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Hi D!
Here is my favored HUI count. Pullback to HUI ca 140 - 150ish which lines up with the wave 5-2 of an extended 5th wave. There are so many charts that look like this it is unreal.
cheers,
john
Hi D!
I don't know if the HUI will get there, but I will wait to find out. I'll also add that if you take the 2003 rise as an extended fifth wave (think GSC, CDE), then a pullback to wave 5-2 (ca 145 - 150) is a typical retracement. If this happens, I think it is a great buy point.
cheers,
john
Hi D!
Hope you are having a nice weekend. I really enjoy exchanging posts with you. For one you are a believer in the gold bull, and 2 you are a waver. Not many of those around where I troll.
On gold, do you remember this article and chart by Eric Hommelberg last year? It was a great call and projection.
http://www.gold-eagle.com/editorials_03/hommelberg071803.html
Although this is not Elliott, the idea is that gold puts in a big "A" wave followed by smaller waves B,C,D. The cycle then repeats.
So the question in my mind is: Was the April top the end of large "A" up?. If so then we are in wave "B" down or did that end at $371. Using Eric's method, the "B" wave is always the largest relative to C and D, but only a retracement of A.
Note that last year gold shares started their strong rise as we completed the "D" wave in Aug. 2003. So by this, the strong rise in gold shares won't happen until later this year. However, a good LT entry was when the "B" down completed in April 2003.
Any thoughts on this? I have looked around but have not found an update by Hommelberg on this "take on gold".
cheers,
john
Hi again,
I think the USD is ready to rally. The target for the move can be anything from A=C or some fib. The problem for gold ST is in these charts.
The USD looks ready to rally along with interest rates and the yield spread continues to tumble (ie less liquidity).
I'm not a big fan of shorting gold stocks, but I think I will continue to focus on the Nasdaq (ie shorts) in the coming weeks.
cheers,
john
On CDE, the chart looks so similar to GSC.TO
I did really well last year with this stock (started buying at $1.55 in July). Now I am wondering where to buy it again. Everything here says targets are lower. $2.00??
cheers,
john
Hi D!
The trendline on GSC.TO comes in at about $5ish. If it is an extended wave, targets for a correction are typically the 2nd wave low of the extended 5th wave move. So about $3.00 by my take.
I wonder where this next move lower will take things. All depends on whether gold did a "B" wave up from $371 IMO. Tough read and standing aside.
cheers,
john
Hi D!
I agree that if the GSC triangle completed as a 4th wave (of A wave down - I don't know at this point?), the 5th wave in progress should complete around $5.00 CDN as a measured move. That is one setup I will look to buy. But how much room do we have before a channel is redefined?
Note how CDE broke down as well. Could see that coming. Lower trendline target now.
The more I look at charts like these, I see the entire 2003 move as an extended 5th wave. Not good if true.
cheers,
john
Yes, the GSC chart does not look bullish in the IT. But a triangle pattern in a 4th wave position is always telling. The 5th wave bottom being the buy! Big question is this at the end of an ABC correction or not. Gotta think it is, but I have been wrong too often lately.
cheers,
john
Hi D!
Well so much for breaking $409. I think I will sit back and watch for a while now. My next entry will be CEF some day, but not sure when that entry is coming. If that was a "B" wave for gold, yeesh I wonder what is in store. I still got my gold and silver bullion and may add some Maple Leafs when in Canada next month.
Do you remember how gold tested $320 in April, rose in the summer and then came back to $345? That was the big buy for me. I wonder what happens this time around.
cheers,
john
Hi D!
Typically, in leveraged markets like gold or commodities, extended 5th waves are much more common than extended 3rds, and even more so than 1st waves. Thus it is very unlikely that the entire wave up from the 2001 is an extended 1st wave of an impulse.
I'm a big ewave "look" or pattern guy, and glancing at those schematics makes me think that we may well have had an extended 5th wave from the '03 lows. If so the retrace target for wave 2 down is the bottom of wave 5-2, or about HUI 140.
What bugs me is if you the look at the first and third waves up of the 3 yr bull leg, both waves 1 and 3 had extended 5ths IMO. But the 5th wave did not it seems. It should have been a blowoff top in that case and extended itself. Maybe it did but I don't see it. This kind off fooled me into being too long early this year as I thought a blowoff should have ended the move.
I find counting waves quite difficult in this sector versus general stocks. It is the extensions that are frustrating to identify in real time. Much easier to spot them in retrospect.
I'm off golfing for 3 days starting Wed. I'll see you when I get back.
So what do you think? Gold to break above $409 this week?
cheers,
john
Hi D!
I wrote this initially:
"I would not count the rise from the $370 lows as 5 waves up. The 5th wave always brings in divergence (except for extended 5ths), and we have not seen a lower high on the MACD. This is how I tend to count waves where 3rd waves put in MACD highs and 5th waves present divergence. Maybe it is different for leverage markets like gold though.
So this is something else IMO and I expect gold to take out $409 some time soon. Beyond that I would not care to project."
Then having looked at the gold chart further, we could be finishing up and ABC for a "B" wave. The $409 level tells all this week.
cheers,
john
Hi D!
Assuming we had an impulse from the 2001 lows, I quote from a set of EW rules at Cycle Pro:
"The maximum time for Wave 2 is nine times Wave 1".
Hmmm...
Also as you know, wave 2s cannot be triangles and they must retrace a minimum 20% of wave 1.
The only really bullish alternate from here is that the gold indices along with gold subdivided into 1,2 waves. If not, we get a lot of chop going forward. That is why I will not really load the boat again until we clearly breakout (particularly the (HUI:GOLD ratio).
cheers,
john
Hi D!
Looking at the MACD indicator on the gold chart, there looks like more upside to this move as we don't have much divergence yet with gold just hovering below $409 (62% retrace of leg down). So we probably go higher, but how high? And of course then what?
cheers,
john
Hi D!
I had a good look at Petch's work too. I assume his longer term count and how he arrives at it is grounded by the clear 3 wave type moves off the lows in May. If we break to test the highs or exceed them from here, we get what is probably a running flat correction. This would be really bullish of course for the LT. It certainly looks like we got a wave 1 top in Dec./Jan. The issue now is for wave 2 to complete in price and time.
I don't understand the triangle he has shown as part of this complex correction for the LT count, but the implication is there will be a fair degree of chop ahead until the next leg up resumes. It could also mean another wicked head fake if a "C" wave down were to occur.
I really want to load up when the 3rd wave delcares itself. But when is going to be the big question.
cheers,
john
CEF is sporting a clear triangle (4th wave or B wave) of this decline from April's top. At one point I had about 500k US parked in this as if it were a money market fund. This was one of my first major sells in April and am now flat CEF.
If you are really bearish, then you would count this as 5 waves down from the top near complete. The more bullish count would be this triangle counts as a "B" wave with a "C" wave about to begin for an ABC correction off the $6.50 high. Note how in the previous 2 tops a wave "B" formed with a lower RSI, then the rollover began in wave "C" with another trip down in the RSI. Are we at the same point here?
Whatever this conslidation is, it appears to have 3 wave movements, and thus one would think the low is not in. Triangles like this can reverse up and mark major bottoms too though.
The Euro is at the apex of a triangle if you connect all the recent tops and the 3 year uptrendline. Decision time is at hand for currencies. I also note that the $CDN is perking up. But is this about to put in another IT top?
cheers,
john
Hi D! I see talk of triangles in your post. I see it too as a strong possibility here as suggested by poster "bearvest" at CapitalStool. It implies a lower low too (5th wave). I'll be glad when this is over. I currently hold a relatively small miner position and mostly physical (gold & silver).
cheers,
john
Hi D!
Henri's count is interesting and implies another 4th wave correction here. The question is what degree? Mathias shows an interesting LT count, but this is dated somewhat. My take is that we are in the second 4th wave correction for the Euro from the 2001 rise. That should take us back to the trendline channel of a larger channel at least (target 1,12?). There are higher targets for the Euro though.
Nice dump in the PMs today. I was looking for that. One more high coming later this week? Gut feel says this coincides with a general stock market top and USD bottom. I'm not doing anything right now and will probably short the NDX when we see some confirmation of a sell. And I'll watch the Euro/USD closely too.
cheers,
john
The Euro IMO, will provide clues to the ST metal movements. It is sitting right on its 3-year uptrendline and could break down out of the channel at any time. If it does (Mathias' alternate blue count), we won't see a bottom in the metals until later this summer. If the Euro breaks out here above recent resistance (1,22), then a retest of the highs for the Euro and gold will come sooner. I can't see the red count happenning, but I'll wait to see which way it goes.
http://www.wallstreet-online.de/img/news/026/41/33
Tim Ord had a live chat discussion last week at Traders-Talk. When asked if he watched currencies vs. the miners, he said no he does not consider currencies when trading metals. That surprised me. But you can bet that if the USD index rallies here, gold and the miners will do nothing much. And since the Euro is at least 50% weighted in the USD index, the Euro is worth tracking.
BTW - How does one post an image here?
cheers,
john
Hi D!
I know these posters from Stockhouse Canada Bull forums. A very good crowd to play the Canadian juniors. I'll sign up there today. My immediate thoughts are on currencies and in particular the Euro vis-a-vis the metals. I'll post comments shortly.
cheers,
john
Hello D square,
I'm finally here. I don't have time to post that much tonight, but I just want to say keep posting as I read much of your Elliott wave stuff.
In the short run, I see an important top coming in anytime from today into next week for the gold miners. I'll try to go indepth on the weekend if I can.
cheers,
john