Gold Price - Where is it heading?

[wavepicker]

This post is for TA people only

The following is a chart of the PHLX Gold and Silver Sector in the US.
It gels very nicely to the analsysis made on spot Gold some weeks ago before the current leg down began:

https://www.aussiestockforums.com/forums/showpost.php?p=284834&postcount=4035

This is a texbook completed impulse, they don't much better than this. Statistically speaking wave 2's or the abc correction usually retraces 38.2-50% of the whole advance. Many times however it is 61.8%. A good guide line is the span of the previous wave 4. These are approximate levels only. But judging from these figures this sector has much further to go down. These charts show great confluence.

 

[wavepicker]

Current ΕW musings for NCM secular trend. Missing the impulse of the early 1990's so have hand drawn lines. Expecting further weakness for green wave a of primary cycle red 4 to complete. Secular trend is still up and this gels nicely with Golds secular bull prospects but we are currently in a long term wave 4 which has a high probability of trending sideways since red wave 2 was a sharp decline(law of alternation)

 

[barrett]

Hello Treefrog, Wavepicker,
Defining a run for the purposes of drawing in Fib retracements, shouldn't the run be defined by the very extremes of the price move?
Thanks

 

[>Apocalypto<]

Hello Treefrog, Wavepicker,
Defining a run for the purposes of drawing in Fib retracements, shouldn't the run be defined by the very extremes of the price move?
Thanks

nice point Barret,

Tree frog Wavepicker could either of u clarify this?

I always thought the fibb retrace was made from the extremes.

In the below chart I am measuring the current run that is now retracing.

 

[wavepicker]

nice point Barret,

Tree frog Wavepicker could either of u clarify this?

I always thought the fibb retrace was made from the extremes.

In the below chart I am measuring the current run that is now retracing.

Hello Barret, Apocalypto.

I use price fibs in terms of Elliott Wave Analysis and the structure of the waves relative to each other. We are also measuring retracements relative to COMPLETED impulses(an impulse is a fib; 5 waves, a retrace is 3 waves also a fib) at varying degrees of trend. In the case of NCM for example, I am measuring the retracement red wave 4 relative to red wave 3. One can also measure extensions relative to other wave structures i.e. wave 5 relative to wave 1 and wave 5 relative to wave 3.
Other ways of using fibs is making extensions from various origins and looking for clusters of hits of fib numbers relative to each other. I have many other uses for fibs which are not conventional as well which I won't go into detail here because it is too complex i.e additional fibs such as 0.886,0.707, and 0.941. We can start a new thread for this.

I understand there are other ways of using fibs, treeefrog has demonstrated quite a few of these, and perhaps he can expand on his methodology or give some examples.

Cheers

 

[Kauri]

nice point Barret,

Tree frog Wavepicker could either of u clarify this?

I always thought the fibb retrace was made from the extremes.

In the below chart I am measuring the current run that is now retracing.

Agree with the way you see it Apocalypto... also that one of the secrets is to identify these points prior to them forming... most people seem to find them once they have formed, not a lot of value for trading.

Cheers
..............kauri

 

[wavepicker]

Agree with the way you see it Apocalypto... also that one of the secrets is to identify these points prior to them forming... most people seem to find them once they have formed, not a lot of value for trading.

Cheers
..............kauri

Pretty fair comments. I suppose it's a mtter of finding your potential fib turning point targets and then narrowing them down to which might be the highest probability ones.

Sometimes you can end up with quite a few potential price clusters. Personally, I have had more like with using fibs in terms of time than price. but that is just me.

Magdoran makes very good use of Gann expansions and retracements in his work and this is the best price analysis I have seen. Uncanny how price vibrates through his ranges.

Cheers

 

[refined silver]

Wavepicker, Apolcalypto et al, at what point would you suggest the $690ish target has been missed and was wrong?

I know some have suggested a small bounce, so at what point does the small bounce become a reversal?

 

[wavepicker]

Wavepicker, Apolcalypto et al, at what point would you suggest the $690ish target has been missed and was wrong?

I know some have suggested a small bounce, so at what point does the small bounce become a reversal?

Assuming we get a bounce here that continues to rally, either when 75% of the range has been exceeded or wave structure/pattern dictates.

Now I throw a similar question back to you, how do you know when your current forecast for the run to $1600 will not start to happen at this support level? Surely not when price reaches 600-700, as it it might be too late then?
Market has already retraced $200 from the peak, when will you say "something else might be happening at this juncture, I might be wrong?"

 

[>Apocalypto<]

Wavepicker, Apolcalypto et al, at what point would you suggest the $690ish target has been missed and was wrong?

I know some have suggested a small bounce, so at what point does the small bounce become a reversal?

I am not a Elliotition so I can not post any thing on Wavepickers behalf. This are my thoughts

If the price makes a higher low that is a sign to me that the down move has hit a hiccup. as a guide a bounce off a fib point also adds to the lower high. one thing i look for is were the new rally gets to. does the high enter into the previous support zone or dose it start to fail below it that gives trend a normal movement.

bounces fail when they start to sell down again. If it stops and starts to buy back up then u could say it's found support and it's formed a lower high (bullish) common in fast moves down are impulsive retracement up that are very strong and vertical once they fail they sell down faster and a break of the low confirms to degree that the move down is continuing.

I have put in three technical ideas I have for Gold. the support it's sitting on now and the area it made last support hold alot of sway for me. time is needed to confirm each idea. I see a bounce coming on Gold and on the EUR/USD but I still lean towards more selling to lower lows. time will tell.

1. trend up resumes.
2. trend cont down.
3. trend cont down.

like i have said before I don't trade like this any more, so this is just personal analysis.

 

[treefrog]

Hello Treefrog, Wavepicker,
Defining a run for the purposes of drawing in Fib retracements, shouldn't the run be defined by the very extremes of the price move?
Thanks

Hi Barrett,
Yes it should. But do you plonk your charts on monthly bars and sit around waiting for confirmation or do you use a shorter timeframe and trade/watch the in between runs when exhaustion tops become apparent or the recent dip starts stalling at 50%.

eg the current gold run can in hindsight be seen to have started apr 2001 but back then it was not so apparent.
my own assertion is that if a clear run retraces more than 50% then that run is negated as a usable reference run for looking for further opportunities from it.
It does not mean the overall uptrend is finished - uptrend rules still apply - if it is still making higher hi's and higher lows the retrace levels can be whatever for that uptrend to be intact.
Gold atm is still in a clear uptrend; and on the weekly chart there has yet to be a more than 50% retrace on the main gold run since those first two nervous starts in 2001. Just check out the 50%ers - there are many gold seems to love them.
In fact put the current retrace on the weekly since apr 2001 and it does not even account for a 23% retrace as yet - I regard 50% as a fair dinkum retrace of the relevant run so the gold bull is just getting stronger for mine.
In fact, much of the debate stems from people continuing to use the daily or weekly chart when they should switch to monthly bars/candles or even quarterly or yearly over the longer periods - the monthly being needed to get things in perspective/proportion and avoid "the sky's falling", "no it's not" "yes it is" debate. Un less of course we are trading/investing fibs then the weekly is hard to beat.
In the first chart here, gold had its start from apr2001 and retraced more than 62% (blue) so for mine that run start point was no longer relevant - at that time the run had been negated
The start of the next run(purple) - aug2001 also retraced more than 62% so I would no longer place significance on either or both of those - BUT an uptrend has established - significant
The next run (pink)starts dec2001 ends feb 2002 (that is all the info you have at that time) but it only retraces 50% indicating strength established and the start point is still valid so the continuation of that run gives a total run from dec 2001 to jun 2002 (red) and retraces 50%
that makes the continuation still with a valid start of dec 2002 (orange) which also retraces 50% before giving a green valid (overall) run from dec 2001 to the first hump of the DT in 2004
now the issue becomes at what time do you switch charts to monthly bars?? - subjective but soon I would suggest if an investor.
but it all depends on your timeframe
I don't presume to tell investors how to view the stability of their investment but to me I think things are more relevant after two years on monthly bars IF you are a long termer.
If medium term stay with the weekly bars, and keep trading the runs within the overall run with the frequent fib retraces.
My key point is: the more obvious the run the stronger the chance of a regulation retrace.
Oh and before you start arguing about the original start point, when u put up the monthly bars, the starting point sometimes moves but remember it has become less relevant at this time to weekly charts and you still are unsure where the end point is anyway (are we expecting world financial stability after it gets to $1600???)
The thing to be aware of (in a "background" sense) as a lengthy run establishes, more people start looking for retrace points and they (key fib levels) therefore become more likely: day traders + week traders + MT investors + LT investors + fundies all looking for obvious fib levels - so the pygmalion effect enters the equation: remember gann, elliott, and others have their followers added to the mix all using fib levels
And yes I would agree (as we look back now) the start point was april 2001 and No, I didn't pick it - the runs within the LT run I find easier to see.

 

[refined silver]

Thanks for the replies.

In answer to wavepickers question when do I (we?) question the move to $1600, one very important point is often overlooked on this thread.

That is, some are playing the gold price through futures, some are playing it through shares. I think most of the long term bullish camp are playing through shares, hence, a $200 setback is par for the course, and doesn't cost any money, if the shares are not margined. For the trader playing futures however, there is a huge difference. To hold for a long drop means wipe out (if it was a bet on a rising price). I think this is not understood, so traders get frustrated with share guys for not getting out, and seemingly being perpetually bullish, share guys on the other hand struggle to understand the antics of futures traders who always seem so antsy, and change opinions at the drop of a hat, and seem to have no conviction about where the market is headed.

That said, in answer to your question, I would be very very surprised if it dropped under $800, but would still hold even down to $690 as am still convinced of the fundamental long term bullish case for gold. I will sell when the fundamentals change.

 

[treefrog]

This post is for TA people only

The following is a chart of the PHLX Gold and Silver Sector in the US.
It gels very nicely to the analsysis made on spot Gold some weeks ago before the current leg down began:

https://www.aussiestockforums.com/forums/showpost.php?p=284834&postcount=4035

This is a texbook completed impulse, they don't much better than this. Statistically speaking wave 2's or the abc correction usually retraces 38.2-50% of the whole advance. Many times however it is 61.8%. A good guide line is the span of the previous wave 4. These are approximate levels only. But judging from these figures this sector has much further to go down. These charts show great confluence.

there ya go team - ta WP,

the point I was making about better appreciation on monthlies when we start talking years

 

[explod]

there ya go team - ta WP,

the point I was making about better appreciation on monthlies when we start talking years

Thanks for you charts and commentry Treefrog. What I could see but without the ability to explain. But on my hand drawn chart on the wall it has been that way all the way. The next one when it starts could go to $2000 and retrace $900 as it looks like exponential volatility from the beginning. $30 moves in a day are now common when in the beginning we were excited over a $5 move.

Interesting times.

 

[barrett]

Thanks guys... here is a Fib retracement and expansion chart for the whole bull market.. it's interesting how often the Fibonacci numbers crop up isn't it, especially on the second chart..

On both of these charts would people say there seem to be Fib support levels here that could cause at least a short term rally?

weekly linear ..can't do log..

 

[wavepicker]

Thanks guys... here is a Fib retracement and expansion chart for the whole bull market.. it's interesting how often the Fibonacci numbers crop up isn't it, especially on the second chart..

On both of these charts would people say there seem to be Fib support levels here that could cause at least a short term rally?

weekly linear ..can't do log..

Thanks for the charts barret. On your weekly chart with all the fibs, the last consolidation level between May 2006 and Aug 2007 and Ranges between 730-542 is the most important pattern for:

1/ Being labelled as a wave 4 sideways pattern and these always precede the last move in th market. In commodities the ensuing wave 5's are usually blowoffs and extend as has happened in this case due to buying more fear based than hope based. So you know from this pattern there is one last leg up left on your impulse and thereafter the trend might be at risk.

2/ They serve as a support level for the bear market to end more often than not. If I've seen this once then I have seen it 1000 times. Now this wave 4 range of 730-542, the market USUALLY but not always reverses at the lower end of the span. But this is only a guideline. In this case drawing in our fibs, you can easily see that the 3 fib ratios that fall into the span of the consolidation are 0.382, 0.50, and 0.618. More than likely the market will find support and reverse at or near one of these levels.

It could be 0.382 at $730 that is the minimum requirement for me, but statistically it will be at some point between 0.382 and 0.500(730- 641) with a lower probability of 0.618 or 550.

This is a textbook impulse in Gold and Silver. Most of the time they are I commodities, that is why I like to trade them.

There will be a "b" wave rally on the way down, and this will be a sucker rally as most of the bulls will feel safe the uptrend has resumed. It might be starting now, my cycles envelopes say a rally is due to start this week.

A good time to sell at the peak IMO, because as Apocalypto mentioned, if we get a lower high from this rally, that would be your que to sell IMO.

 

[Uncle Festivus]

So UF we all given our prices why don't you gives us your direction and a price target of where u think Gold is going next?

My trading target for today is $865 by 5pm for my long. A clear breach of this channel then a reset of the stop to this value. Failure then back to low $840's?

 

[barrett]

My trading target for today is $865 by 5pm for my long. A clear breach of this channel then a reset of the stop to this value. Failure then back to low $840's?

With you on that trade UF, I'm not in yet, but it looks like the breakout was confirmed on the hourly... just waiting for the pullback to finish

 

[Uncle Festivus]

With you on that trade UF, I'm not in yet, but it looks like the breakout was confirmed on the hourly... just waiting for the pullback to finish

Yes, it may have a bit in it - where to put a stop in this kind of volatility? . doh! just hit 864.5 again!! Maybe the new support?

Just playing with charts for DOW & gold - gold in descending wedge (eventually bullish?, looking for a big break out?) DOW in last stage of ascending wedge (bearish? looking for ? more ppt intervention )

 

[barrett]

I'm in at 866 it looks like the pullback is over..