Thursday, July 16, 2020

Weekly GOLD - Interim Report

I often get questions on the GOLD market. The only thing I track are gold futures, but that count is not too hard to decipher if we use the principles of degree labeling. The weekly chart is below.

GOLD Futures - Weekly Nearest Close Only - Primary [ B ]

So, within the Primary [ B ] wave up, there appears to be three distinct waves. They are Intermediate (A), (B), (C). In order to have confidence in the pattern, the principle of degree labeling states that all of the sub-waves of (C) must be smaller than the Intermediate (A) wave that started the pattern.

As you can see, when counted in this manner, then Minor 1, 3, and 5 which head in the same direction as Intermediate (A), and are smaller degree waves than (A), are indeed smaller than Intermediate (A). Unlike certain large Elliott wave firms, I can not find a (W)-(X)-(Y) pattern that fulfills this requirement. That is because 1 + 3 > (A), and that would violate degree labeling.

This means Gold is likely in the Minor 5th wave up, and it may very well end as an ending contracting diagonal which is currently trying to peek up over the parallel Elliott trend channel. The MACD is on a higher high, and that typically only happens within a "(C)" wave.

From a time standpoint, it should be noted that since Intermediate (C) is 'longer in time' than Intermediate (A). This means that the two waves 'must' be of the same degree or the (C) wave must be of a higher degree. From a degree standpoint, note that Minor wave 4, down, is shorter in both price and time than Intermediate (B), and it's subwaves are shorter than their higher degree waves in the downward direction, as well. For example, within Minor 4, then minute ((c)) is shorter than Minor C of Intermediate (B), down.

Readers of this blog should attempt to count the 5th wave higher for their practice and education, and to share with others if they see fit.

Have an excellent rest of the day.
TraderJoe

11 comments:

  1. Superb analysis. The end of this uptrend should coincide with indices top.

    ReplyDelete
  2. As you say all the time, abc is 123 until more data comes in. I personally think the beginning of 2016 was the end of the correction, wave 2, now we are in in wave 3. We will not know until we see what happens after this current upward wave ends, but my thinking is based partly on the very long term charts. I have not seen your long term count so i have no idea where you put us currently. One reason to think gold’s current move is the real deal is that the dow/gold ratio has clearly turned down after forming a beautiful h&s top with a perfect retest of the breakdown, and failure. It is hard to see how dow:gold continues down substantially with gold crashing in a c wave. All the other major segments of the dow gold charts for 100 years has had one or the other strongly moving to the upside, while the other went down or at best sideways. No segment had both going majorly down at the same time.

    I have the 1970s as wave 1, and the 1980-2000 was wave 2. Wave 3 began in 2000. In the 70s the move had 3 main parts(though it is a 5 wave move, i prefer to consider 3 main pieces). 1970- 1975 up 6x, 1975-1977 down about 45%, 1977-1980 up fib 8x. For the current wave, 2000-2011 up 7.5x. 2011-2016 down about 45%, now in 3. It is possible however that wave 1 ended in 2008 and then there was a running flat, and that is the only count that can work for silver. It is certainly possible for gold to have a longer, even more complex wave 2 that is still ongoing. However, i see no particular reason to keep adding corrections ad nauseum, the current correction was adequate in time, and percentage wise it closely resembled the 1975 correction, both near 45%. The 1970s wave 2 was shorter than its wave 1, not a problem to me. I personally expect this move to at least exceed wave 1 so >7.5x from the bottom near 1045. I have additional reasons outside EW to suspect we are in an impulse here. Thank you.

    ReplyDelete
    Replies
    1. I put us in Primary [B] up, which implies Primary [A] at the lower left, and Primary [C] to come down to the lower right.

      Delete
    2. In case anyone is still interested in the topic, if you look at the miners, hui, i think the picture becomes clearer. They had a textbook expnaded flat from 2008-2016. The correction was about 85%. Could that have just been an A wave? I guess anything is possible, but I think 8 years and 85% is quite adequate for a correction, no further correction is needed. Second, the upward move in hui since 2016 has had 2 impulsive, flag pole type moves, with a correction in between of about 78%. A “B” wave in a zig zag should not exceed 61.8% retrace, but pretty normal for a wave 2, especially as it suggests a explosive 3rd wave, which we are now in. I think this is further evidence that we are now in wave 3.

      Delete
  3. Morning Joe
    Sure gold is technically over bought on a short term basis, Im in it for a much longer time frame than a few days, weeks, months. Take a look at where GDX is trading current, then look at where GDX traded 2011 when gold was where it is now, IMO GDX very undervalued compared to gold, I like the miners and gold itself. I have a few of the 1 ounce bars I bought 30+ years ago and have no plans on selling. I continue to wonder what happens when central bank influence is no longer considered a positive. Will fundamentals then matter? Have a great day, be well :)

    ReplyDelete
  4. Here's the intraday wave-counting screen for the ES 30-min with daily pivots and nearest fractals.

    https://invst.ly/rh7s6

    TJ

    ReplyDelete
  5. Tj general question in a triangle can c be lower than a. I thought it was against the rules but i have seen some ew sites label a triangle where a ended higher than c. Thks

    ReplyDelete
  6. Is it possible that the x wave concluded at the June 29th low, and now we are in c of y?

    ReplyDelete
  7. There is a new post started for the next day.

    ReplyDelete