A fifth wave is here for Gold
Updated
OK friends, please note that to get a cohesive view of this Elliot Wave analysis of GLD you would have to see my first post (Gold is going down soon- then up) on Mar. 13 as the scope of the wave count is tool large to represent in 1 chart. In that post I was of the view that GLD needs to dip to complete a 4th wave then head up and I was right, one week after posting we topped out very slightly higher than the time of publishing and we subsequently dipped to within roughly a quarter of my target; 119.54 was the actual low vs. an estimate on my part of 119.31 or lower. Where I was wrong was with regards to timing, as you can see from this chart the 4th wave was very protracted.
It is notable that I did update my idea on May. 1 with the following comment: 'Still do not have sufficient evidence to enter a long position, we are at RSI resistance, have retraced 50% of the most recent drop, and may head back down. Based on a Fibonacci timing tool the 9th and 29th of this month will be dates worth watching for potential trend reversal.' It seems that the 29th of May was of significance in hindsight. Though I've been bullish for a few weeks now based in the break above the Feb. 20th high I can say in technical terms that the 5th wave is officially in progress (even w/ out breaking above that high there is such a thing as a truncated 5th wave but that's beyond the scope of this post.)
Now the question is where do we top out? There is more than one way to answer this, based on standard Elliot wave theory one should look to the 61.8 - 100% range of the rainbow colored Fibonacci region (based on the combo of waves 3 & 4) which gives us a wide price range. It is also notable that the grey shaded region to the right of the graph shows fib extensions that overlap the rainbow region, at the end of the day the best place to take profits would be in the low 130s. Thanks for reading, questions and criticisms welcome.
It is notable that I did update my idea on May. 1 with the following comment: 'Still do not have sufficient evidence to enter a long position, we are at RSI resistance, have retraced 50% of the most recent drop, and may head back down. Based on a Fibonacci timing tool the 9th and 29th of this month will be dates worth watching for potential trend reversal.' It seems that the 29th of May was of significance in hindsight. Though I've been bullish for a few weeks now based in the break above the Feb. 20th high I can say in technical terms that the 5th wave is officially in progress (even w/ out breaking above that high there is such a thing as a truncated 5th wave but that's beyond the scope of this post.)
Now the question is where do we top out? There is more than one way to answer this, based on standard Elliot wave theory one should look to the 61.8 - 100% range of the rainbow colored Fibonacci region (based on the combo of waves 3 & 4) which gives us a wide price range. It is also notable that the grey shaded region to the right of the graph shows fib extensions that overlap the rainbow region, at the end of the day the best place to take profits would be in the low 130s. Thanks for reading, questions and criticisms welcome.
Note
There it is, the awesome power of a commodity 5th wave, do not go long at these levels, every healthy trend corrects and there will always be opportunities. This could easily be the last year in your lifetimes that you see Gold oz prices that start with a 1!
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