=============ChartsEdge's forecasts have been pointing upward for a few weeks in a row, and it was working well until gold hit the 1000 mark on the $GOLD chart. As my readers here also know, we had that as a C=A number if the 681 low was a truncated low. That 1024 number annotated onto my goldl chart was only if the 681 low was the right starting point for a C=A analysis of the larger (B) wave up. After falling from 1000, gold dropped like a chunk of bullion, testing hard onto my channel trendline. Its move up from that hasn't been convincing yet. Gold certainly had its opportunity to move to 1024, or the higher levels at 1167 or 1192. Now the ChartsEdge forecast for this week shows it re-testing up toward the 1000 mark again.
Assuming gold can vault up as shown (and it almost needs to, or risk falling under the channel support line) - will gold investors use this chance to unload into opex Friday (now that so many are playing gold with ETFs rather than the physical commodity)? Or will it be only part of a larger leg up to the levels that gold bugs have been looking for these past months? I counted a 5-wave movement up to the 1000 mark from the level I'd identified as a B wave for the C=A analysis. If gold is to move much higher from here, it would seem to call for the next move to be either a third wave of the C-wave, or of course that it isn't a B wave but something more - meaning a very significant move. We'll see. This should be gold's moment since the dollar and bonds aren't moving up strongly right now. But if my other suspicions are correct, and the dollar along with bonds have more upside in the intermediate future (and probably along with weakness in equities), then gold's time may be running out.
After all, there's the Minyanville "Mr. T Gold Indicator" to think about! See Mr. T Gold Indicator Alert, Fri Jan 30th, 2009 by Kevin Depew at Minyanville. And I'm not kidding, I did see a TV feature about a week or so ago about Mr. T - and gold dropped since then - so I've got to feel more bearish about it! (The graphic at left is Minyanville's "Mr. T Gold Indicator" graphic - when you visit their website, if you see that, you should be able to click on it to see Kevin's articles about it. Very funny and makes you think it might even work - especially given my experience of the past couple of weeks.)
So let's not lose track of the idea that gold may be completing a (B) wave up. In which case it will not only fall out of the uptrending channel on my gold charts but also drop to very much lower levels. If it gets under 681 then one of the numbers projected is the 1.382 extension of its drop from 1033 to 681, or approximately 546.50. If the C-wave idea is valid, then lower levels would also be possible; for example, losing one-half of its value from its high at 1033 would be about 516-517. The 1.618 extension of its drop from 1033 to 681 would be at 463.46. Losing fully 61.8% of its total value from 1033 would be a loss of 638, or 394.60. Numbers like these are good reason not to be complacent about where the value of gold may go.
There do remain more bullish prospects for gold, even if it were to lose the uptrend channel line. If the idea annotated onto my weekly chart of gold is correct, that it completed a 4th wave and can be working on a 5th wave, it remains possible that a pullback would be simply a second-wave (or b-wave) pullback from a leading diagonal. (I'd call it a leading diagonal because within my uptrend channel, there was overlap of the waves that I'd count as the 5 waves up.) (Also please remember, I'm talking about Elliott Wave so have placed that label onto this post, but my default label refers also to Tony's OEW and I don't know that Tony has the same view of alternative EW counts in gold.) But I don't want to speculate too much on the Elliott Wave counts for gold yet. Let's see what it can do this week, and whether it can remain above the uptrend channel line for now.
So let's not lose track of the idea that gold may be completing a (B) wave up. In which case it will not only fall out of the uptrending channel on my gold charts but also drop to very much lower levels. If it gets under 681 then one of the numbers projected is the 1.382 extension of its drop from 1033 to 681, or approximately 546.50. If the C-wave idea is valid, then lower levels would also be possible; for example, losing one-half of its value from its high at 1033 would be about 516-517. The 1.618 extension of its drop from 1033 to 681 would be at 463.46. Losing fully 61.8% of its total value from 1033 would be a loss of 638, or 394.60. Numbers like these are good reason not to be complacent about where the value of gold may go.
There do remain more bullish prospects for gold, even if it were to lose the uptrend channel line. If the idea annotated onto my weekly chart of gold is correct, that it completed a 4th wave and can be working on a 5th wave, it remains possible that a pullback would be simply a second-wave (or b-wave) pullback from a leading diagonal. (I'd call it a leading diagonal because within my uptrend channel, there was overlap of the waves that I'd count as the 5 waves up.) (Also please remember, I'm talking about Elliott Wave so have placed that label onto this post, but my default label refers also to Tony's OEW and I don't know that Tony has the same view of alternative EW counts in gold.) But I don't want to speculate too much on the Elliott Wave counts for gold yet. Let's see what it can do this week, and whether it can remain above the uptrend channel line for now.
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