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.