle cut out for it.

The COT report has not been updated, but the previous week they added to their long positions in gold and silver even as they are still net short. With silver the commercials are just a bit shy of being even, which is a big change from what they used to have.

The US dollar bear market is far from finished and also has a bit more correcting to do. Also, as long as stocks are very bearish, then this alone could give gold a big boost! Some people are really hung up on the Gold/Silver ratio, which I think is irrelevant from a bygone era when silver was fixed to gold. Even though, I took a reading today, and the Gold/Silver ratio is at 81:1, which is the same ratio that happened with the 2016 bottom in gold. I will do a few more backward checks, but I don’t expect to find any Gold/Silver ratios helpful.

I use this gold futures cash chart for all my ratio calculations.

Gold stock ETFs  look like they are creeping down, but they can also still show us a good run. It is very common that gold can act much differently than gold stock ETFs can.

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Gold Intraday Rally: Impending correction?

An inverted zigzag could have started in the first part of March and they can always get retraced by 100% or more so until this clarifies, I have to look at a short term potential bearish move in gold. Besides that I am starting to notice that I’m working into degree levels that are getting smaller and smaller. I only have two smaller degrees left from what I’m using which is not a good sign. It means I have to take another look on the daily charts to see if a higher degree is warranted.  Any move down to $1300 would accomplish a complete retracement, but diagonal waves can trash the bearish outlook easily.

The US dollar may have a short term bullish surprise for us and until that has played out, gold will see downward pressure.  Any moves in this commodities world can be very violent which many traders do not like! Get used to it because leverage is one of the main causes of violent moves. Bitching about violent swings or thinking commodities shouldn’t crash is a totally naive outlook. In commodities “fear” is the main driver of prices. In the general stock markets, it’s greed and hope that drive prices.  Fear comes into play when stocks start to correct or head down.

I think gold still has to go well above $1375 as the  bull market has consistently produced higher lows. If we don’t pay attention to higher lows then we will always get out before it’s time to do so. When gold makes a vertical move, then it may be a different story.

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Gold Intraday Bullish Reversal?

I am looking at a potential move that might resemble a 5 wave run in a “C” wave bull market. We already have a higher low this month, which is the conventional description of a bull market. Gold is still creating higher lows since late 2015 when the bullish phase began.   I mentioned it many times that gold should still completely retrace the $1375 price level, which it had tried to do many times but has failed each time.

As long as the US dollar has not finished its biggest bearish move, then gold will see upside pressure regardless of what the expert opinions are at any given time.  We can’t rely on supply and demand scenarios as there is no end to the supply when we see pictures of the gold in the vaults.

Any rate increase may stun the gold bulls temporarily, but back in the 70’s rates were soaring right along with gold so it can happen again. The rate increases scheduled don’t even amount to a bee sting compared to what happened in the 70’s.

I think we will see the end to any rate increases by watching the 30-day Fed fund rate after it has flattened for a year or so. It may not even last that long as the first 1 to 2 pauses might be enough.

The gold bullish cycle so far has been very choppy, which do not fit into the perfect world of an impulse.

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March, 8, 2018 Gold Intraday Crash Update

Since the December, 2016 bottom, Gold has created higher lows which is the general accepted pattern that defines a bull market. Gold has finished a correction in early March and is now in another correction, which should not travel to any new low below $1304.  Gold might turn at the $1316 price level, but that remains to be seen. I have mentioned it many times that gold still has to retrace that $1375 price resistance level, and I will stick with that until it happens.

The pattern in the last 6 weeks or so sure looks like a correction, but to confirm it gold must travel above $1375.

Gold’s moves are more dictated by the US dollar when it rallies and declines. As long as the US dollar is still in a bear market, chances are good gold will react the opposite way. Besides the US dollar, the fear of a stock market crash may force a jump into gold.

When gold pushes higher and produces many inverted zigzags, then this will be a signal for yet another correction, but so far that has not been the case. We have about a $10 window to allow gold to still decline, so this would be enough to scare all the gold investors to make panic moves.  I will not fill in many of the previous waves, because this one little correction could fail, and I would have to work a new count anyways.  No gaps below or above present prices have opened up, so that is a good sign.

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Gold Daily Chart Review $1375 Or Bust!

Do you love choppy charts? Well, we have our share of wild moves in this gold market. I may have to change my wave 1-2 in Minor to an “ABC” also in Minor degree. At this time it’s not an important issue, as either way that $1375 price, should still get hit and or exceeded.

Since the late 2016 bottom gold has produced higher lows which is the conventional description of a bull market still in progress. The wild market action in gold in the last month or so, sure suggests a potential correction has taken place. The $1304 price level has been holding, so next week should tell us more.

February’s gyrations could just have finished so gold could see another leg up.  Gold also left a nice spike in its wake, so that also adds to a potential reversal. From the December gold bottom, gold soared $120, which I add onto the $1304 bottom. This ends up at the $1424 price level. If this happens then it may take all of March to play out.

All those that are complaining that the fundamentals in the stock markets haven’t changed, then you are not paying attention to Trump conducting a trade war! President Trump has declared tariff wars on steel and aluminum imports. The bears have tons of fundamental reasons for the markets to crash now. Conducting a trade war at the record stock market peaks of bull markets, is sure to bring down the house.

The last time they crashed the markets with a trade war, was when they past the Smoot-Hawley Tariff Act of  June 1930!

Smoot–Hawley Tariff Act – Wikipedia

 

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Gold Intraday Crash Update.

In my last gold update, I thought another move north would happen before gold resumed its decline. This did not happen, instead gold dropped like a rock. Since the January peak the pattern has far too many overlapping waves, which sure can fit into a corrective pattern.

The wild bullish moves in the US dollar, was the main reason for gold’s decline. Gold and the US dollar move inversely to each other many times, and therefore once the US dollar rally comes to an end, gold should make a very positive run.

Right now gold has come to a stop at the $1304 price level, but a quick drop below $1300 could still happen. Overall a flat could be forming, where the “C” wave is part of a regular flat. If another fake bull run starts to happen, and it also becomes another zigzag, then we may have to look at a potential 3 sets of zigzags, with a potential “D” wave bullish cycle about to take off.

There is no way that I would count out a wave two correction with a triangle, so any triangle will force a change to that January peak. Another zigzag should travel well above my “B” wave in Subminuette degree which is at the $1360 price level.

As I post gold is still on a rally so hopefully we will get more than just another counter rally. As long as stocks and the US dollar have the potential to decline, then golds strong bullish phase can still happen.

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Gold Intraday Gyrations Update

Since mid January gold still has not pushed higher, but has gone sideways with some wild counter rally moves.  This alone suggests that gold is still in a bigger bullish phase.  In the last few days, we had a move that could fit better into a potential 4th wave, but could still see a rally before pushing lower one more time. A gold push below $1300 can still happen, but the bullish moves of the US dollar have kept gold from breaking out. I’m getting close to spending all my degree levels with only one degree left, and when that starts to happen, I’m forced to review all my Minor degrees and higher wave counts.

In the last few months the pattern has been so choppy that it still fits into a bigger corrective pattern. Eventually that $1375 price level should get completely retraced, but any vertical type of a move, could set gold up for another big correction. As much as the gold pattern looks like the footsteps of a drunk in the snow, gold can become the hedge for safe-haven buying.

Gold seems to be reacting a bit after the end of a month, so it may take until the first week in March before gold is ready to turn again. At the $1304 price level, gold would be finishing a H&S pattern which can produce a double bottom base for gold.

There may be more short term downside moves in gold, but in the longer term I’m still bullish, as I have no intention of selling any of my gold stock/ETFs.

When the gold charts are pointing down, investors are in a panic to sell, but in the real world smart money is buying bullion. It’s the dumb money that is running to the gold dealers to sell gold and silver to buy Bitcoins. In the future Bitcoins may go from zero and right back to zero, but gold will still be here. Gold and silver have served as a medium of exchange for thousands of years, which no other medium of exchange can ever claim.

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Gold, To Die Or Not To Die Is The Question?

Gold has executed a pretty choppy decline, which I see as a good thing. Choppy declines can just be part of bigger corrections, and this gold decline has no shortage of choppy declining wave structures.  I would rather see a nice spike to the downside and then the reversal, so more downside may still be the order of the day. Gold reacts more to the US dollar than any other economic fundamentals, like oil might do, so I remain bullish on gold in the longer term.  Short term anything can still happen, so we have to remain open minded for more downside to come.

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Gold Intraday Update, Still In A Correction?

Gold and gold related stocks have taken a beating along with the regular stock market. Gold stocks are more related to what the US dollar is doing, not necessarily what the fundamentals are doing.  I think there is more downside to go with gold, but the need for a safe haven asset class, is pretty strong.  I don’t think even $1304 is deep enough for any wave 2 bottom to be completed so we have to be aware that this gold correction still needs to haunt us before another great leg up can occur.

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Gold 2011-2018 Review

Once the late 2011 gold peak ended, we had one difficult decline, which at this time could be a 4th wave decline in Intermediate degree. This big bull market started in 2000-2001 with a set of very small 5 waves.  Yes, the bull market was very choppy, which was followed by a very choppy bear market as well. By late 2015 gold had a bottom of 1050 before gold charged up again, which I can only fit into a diagonal. Since I have 5 waves up in 2001, then any present 5th wave should also give us another set of 5 waves up.

Any 5th wave can be a diagonal 5 waves as well, so I will use this wave count until it fails. Running this wave count is the only sure way of eliminating it as it takes time for key patterns to materialize.  I’m expecting a gold correction, so how far this decline goes could trash  this wave count sooner than what we think. By constantly eliminating wave counts that don’t work,  we end up with a wave count that may work. Elliott Wave is about consistently eliminating wave counts that don’t work.  Any move specific to the degree always has 5 options, so we constantly have to eliminate 3 choices to narrow it down.

Any higher degree top for 2011 and the $1050 bottom is not nearly deep enough to call  it a completed Cycle degree bottom.  Too high of a degree also makes us less sensitive to the bearish mood, so this can freeze us into always waiting for lower lows, when contrarian indicators tell us to do the exact opposite.

When gold stock insiders have bought or are buying their own stocks back, we know that a new bullish phase will start to happen. Insiders buy early and they buy as their company stock prices are tumbling. One thing is certain insiders do not buy on a whim nor do they ever sell out on a whim. Any bearish wave count under those conditions will never survive.

On Friday I walked into my favorite gold dealer to buy one of those 150 year Canadian anniversary silver coins. They are gorgeous coins and I bought a couple of them last week. This is not a big deal, but what the proprietor told me was, many gold coin owners came in last week to sell their gold ounces so they can buy Bitcoins!

I really had a good laugh when he called “Bitcoins” Bitchcoin!  He even showed me a physical Bitcoin which I instantly called a fake which both of us knew. Shit, I wanted that coin just for a laugh to show other people. In the bigger picture you should never touch a real Bitcoin as they don’t exist and never will.

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Gold Intraday Gyrations Update

After a great run, gold has now started to back off.  Any top trend line I could use is useless as it would be a race to see which trend line will get sliced first.

Sure, gold can keep right on trucking, but there could be a bigger correction than what the majority is anticipating. A “Flash Crash”,  type of a move would be the perfect outcome. The markets always love to try and fool as many experts as it can and gold is no different.

On other occasions we could see a %61 net crash of a single wave 1 which would be a pretty normal correction. This would be closer to the $1278 price level. It may never happen, but corrections can go very deep with commodities. On the positive side gold can just keep grinding higher, brushing all the corrections to the side until a really big gold correction surprises us all.

When all the gold bulls are making bullish calls, then that’s when the gold market can start a reversal. There may be a bit of a gut move by day’s end, which only gives us until the end of the month for a turning window to show up.

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Gold Intraday Bull Market Review

Gold has had an amazing run, with a net move of about $100.  This great gold bullish phase could be coming to an end if  another wave 1 is getting close to completing.  Depending on the strength any wave 2 can dip back down with a net 60% retracement. This would make the 1270 price level a target. There is also no way of knowing how bullish the correction can be, especially if we get a flat of some kind. Running flats are a part of the wave landscape which can produce extreme moves to the upside.

The bottom trend line is just a guide as any correction bigger than expected, will slice right through this trend line.

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Gold On A Run Update: Time For A Rest?

It seems like gold is on a marathon run, hardly taking a breather. No trend lasts forever, even at these small degree intraday levels. This rally changed from bigger wave corrections to smaller corrections that we can hardly count out.  This has the classic diagonal wave structure signature, so until better subdivisions come along, this will have to work as an inverted zigzag.

It could be a slow correction or a mini flash crash like move, with no real firm retracement level in sight. Even though it looks like a vertical move on the daily scale, in this intraday scale it has a bit more of an angle to it.

We are coming up to a potential H&S setup so this may add some resistance as well.  We’ve seen these types of H&S setups many times before, with most of them ending up being extremely bullish.  I don’t expect, this time to be any different.

This gold rally got help from the US dollar decline, causing stupid emotional investors to jump on the bandwagon.  Many investors only care that something keeps going up, as they couldn’t care less about any fundamentals. Without those trend chasers, contrarians have nobody to pick on, or no gold bulls to sell to in the future.

The big bull market in gold is still in progress, and it could take all of next year before it becomes more clear to a greater majority. That day has not arrived, even though gold is pointing up, like what we would see in a final blow-off situation.

The main price level of $1375 still has to get retraced in the short term, while longer term the Gold/Gold-stock ratios, will need to shift to the expensive side.

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Gold 2011-2017 Review

Since the 2011 peak, gold suffered a bearish phase for about 4 1/2 years before it exploded in 2016.  In general, when a wave count just doesn’t fit well at certain points, then I try and work it from a lower degree perspective. I know that the majority of participants work only from a price perspective, and I get that, but the sad truth is that contrarians don’t work on price. They work on crowd psychology. They also never waste their time drawing a bunch of useless trend lines, nor do they spend their time drawing numbers and letters on any chart. The majority of the trading world works on “Price”, and short term trade setups. One main reason that there are so many short term traders is because they have no clue what the big trend actually is, or what it’s going to switching to.

Gold is extremely cyclical and the contrarians love this. In the cyclical gold market, “If your not a contrarian you become a victim”. Buy Low, Sell High is the contrarian way. When insiders in gold companies are buying their own shares back, then this has to get reported. The same applies when they are selling. In 2013 the gold news was full of insider buying reports and even now gold stock insiders of gold companies are buying into their own shares. I have a contrarian friend I visit regularly, and he constantly looks for insider buying before he takes any positions in any single gold related company.

Ignoring this public information, ignores a great contrarian indicator that helps us in forecasting a bull or bear market in gold and gold stocks.

Any real contrarian cannot afford to miss any big bull market in gold stocks. Sure, many times they are getting in too early, but high net worth individuals need that extra time to accumulate large positions. The idea that we should never add to a losing position is irrelevant to any contrarian. In the contrarian world, it’s all about accumulating positions in preparation for the bullish phase still to come.

I dropped the 2011 top down to a lower degree wave 3 in Intermediate degree. A lower degree level is far more sensitive than higher degree levels are, and the 2011 peak is a prime example. Many were calling for a Gold Supercycle to go to $5000-$10,000, yet gold did the opposite thing and crashed to $1050. For a Cycle degree  wave 3 top in 2011 to be in play, the $1050 price level is not nearly low enough for a Cycle degree correction to be over, but a $1050 Intermediate degree bottom, could fit.

For now, and maybe a bit longer into the new year I will look at the commodity bullish market from an Intermediate degree perspective. Since that $1050 bottom gold jumped 130% before another bearish phase kicked in. This bearish phase that ended in late 2016, is not part of the bigger bearish phase, but it’s part of the new bullish phase that started in 2016. If this is reasonably close, then eventually gold will travel above the $1919 price level. Even if doesn’t perform that well and never makes it to a new high this time, then it will do it at another time in our future.

It would be pretty exciting to see a potential diagonal set of 5 waves develop in gold, but we have to keep our options open as well.  Any big bullish phase in gold will not end just because of a big bearish dip in price. They end when the majority display extreme optimism.  Not owning bullion when the stock market is pointing up, is a constant mistake investors do and have done many times in the past.  When stories come out that investors and fund managers are dumping gold to jump into Bitcoin, it tells me investors have learned nothing about gold. Emotional investors jump on anything that’s going up, and they jump off when it’s going down.

I will try and get a few Gold stock related reviews in,  but will take a break until next week.

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Bitcoin Crash, Gold 2.0 Myth Busted

I increased the degree level to where the start is now a Minute degree. During the last 5 days Bitcoin crashed about $9000 and has now recovered a bit. From my perspective, I have not run into a set of good looking declining 5 waves in a very long time. Any little 5th wave acted like a diagonal, which makes Bitcoin wave counting an excellent experience. There could be more of this counter rally to go, but sooner or later the counter rallies will get bigger and take longer to play out.

I started the 1-2, 1-2, 1-2 count quickly, and so far have not had to change it, but may have to at a later date. Three sets of visible 1-2 waves will certainly give us a wave three extension, until the next 5th wave decline starts. If the last  5th wave contains many choppy wave structures, then that will help to confirm a new higher degree will be forming. Also, any 4th wave triangle that may form will also help in confirming our location.

Bitcoin plunges again, now down more than 28% since Sunday’s all-time high – MarketWatch

Unless I can see a clear zigzag or flat starting to set up, there will be no telling how deep Bitcoin can crash. We heard the stories about the myth that Bitcoin is Gold 2.0 which has now been exposed as pure bullshit. At one point $200 billion worth of Bitcoins evaporated in a puff of electronic smoke.

This Bitcoin crash changed the Gold/Bitcoin ratio form a peak of 15:1 to a bit under 11:1. This is not even close to the 3:1 ratio we did have at one time. Also, there is no guarantee that Bitcoin will ever rise from the ashes again.  At a 3:1 ratio Bitcoin would have to fall to $3800 USD, which is very close to the cost of mining one Bitcoin.   As of today, the Crypto count is about 1377, with no end in sight just yet. When the list stops growing or even starts to shrink, then this Crypto party is over.

Below, we look at gold and how it reacted to the Bitcoin crash during the same 5 days.

Gold, dipped a bit, but in most part gold completely ignored the crash of Bitcoin. Gold kept chugging along, pushing higher every step of the way. I think gold has more room to make gains in the short term, but it’s starting to form a nice spike on the daily charts.  I didn’t touch my bigger wave count as I just couldn’t find a more convincing alternative at this time. Either way this gold bull market has a long way to go in time, and price.  It’s not the top projected price that’s important, but the mood that will be present, is far more important. Also, the Gold/Hui, and gold ETF ratios should become very expensive.

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“Gold On A Run” Intraday Bullish Action Update.

So far our December, 12th bottom is still holding which is a good thing. Any price move can mean nothing in the bigger scope of things, if we don’t understand the type of pattern that has ended. Recently, many analysts have been bashing gold, as the majority have been selling and running away from the gold markets. Dumping gold and running to Bitcoin or stocks will backfire like it has happened many times before. Calling Bitcoin the new Gold 2.0 is a silly brainwashing tool. Gold, has been around for thousands of years while Bitcoin is only 7 years old. The antics of the herd will never change when emotions take over.

Gold is the “Real” money, as we can exchange into any other currency when we need to. Gold retains its value over time as well. Sure, it swings widely in price, but that just shows how much the price can be compressed into one ounce of gold. Back in 1999 gold had an extreme low price of $253 an ounce, and the majority of all experts hated gold at that time.  Then 11 years later gold’s price had exploded to about $1919, a 758% gain. The hype to own gold in our investment portfolio at the peak was the strongest, yet they didn’t give a shit about owning gold in 1999, when they were calling it the “Ancient relic of the past”.

Recently the fund managers have been throwing gold away (selling), not knowing how much the gold ounce can compress in price.

Chasing a bull market is sheer greed and fear, plus it wrecks havoc with your cost averaging ratio. Any gold bull market is not over until the US dollar starts on a new and very bullish path, which must break 2016 highs. Well, maybe the US dollar implodes to new record lows instead,  like it did from the 2001 peak.

It’s always good to own gold bullion, but only when you buy it when it’s pointing down.

When investors start to see that the Nasdaq and Cryptos are starting to head down, and gold is heading up, what do you think the emotional investors’ reactions will be?

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“Nobody Cares About Gold” Commentary

‘Nobody cares about gold’ as hedge funds seek thrills elsewhere – MY Stock 118

The present stories about the Non Commercial traders dumping gold to join the Cryptos Mania is nothing new folks. Back in 1999 when gold was $260, banks were dumping gold, individual countries were selling gold, which they called the, “Ancient relic from the past”. Stocks were peaking as well, so nobody wanted gold. At that time you could only find 14% bulls present, as published in the Market Vane Reports.  From this ugly bottom gold turned and soared 730% as the majority again never saw it coming.

I documented that turning very well in 1999, as even hedge fund managers were dumping gold when it was $260 an ounce.  Back then, mining companies were switching to the Dotcoms which was also called a “New Era”. Just switch the name Dotcoms for Cryptos and voila, we have another “New Era” 20 years after the first one. “New Era”,  are keywords that come in a bull market just before the stock market starts to turn bearish. . In the end, what we did get was the “Old Era”, bear market and small recession.

The sad part about this news is everybody thinks, that the hedge funds (managed money), is the smart money.  Sad to say, but the media is reporting to you what the dumb money is doing, not what the Commercial traders are doing. It’s the Non-Commercials that chase the markets up and down, and they eventually always get into a trap. Last week it was the Commercial gold traders that closed off their gold short positions and, added to their long positions. Commercial trader activities hardly ever get mentioned in the media, so a one sided reason, just sends fear into the hearts of gold investors,

As soon as the bad news for gold came out, gold soared $20 per ounce.  The problem is, nobody studies gold history anymore, and the herd can’t remember anything as a group, so these cycles happen over and over.  Gold is one of the most cyclical markets on the planet, and the real smart people are the contrarians, buying what so called professional “money managers’, are throwing away! Even the ETF GLD has to sell gold to reduce their shares.

My bet is that when gold crosses $1355, we will read the news about managed money buying gold again. When the emotional investors realize that the stock market and Crypto prices are starting to head down, but gold doesn’t  then what do you think they will do.?

It would be a real pleasant surprise to one day see, gold spiking like Bitcoin has. Most people think price is everything, so when the see the gold price falling they think gold is losing its value. In reality the gold price is going back and hiding in the gold ounce. In 1999 nobody could forecast that a $260 priced gold ounce actually contained $1920 cash.  Right now gold has been pointing down while the US dollar and the DOW have been pointing up. This all looks great for an impending reversal for 2018.

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December, 15,2017, Gold Daily Chart Update

Our recent gold crash, seems it has turned a corner about 3 days ago, and so far so good.  A wild move in both directions is still possible, but if we just finished an “ABC” correction, then gold, “Must not”, fall below July 2017 lows.  From the July 2016 peak of $1375, gold also created a deep zigzag crash, which eventually must get retraced. Now from the 2017 peak, we have another zigzag looking crash, which “must” also be completely retraced. To say the least we have an interesting setup for gold to rally well into 2018 or longer. 

We have higher lows, through much of the bearish phase, which is a sign of a bull market. “C” wave bull markets can extend past any realistic expectations, because bandwagon jumpers just love to buy high, thinking that a greater fool will take these assets off their hands. We are not anywhere near this euphoric stage, so we have a long way to go, before the big bullish scenario has completed. 

We have two major price hurdles for gold to cross next year, which is the $1355 and $1375 price levels. 

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Gold Intraday Bottom Update

Gold hits a bottom at the $1237 price level, and has now started to charge back up. I use the smallest three degree levels to start with, but over time will adjust as each degree level starts to materialize.  In this case I would need 5 waves up in Minute degree, so I make a rough calculation in what I think I may need. For now we have come off a wave 2 in Minor degree, but this may also get changed. The big thing to remember is that gold is in a bigger bull market than what we can imagine at this time. No, gold is not going to $5000 $10,000 this trip! Gold is very cyclical 

Nobody has the patience anymore, to play these bull/bear cycles, but when gold goes vertical like a Bitcoin, then you will see investors jumping on the gold band wagon.  They just love to buy high in a cycle and the contrarians love to sell to them.  The gold bullish cycle could last a lot longer than I originally was thinking, but if 80% or more of my indicators show up earlier than expected, then we have to have a serious second look. 

Gold is a hedge for inflation, so when we forecast the price of gold to go up, we will see inflation numbers rise as well. To make gold work as an inflation hedge you have to buy gold “before” it starts on a bull market, not after everybody has already jumped in. 

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