Gold Monthly: Gold Begins To Freely Trade In U.s. In 1976

Gold Monthly

A 873

One of the interesting things about commodities, making them different than equities, is the tendency to make large moves as “corrections,” or ABC patterns. This is in contrast to the stock market which will unfold in large five wave patterns higher over many decades and centuries. Why is this? I believe this occurs because the stock market produces “yield” and is an expression of mankind’s continuing evolution, whereas commodities have ZERO yield. This means commodities will always be “correcting” previous emotional extremes. This is not to suggest that commodities won’t trend higher over decades and centuries, only that they will do it in a much different fashion than stocks.

C? 1005

This whole pattern smacks of a massive three wave move beginning with the 101 low in 1976. The A-Wave was a 772 dollar move. The C-Wave target of A = C was 1025, a level that has so far been huge resistance. The implications of decisively taking out 1025 could be quite dramatic. The 161.8% of A = C target is 1502!





REPRINT 6/16/09

253

The 78.6%* retracement of the A-Wave was 266, which held almost perfectly.



B 101

Gold begins to freely trade in U.S. in 1976

*78.6 = Sq. Root of 61.8

Andy’s Technical Commentary__________________________________________________________________________________________________

Gold Monthly (Log Scale) Because Gold has decisively taken out the the A=C target of $1,025, this model gains in viability. The targets are either $1,502 for a 162% of A=C, or $2,187 for an A=C in % terms. The higher target would coincide with a multi-decade long trend channel (log scale).

2187

C 1502

A 873 ~ 38 months

Channel connected through monthy closes.

~234 months

253

B

101

Gold begins to freely trade in U.S. in 1976

One high probability timing target for this C-Wave would be December 2010 for (A+B)/2 = C-Wave duration, or 136 months.

Andy’s Technical Commentary__________________________________________________________________________________________________

Gold (Daily) - An “Irregular” Correction

-B(C) Completed MOVE 1034

(A)

“b” “d”

“e” (B) “c” “a”

As was highlighted on 9/14/09, this is the only realistic bearish case for Gold. It would be that Gold did complete the C-Wave at 1034, and now we’re at the tail end of an “Irregular” correction. If this is the case, then $1,117 and $1,169 are resistance targets for the -BWave. Under this model, Gold should not get above $1,169. 681

-A-

Andy’s Technical Commentary__________________________________________________________________________________________________

Gold (Daily) This would be the count that justifies the “Irregular” model of the previous page--that we’re seeing an “impulsive” (C)-wave that is concluding the largest -B- Wave. In this model, waves “1” and “3” are the same size, which means the final wave “5” is the “extended leg.” The main targets of this move would be $1,155 for a fifth wave that would be equal to the first three waves. Another target would be $1,169 for the Wave “5” to be 162% larger than Wave “3.” Those levels are consistent with the higher “Irregular” price objectives from the previous page.

“5”

“3”

“1” “4”

“2”

(B) There is one issue with this model. The second and fourth waves look very similar. There is supposed to be “alternation” between these waves-one of them should be larger and more complex than the other. So, this brings up another possible interpretation 

Andy’s Technical Commentary__________________________________________________________________________________________________

“5”

Gold (Daily)

“3” 5

This would be the outcome that would set the stage for much higher prices into late 2010--that we’re just in the middle of an impulsive wave that is subdividing higher. The implications here are that the triangle formation merely finished a complex Wave that looked some think this….

3 “4” 4

1

“1” 2

“2”

< IV >

Andy’s Technical Commentary__________________________________________________________________________________________________

Gold (Daily) - A Double Triangle Wave ? It’s been noted that markets are witnessing an increasing number of “odd” formations. This would certainly qualify. I’ve never seen anything like this before, but it would be the best explanation of the price action and would support a move to $1,500+. The move down from the 1034 highs in March 08 has been best counted as an “expanding triangle.” The subsequent sharp move was always “corrective” in nature, not impulsive. Then, we get a “contracting” triangle. So, we’ve basically seen three corrective structures in a row. The best explanation must be (ABCDE)-X-(ABCDE) for a “Double Triangle.” If this is what’s going on, the recent advance is most likely just Wave -I- of .

-I-

< III > -X-

(B)

(B)

( D)

(D) (E) (C) (A)

-Y-

< IV >

Contracting Triangle

(A)

Expanding Triangle Clear “corrrective” move

(C) (E)

-WAndy’s Technical Commentary__________________________________________________________________________________________________

Gold Weekly (Log Scale)

C

This is an update to the longer term count first presented on 6/16/09. If we don’t see a dramatic reversal before $1,169, then this would have to be the model. Notice that the larger degree Wave , while odd, is somewhat similar to the lesser degree Wave -IV-, which was also counted as Double that ended with a contracting triangle (fractal?). This wave count would likely mean higher prices through 2010. Given the similarity between the higher degree wave-4s here, it wouldn’t surprise to see a Wave that has the same size and scope as the lesser degree Wave -V-.

< III > -V-

-X-

-Y-

< IV >

- III (X)

-W(Y)

- IV (W)

-I- II -



B

< II >

Back in June, I had thought that the -X- wave here was the final Wave , believing it to be a terminal fifth (corrective pattern). This ended up being an incorrect interpretation. The good news is we knew that idea was wrong when the market lapsed into a triangle.

Andy’s Technical Commentary__________________________________________________________________________________________________

Gold Weekly (Log Scale)

< III > -V-

This is a less “conventional” Elliott Wave count. It suggests that the gold move completed with $1,005/oz. peak in Feb 2009. There’s a tendency for most Elliotticians to begin counts at the highest or lowest point on the chart, which is usually not the actual finishing point of very large patterns. In several ways this is a more satisfying count than the more “conventional” model presented on the next page.

C? 1005

- III (V) (X)

< IV > (Y)

- IV -

( III )

(W) ( IV )

“Double Combination” Wave - IV -. “Looks” like a triangle but I don’t think it is one.

(I) (B)



Notice the long period of congestion here. The longer the congestion, the more powerful the next move will be. Indeed!

-I-

“Expanding Triangle” Wave < IV >? Triangles typical precede final fifth waves.

( II )

(V) (C)

- II -

( III )

REPRINT 6/16/09

(A)

(I)

( IV )

“Inverted running correction” that presaged the powerful third waves that were ahead.

( II )

253

< II >

B Andy’s Technical Commentary__________________________________________________________________________________________________

C

Gold Weekly (Log Scale)

1033

This is the model that supports a completed move in March 2008 at 1033. This is the “conventional” count that most Elliotticians might see. Whether or not this is the correct accounting or it’s the one on the previous page, it makes little difference. The bottom line is that if we did finish a major move from the 253, it was completing a 32-33 year pattern beginning with the 101 low in 1976. This means that the next move down will be a large correction targeting 456, the 61.8% retracement. If that seems like a ridiculously low level, it’s worth pointing out Gold was just there less than four years ago! 456 also coincides with the level where gold “broke out” and went parabolic. There’s a strong tendency for parabolic markets to completely retrace back to their “break out” levels.

< III > -V-

< IV >

- III Gold went parabolic here.

- IV -



REPRINT 6/16/09 -I-

- II 253

< II >

B Andy’s Technical Commentary__________________________________________________________________________________________________

Gold (Daily) - An “Irregular” Correction

REPRINT 9/14/09

-B-

Completed MOVE a (W)

“b” “d”

“e” (X) “c” “a” This is the Bullish model reworked a bit. The model that best fits with this obvious triangle formation is that the 1034 high from last year completed the move and we are now in the middle of an “Irregular” correction that can take us to $1,117 - $1,169 as the 123.6%/138.2% of - A - = - B -. The $1,117 level better fits the “thrust” targets coming out of the triangle. The implications of the triangle pattern here still suggest upside targets between $1,058 - $1,128 with a mid-October conclusion. 681

-A-

A move below 950 NEGATES this bullish model

Andy’s Technical Commentary__________________________________________________________________________________________________

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