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GOLD - Realtime Prices by BullionVault.com 

Gold price chart by BullionVault.com - Click for live prices

Gold - May 30,2008

Chart: http://www.stockcharts.com

           Another classic example how Median Lines & Fibonacci Fanlines work together.
This is a powerful tool to analyze markets behavior and market direction.

Elliott Wave Analysis

On November 7,2007, ELLtoday presented a chart of Gold and said, the recent high of $830 is accompanied with a terrific 92% bulls reading but the market kept on going higher. At the close of last Monday's session, only 4% of gold traders were bearish, which means that the average long had a whopping 24 times the size of position as the average short (96/4). At the same time, The Wall Street Journal instructs investors on "How toSurvive The New Gold Rush." 

New? Gold has been rallying for 8 years (!). The 96% bullish extreme means that very few are left to
push gold higher. This sentiment fits perfectly with the wave structure, as prices are completing the 
final subdivisions of a five-wave advance from August 1999. We're going out of Gold and quit our
long position on Monday, February 4, 2008, officially. 

GOLD - $1000 USD

© ELLIOTT today, November 7,2007

Chart: Futuresource.com

  [Details only to subscribers !!!]  

Linear Extrapolation: "Predicting" the Present

Trend extrapolation is the crudest form of technical analysis, and it is employed by nearly all conventional
analysts, though they rarely realize it. Mainstream social and economic forecasting has forever been a
practice of extrapolating present and recent conditions and trends into the future. More specifically, apparent
predictions are simply (1) descriptions of present conditions (2) multiplied by unconsciously calculated moving
averages of the trends of those conditions. Obviously, in a changing world, this approach is doomed to fail.
Because of this practice, both economists and futurists in general have always been notoriously optimistic
at tops and pessimistic at bottoms, producing highly inaccurate forecasts of coming events. Now we know
why. Because the forecasters have no reliable basis upon which actually to attempt a forecast, the prevailing
social mood has full rein to affect the tone of their conclusions. The stronger the mood, the stronger their
conviction, the more inventive their rationalizations, and the more extreme and confident their extrapolation.
This means that the closer the social mood gets to the point of change, the greater will be conventional
forecasters' convition that it will not change, and the further into the future will be their extrapolation. 
(The Wave Principle of Human Social Behavior, 1999, Robert R.Prechter)

 

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GOLD - Walks The Line

© ELLIOTT today

Count#2
 First presented on November 11,2004
Updated December 30, 2005, April 7, 2006, November 2006

  Gold, Nov 22,2006

Chart: Futuresource.com

This is the chart and the Elliott wave commentary of May 5, 2006:

 

Weekly Update

GOLD, 
(c) ELLIOTT today, May 5, 2006

 

 

Chart: http://www.stockcharts.com

It was 18 months ago that ELLtoday published a EW-labeled chart of Gold and made the following statement: 
"If Gold holds above $370, a flat correction can be counted for wave (4) and another advance in wave (5) should follow." (ELLtoday, Nov 7, 2004). Since then, Gold rushed up into the top of Intermediate wave (5) at $673.00. The million-dollar question: "Will Gold Hit $850?", which is the price-high of 1980 or will it correct the recent rush by say 50% measured from the low of $371.30 in 2004. On the very short term picture, Gold seems to respect the rising 2x1 GL drawn from the low of $340.60 and as the long-term chart of April 29, 2006 shows, Gold seems also to respect the rising 2x1 from the low of 1976. Recent sentiment pictures display a high bullish bias toward Gold, which in the past was always punished by the market. Despite all the sound and fury of the past two months, gold has been rising orderly according to my GOLD Fibonacci chart, presented on May 3, 2006. As you can see, the price of gold at its recent high has exactly managed the decline of the first A-B-C (-423 points). Prices cut through the important overhead resistance level of $500 ($511 and $507 exactly) the point marked Minute wave (iii) of Minor wave 3 on the chart. As you can see on the Gold Fibonacci chart, $511 exactly cuts the rise from $250 into the "Golden Section". 

Historically the seasonal cycle averages about 11 months in duration. Given that the last three seasonal cycles bottomed in May of 2004, January 2005 (deepest oversold reading in the RSI) and December 2005 the next 11 months cycle low is scheduled to occur in November of 2006. 

The alternate count labels the recent high as Intermediate wave (3). If so, wave (4) and (5) have to unfold over the summer of 2006. With a five-wave rally from the August 1999 low nearly complete, we can turn our attention to the upcoming multi-month correction. The present extreme optimism (86.9% bulls according to Market Vane's Bullish Consensus) has been higher only three times in the past 18 years (!). The last two, February 2006 and December 2005, are part of gold's latest peaking process. The other accompanied gold's February 2003 high, which was followed by a 17% decline. Moreover, gold's rally has captured the fancy of the public. $1000 is now a given target. November, here we are.

Gold- Bull Market
© ELLIOTT today

Count#2
 First presented on November 11,2004
Updated December 30, 2005, April 7, 2006

Chart: Futuresource.com

Measured from the all-time high of 1980 ($850) gold bottomed at $252 in 2001. A Fibonacci 61.8% retracement points to $621-625 not far from recent levels. The wave count shows, this is the last wave of an almost completed Elliott structure. 

Gold- Bull Market

Count#2
 First presented on November 11,2004

Update December 30, 2005, (c) ELLIOTT today

On December 12, 2005, Gold reached an intraday high of $542.30, well above the psychological level
of $500 and well above the preceding highs of 1983 and 1987. Amazingly, the recent top in the price 
of Gold stopped exactly at the Fibonacci 0.618 retracement level of the distance of $720 to $252: 

$720-$252= -468. 468 x 0.618 = 289. $252+ $289=  $541 (+/-1.30)

Many who denounce the idea of order in the markets accept other ideas without personal examination
to determine their truth, especially if an authority has expoused the theory. Once again, R.N.Elliott words ...
"when the fifth of the fifth wave tops out, we need not ask why it has done so. Reality again, will be forced 
upon us," indeed became reality, regardless of what the widespread expressions of "superbullish" mood toward
Gold bullion presented by the media told us. At the recent top, the Daily Sentiment Index pushed to 96% bulls, 
indicating that virtually everybody was bullish on gold. This extreme level of investor optimism is consistent
with a top. "Gold Fever Breaks Out," wrote one newspaper for example. 

On November 7,2004,ELLIOTT today presented three charts, showing three scenarios. Count#2 stated: 

"If the price of gold completed its corrective pattern, a double zigzag correction at $252, the ensuing
up move counts as Intermediate wave (5) of Primary wave [1] of a new bull market. It's interesting to 
observe, that under this interpretation, the length of the second A-B-C is 0.618 times the first A-B-C,
40.7%/64.7%. Under this interpretation, gold is now trading in Minor wave b of Intermediate wave (4).
If Gold holds above $370, a flat correction can be counted for wave (4) and another advance in wave 
(5) should follow." 

Now look at the chart of July 15, 2005. 

 

 

Chart: Futuresource.com>

The initial five-wave decline bottomed at $489.20 on December 21, a loss of nearly 10% in a very short time. This is wave 1 or A as part of an unfinished (Elliott) structure. A Fibonacci 61.8% retracement of that decline points to $521, a 50% retracement will be reached at $515. With respect to the longterm chart, a 0.236 Fibonacci retracement is at $473 and the 0.382 Fibonacci retracement comes in at $431. Interesting enough, if the recent countertrend rally ends at $515, the next leg down will be 1.618 times of the first wave down at $431. 
[52x1.618=84. 515-84=431]. 

Back in November 7,2004 ELLIOTT today also said, 

If gold finishes Primary wave [1] of a new bull market, the ensuing correction should hold above the $300-$325 level and the structure of the corrective moves should be either an (a)-(b)-(c) or a variation. A move above $480 or better $520 will favor the odds that indeed 
a new bull market in gold is in force.

Is indeed a new bull market in gold in force? We do not yet know, after trends lasting months or years,
the dominance of buyers and sellers suddenly shifted and prices reversed course precisely at the extreme 
levels observed in this study. The fact that the longest rally in gold since the 1970s stopped right at the
0.618 Fibonacci retracement as outlined above and well below the important 50% retracement of the
distance $850-$252, which would have been $551, spells caution, at least for the next 3 to 4 months. 

It is imperative to understand that certainty about the probabilities is not the same as certainty about one
specific outcome. Since analysis is based upon price patterns, a pattern identified as having completed is 
either over, or it isn't. If the market changes direction, the analyst has caught the turn. If the market moves 
beyond what the completed pattern would have allowed, the position is wrong, and any funds at risk can be 
reclaimed immediately. Most other approaches, whether fundamental, technical or cyclical, do not allow other 
than arbitrarily chosen stop points, thus keeping risk and frustration high. There are also times when an 
Elliott Wave analysis allows for a number of outcomes, or when there is no clearly preferred probably outcome. 
At such times, forecasting and formulating investment strategy should merely be foregone until the pattern 
resolves and the probabilities shift dramatically in favor of one specific outcome. 
At such times, the probability that a turning point is at hand can sometimes rise to near certainty. 

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Gold- Bull Market

Update, July 15,2005
Count#2
First presented on November 11, 2004

Chart: futuresource.com

Gold Walks The Line
by Brady Willett

Before looking ahead lets first take a look back: The commercials added a remarkable 60,765 contracts
to their net short position for the week ended June 21 (the fourth largest weekly net short addition on 
record),and the commercials added an additional 25,152 short contracts to this position for the week
ended June 28. Incidentally, Grandich and company could not have known about the 25,152 short 
contracts before the alleged 'bear raid' on July 1 (the COT statistics were not available when the bear
raid began). Nevertheless, the statistics told us that the commercials were adding to their net short 
position in dramatic fashion as gold rallied to $434 an ounce, and the only speculation to be made was 
that commercials were padding this position as gold rallied above $440. Suffice to say, the sell signal on
gold was so obvious leading into the last week of June it almost defied mention.

To simplify things: when the commercial net short position is above 40% of open interest expect a sell off,
and when the commercial net short position is below 20% of open interest expect a rally.

 

 

ELLIOTT today, Gold, July 15,2005 

On November 7,2004,ELLIOTT today presented three charts, showing three scenarios. Count#2 stated: 

"If the price of gold completed its corrective pattern, a double zigzag correction at $252, the ensuing
upmove counts as Intermediate wave (5) of Primary wave [1] of a new bull market. It's interesting to 
observe, that under this interpretation, the length of the second A-B-C is 0.618 times the first A-B-C,
40.7%/64.7%. Under this interpretation, gold is now trading in Minor wave b of Intermediate wave (4).
If Gold holds above $370, a flat correction can be counted for wave (4) and another advance in wave 
(5) should follow." 

As of July 15,2005 the price of Gold trades at $420 slightly above the 1x1 Gann line drawn from the low
of 2001. A 50% retracement of the upmove from 2001 to 2004 points to $360 and that is where the 2x1 
Gann line comes in. It is interesting to observe that the length of wave c at $363 is 1.618 times the 
length of wave a and at $355 the entire correction would meet the 50% Fibonacci retracement of $252
to $458. 

As you can see on the chart (left), wave (5) of III is placed at the September 1980 high at $720. That 
count originally was developed by A.J. Frost, co-author of Elliott Wave Principle, Key to Stock Market
Profits, Frost & Prechter, 1990. Frost wrote: "A three-wave sequence took Gold down to $474, and then
a five-wave sequence brought it to its orthodox high of $720 in September. This terminated a five-wave 
sequence from $35 per ounce." (Source: A Philosophy of Markets and the Outlook for Stocks, Gold and 
the Economy, by A.J. Frost, CFA, 1989).

Amazingly, drawn from $720, the Gann lines *) shown on the chart present an interesting picture. Wave B
in 1983 culminated below the steeper Gann line and stayed below that line until 1986. Despite a "spike high" 
in 1987 above the 1x1, prices travelled to and fro the 1x1 downwards until 1990. Wave B traveled toward
the 1x1 again, and ended at $420, near $416 which marks a 0.618 Fibonacci retracement of the distance 
from the low of 1985 to the high of 1987. At $256 prices again met a 0.618 Fibonacci retracement level: 
720 - 256 = 464. 464/750 = 0.618. (750 = $100-$850) together with a 0.786 Fibonacci retracement level: 
750 x 0.786 = 589.50. (850 - 589.50 = 260.50).

Elliott Wave Analysis: From the high of $720 Gold traced out an A-B-C flat correction (EWP, p.36). At $280 
the correction retraced exactly 61% of $720 and 58.66% of the advance from 1976 to 1980 and lasted five years. The following reaction from 1985 to 1987/1988 lasted roughly three years, but most important, traced out another three-wave structure, wave X. Wave X stopped exactly at the 38.2% Fibonacci retracement level of the distance measured from $850 to $280: 570 x 0.382 = 217.74. 280+217.74 = 497.74 (+/-2.26). 
The second A-B-C formed a simple zigzag correction with the length of wave A and C about equal, each 160 points. Wave B retraced 50% of Wave A and ended at the 0.618 level of the distance $510 - $280. The structure of wave C counts as a five-wave sequence, which ended in the year 2001 with a slight truncated
fifth wave. As you can see on the chart, the red-dotted Mid-Line almost exactly touched that low to the 
minute and prices shot up in the opposite direction. 

Consider the fact, that the year 2001 marked 21 years after the orthodox top of 1980, 5 years from the high
of wave B, 8 years from the low of 1993 and 13 years of the high of 1987/1988. The time length of the 
declining waves then all lasted about 5 years and the advances lasted 3 years. The most recent high occurred late 2004 and the question is, has there another countertrend-rally been completed. The advance from the low of 2001 to 2004 lasted another 3 years and can be counted as complete, in fact the bearish count labels that wave as another wave X. As pointed out before, Gold held very well above the 1x1 Gann line and dispite the possibility that a more pronounced wave C to the down side could unfold at any time, a move to the 2x1 Gann line is expected and would not alter the bullish scenario. On the other hand, Gold trades below the 50% level 
of $850-$252 but above the 1x2 from the all-time high. A move below $330 would highly likely eliminate the bullish count and a move below $300 would add to the evidence that another bear market leg is underway. 

In their November 2004 update, Mary Ann and Pamela Aden made this statement: "When gold hit its 1980 peak it overshot the top of the up channel. Who would've thought in those days that gold wouldn't reach a bottom 
for another 21 years in 2001 as it moved from the top of the channel to the bottom." I have not yet labeled 
the low of 2001 as wave IV because of the lack of confirmation. A move above $500 would add to the evidance that really a new bull leg in Gold is underway.

*) By far the most widely used Gann approach is that of squaring time and price. This approach is based upon the concept that lines determined by certain points of intersection of time and price will provide support and resistance for future activity. The diagonal of the square moving forward in time is, in theory, significant in determining turning points in the market. This line is referred to as a 1x1 line (1 time unit by 1 price unit).        

 

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  Gold#2 - Bull Market
Monthly #2

  

  Chart: futuresource.com

   

ELLtoday, April 10,2005: Gold#2 - What IF....Bull Market, Monthly #2, Keypoint $480, Nov 7,2004.  

On November 7,2004 ELLIOTT today stated: “Under this interpretation, gold is now trading in Minor wave b
of Intermediate wave (4). If Gold holds above $370, a flat correction can be counted for wave (4) and another advance in wave (5) should follow.” Gold held above $370 and another advance to $457 followed. 

As you can see on the chart, the Major Median Line (MML) points to $500  a major resistance back in 1983 and 1987. Back in November 7,2004 ELLIOTT today also said, 

If gold finishes Primary wave [1] of a new bull market, the ensuing correction should hold above the $300-$325 level and the structure of the corrective moves should be either an (a)-(b)-(c) or a variation. A move above $480 or better $520 will favour the odds that indeed a new bull market in gold is in force.

A Fibonacci 61.8% retracement of the advance from $252 to $457 points to $330. That point is virtually important since in 1996 the $325 level was a keypoint to the question whether the market will be a bull or a bear. As you can see on the chart Intermediate wave (4) held above $371 and to bring that level in perspective: another five-wave decline from $448 points exactly to $371.90, if the entire structure will trace out an a-b-c zigzag correction and wave c will be 1.618 times the length of wave a, which was –47 points. 

 

Updated April 10,2005

GOLD, April 10,2005

open  chart

  Gold,04/10/2005

Chart: futuresource

 

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Gold - Special Report
© ELLIOTT today,Nov.6,2004
posted November 8,2004

Keypoint $480 

ELLIOTT today, Gold, April 8,2004:
"Gold, April 8,2004. One of the most popular opinions among analysts today is that gold has begun a new bull market.

That enthusiasm, which ELLIOTT today does not share, is a sign of a top, similar to the peak of January 2004, this time of at least two degrees higher. The simplest wave count however supporting the case that wave (5)
is over, as displays the chart of figure 1. A similar breakdown would call for a decline into the area of the preceding fourth wave of one lesser degree, which in the longer term outlook in the case of gold is $320. 
Short term $400-390 may hold for some time."

Gold declined to $371,a loss of -59 points, tracing out a five-wave structure to the downside. ELLtoday labeled that decline as Intermediate wave (1) of a new bear market. EW analysis of February 2, February 25, April 8,2004. Since gold recently reached a new high for the year, the decline from the January/February peak is no longer counted as Intermediate wave (1) of a new bear market. Instead, the entire price action from that high is a high level-fourth-wave consolidation that will count as Intermediate wave (5) of Primary wave [C] of Cycle wave B. The new count shown on the chart above is considered bearish, so in the longer term no change has occurred with respect to the EW outlook. 

Extremely bullish psychology toward bullion supports this count. From a contrarian stance, the Elliott wave contingent is certainly in the minority, but it's often good to weigh the arguments of those saying something different from the crowd. As gold reached $252, stories of gold's bear market have reached the mainstream press. Even Newsweek has noticed that "Gold Is Losing Its Glitter." Recently the 10-day daily sentiment index of gold traders has pushed to 83.2% bulls, which is above the 81% recorded at the April high. When bullish sentiment becomes this lopsided, odds of a trend reversal are extremely strong. 

 

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Gold#2 - Bull Market
Monthly #2

Keypoint $480 

 

Gold#2 - Bull Market

If the price of gold completed its corrective pattern, a double zigzag correction at $252, the ensuing
up move counts as Intermediate wave (5) of Primary wave [1] of a new bull market. It's interesting to 
observe, that under this interpretation, the length of the second A-B-C is 0.618 times the first A-B-C,
40.7%/64.7%. Under this interpretation, gold is now trading in Minor wave b of Intermediate wave (4).
If Gold holds above $370, a flat correction can be counted for wave (4) and another advance in wave 
(5) should follow. 

If gold finishes Primary wave [1] of a new bull market, the ensuing correction should hold above the 
$300-$325 level and the structure of the corrective moves should be either an (a)-(b)-(c) or a variation. 
A move above $480 or better $520 will favor the odds that indeed a new bull market in gold is in force.

DISCLAIMER

The material is ONLY PROVIDED FOR EDUCATIONAL PURPOSES AND PAPER TRADING.The recommendations are for paper trading to develop your skills for real time trading. If you can make profits in paper trading, and wish to trade real time with real money and need assistance, then seek help from a qualified financial advisor. THIS IS NOT FINANCIAL ADVICE.

The material does not recommend or otherwise imply that any trading position be taken, which is,and only can be initiating trader's decision and responsibility. I am not a registered financial advisor - and cannot give such advice.

The charts, forecasts, and information are for educational purposes to demonstrate the predictive success of this type of market analysis. As such, it is primarily a teaching tool. Any signals given to buy or sell are for demonstration of the method and are NOT trading instructions or any sort. If you do not agree to these terms then do not accept and cancel this instruction tool. The author does not take any on responsibility for your trading success or failure. Payment of fees acknowledges that you have accepted and understand these terms. This information is not available free. If you have obtained this without payment, you have an illegal copy and are an illegal user. The information on this report is copyright. 

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