Elliott Wave 5.0 "Reboot"

Tuesday, January 5, 2016

HUI Gold Stock Index 2000-2016 Review: What Bulls Can Do To Bears!

                                           What Stock Bulls Do To Stock Bears!
LiveLeak.com - Raging bull punishes cocky bullfighter who mocks 450kg beast without a cape.

When I saw this video it was a perfect representation of what bulls in markets can do to those stock bears when the trend reverses.  You have seen that Wall Street bull with his head down? This is the reason his head is down, because bulls attack from the bottom up, and bears attack from the top down.  "Bear market bottoms are the breeding grounds for bull markets", has always been true, but most of the time it is ignored, to the benefit of the contrarians.

It is no different in the gold stock market, but the bulls always forget this when a major top is reached, and the bears forget it at any major bottom.  In 2011 they saw no gold bears in sight anywhere, but yet they appeared out of thin air and started to slash all those gold stock bulls.

Are the gold stock bulls ready to come back? I am sure they will but not until the US dollar is set to start on the trend down for any length of time. The US dollar is still heading up when I looked at it this morning.

When we look back to 2000 and then even 2008, we can see those bottoms were very simple and very clear when they turned. Since the 2011 peak nothing has been clear, let alone the picture of a perfect impulse decline. At this time, I can only put a diagonal wave count to it. Our present bottom could hold as a double bottom but any rally from this pattern only suggests another bearish rally.

Mind you, this rally could be very strong and last more than just a few weeks once it does get going. 
Any trend lines I do make, I will always try to keep them parallel to each other and never created a deliberate throw-over or throw-under.  Keeping the trend lines the same supplies a fixed reference point with a third line supplying partial turning points.  They also only work with "Log" charts.  

Either way, any anticipated rally should take out the top trend line by a wide margin, and it should get confirmed with choppy and erratic wave action. If we are lucky we will catch any "B" wave down correction as that may produce a triangle as well. 

I am counting my chickens before they hatch in explaining any idealized move, but if it doesn't work this time it will be the same for any other similar situation.  
Just above the 330 price level, we have a gap that is still open, so that would be one of my target areas for a "B" wave top in Intermediated degree.  I also counted this out one degree higher, but that would throw us into a much higher degree of a Primary degree zigzag.