Elliott Wave 5.0 "Reboot"

Saturday, March 5, 2016

Gold 2011-2016 Elliott Wave Count Review: Will It Reach $1400?

Gold has been a real problem, since the 2011 top gold has been in one bearish rally after another, with each one ending and crashing to newer lows after that.  I have labeled the 2011 top as a Cycle degree wave 3 top, but this may still be too far off track.  I shudder to think if the 2011 peak was a "B" wave top in Primary degree. I'm not going to spend too much time on that, but I assure you I will look for the extremely long term bearish wave counts, off line. 

Even though we have come from a very oversold position means very little if no super bull market is due. Wishing and praying for some mythical bull market to appear will only happen if the US dollar is set for a severe long term decline.   If you are betting on a severe long term US dollar decline already then, you are betting against Jim Rogers as he is buying US dollars. 

Besides the US dollar doesn't have sufficient height on the charts to give us a sustained downside trend.

The gold decline has definitely seen some wild diagonal waves, but there may be an expanded pattern in there as well. This would make our present move a "C" wave bull market, but one degree smaller than what I ran for some time.   At the late 2015 bottom, I would have rather had a huge spike to the downside, as the reversal would produce us a much longer upside run. 

If our present small degree move is not a diagonal ending move,  I would love to see gold closer to $1400 before it dies again. It would also be important for gold to clear my last "A" wave as that is very common in expanded moves.  Flip this chart upside down and it would be the same as a 4th wave crash. 

I watched a video from EWI about the big cycles in commodities and the short end of the deal is that they think we are in the 20 year leg of a down cycle. I believe in these cycles, but they can also produce massive bear market rallies during this type of a decline.  Hopefully we will catch many of these rallies and get out when we think a peak has arrived. 

If my Cycle degree wave 3 is true then, then a 20 year bear market will get us to the 2031 time frame.
This would make it a potential 20 year Cycle degree 4th wave bear market.  Any move like that would also send gold to the $300 price level before it ever cranked up in another 10 year bullish cycle.  

One step at a time as we have to see if this bullish move is going to die out as well.  
Short term I have to remain bullish but this bullish move will run out of steam as vertical moves like this cannot be maintained forever. 

If stocks are yet to turn south, then gold may remain bullish for the entire decline and is something we have to watch for. 

Many contrarians may not agree with this assessment of gold, but markets are designed to fool even the very best. Contrarians are a far more nimble bunch, and it will be interesting to see if they wiggle out of a potential fake run.  Any contrarian wants to milk this run for all it has, and rightly so, but they will be devastated if my assessment turns out true. 

 Those traders that are trading the Forex gold unit will eventually get a great short play position, but they must have the patience to wait until this run is no longer sustainable.