Gold's Technical Analysis Is Pretty Basic/Clearcut Right Now
Gold's technical analysis/picture is pretty basic/clearcut right now, even if one doesn't understand cycles and Elliott Wave. First I'll start with the "Trade the Cycles" assessment of gold, see chart 2 at
http://stockcharts.com/charts/gallery.html?$GOLD. Gold hit a Wave 1 Cyclical Bull Market cycle high at $730.40 in May 2006, which was Wave 1 up of the likely 15-20+ year gold/precious metals Secular Bull Market that began at $254 in April 2001 for gold, and, HUI/NEM/XAU's Secular Bull Market began in late 2000 (the large/mid cap stocks lead the metals, and, silver lags gold, silver's Secular Bull Market began in late 2001 versus April 2001 for gold).
Wave A down of the Wave 2 Cyclical Bear Market happened very quickly, in about a month's time, with gold falling to $542.27 in June 2006, see chart 2 at
http://stockcharts.com/charts/gallery.html?$GOLD. From mid June 2006 until April 2007 gold was in Wave B up of the Wave 2 Cyclical Bear Market, and, Wave B peaked at $698 in April 2007. So, gold is in Wave C of the Wave 2 Cyclical Bear Market since April 2007.
Even if one doesn't understand cycles and Elliott Wave, gold has a downtrend since May 2006, so, why nearly all of the "well known" (in the sector at least) and not so well known gold writers are bullish is very puzzling, though I know some have a bullish agenda, and, don't realize that they're making total jackasses out of themselves, because, they don't even understand basic technical analysis.
Gold's relatively flat primary multi year Secular Bull Market trendline (began at $254) since April 2001 is at $475ish right now, so, gold is MORE THAN $200 above it's primary trendline right now. NOT TIMELY.
Notice in chart one at http://stockcharts.com/charts/gallery.html?$GOLD that gold has a near perfect bearish double top in late July/early August at $688.40 (late July) and $688.10 (a countertrend Wave B type cycle high, so, gold is now in a short term Wave C downcycle), and, there are four other cycle highs very near $688 that form a very bearish sextuple top (think there's resistance?). Why are nearly all gold writers bullish right now???
A double top is a well known bearish formation, and, gold has a well established downtrend (trendlines are pretty basic)/Bear Market since May 2006, so, why are nearly all gold writers bullish right now??? Both long term (since May 2006) and near term gold is obviously bearish. This explains why web traffic at many of the well known gold sites is down 60-70%+ in the past 6-12 months. Most of the gold writers and gold sites have become irrelevant, because, they're ridiculously clueless regarding gold's technical condition, or, they simply have a weak minded bullish agenda.
Cycle trendlines/channels used in concert with Elliott Wave patterns and gaps are the basis/crux of "Trade the Cycles." "Gaps action" is very important.
As a long term multi-year investor in any stock, commodity, etc. you want to buy near the primary multi-year Secular Bull Market/very long term upcycle trendline. Gold's primary multi-year Secular Bull Market/very long term upcycle trendline is at $475ish right now, so, gold would be a great buy in the $475-500 range. When the vast majority of gold writers say it's a great time to buy or are bullish, as they almost always are, it's rarely a good time for long term investors to buy.
HUI/XAU's Wave 2 Cyclical Bear Market began 5-11-06, see charts 7 and 9 at http://www.joefrocks.com/GoldStockCharts.html. The primary Secular Bull Market trendlines since late 2000 are at 200-220 for HUI and at 85-90 for the XAU. Those are the targets for where the Cyclical Bear Market will bottom. NEM's Wave 2 Cyclical Bear Market began on 1-31-06. ....... http://www.JoeFRocks.com/ .
HUI NEM XAU
http://stockcharts.com/charts/gallery.html?$GOLD. Gold hit a Wave 1 Cyclical Bull Market cycle high at $730.40 in May 2006, which was Wave 1 up of the likely 15-20+ year gold/precious metals Secular Bull Market that began at $254 in April 2001 for gold, and, HUI/NEM/XAU's Secular Bull Market began in late 2000 (the large/mid cap stocks lead the metals, and, silver lags gold, silver's Secular Bull Market began in late 2001 versus April 2001 for gold).
Wave A down of the Wave 2 Cyclical Bear Market happened very quickly, in about a month's time, with gold falling to $542.27 in June 2006, see chart 2 at
http://stockcharts.com/charts/gallery.html?$GOLD. From mid June 2006 until April 2007 gold was in Wave B up of the Wave 2 Cyclical Bear Market, and, Wave B peaked at $698 in April 2007. So, gold is in Wave C of the Wave 2 Cyclical Bear Market since April 2007.
Even if one doesn't understand cycles and Elliott Wave, gold has a downtrend since May 2006, so, why nearly all of the "well known" (in the sector at least) and not so well known gold writers are bullish is very puzzling, though I know some have a bullish agenda, and, don't realize that they're making total jackasses out of themselves, because, they don't even understand basic technical analysis.
Gold's relatively flat primary multi year Secular Bull Market trendline (began at $254) since April 2001 is at $475ish right now, so, gold is MORE THAN $200 above it's primary trendline right now. NOT TIMELY.
Notice in chart one at http://stockcharts.com/charts/gallery.html?$GOLD that gold has a near perfect bearish double top in late July/early August at $688.40 (late July) and $688.10 (a countertrend Wave B type cycle high, so, gold is now in a short term Wave C downcycle), and, there are four other cycle highs very near $688 that form a very bearish sextuple top (think there's resistance?). Why are nearly all gold writers bullish right now???
A double top is a well known bearish formation, and, gold has a well established downtrend (trendlines are pretty basic)/Bear Market since May 2006, so, why are nearly all gold writers bullish right now??? Both long term (since May 2006) and near term gold is obviously bearish. This explains why web traffic at many of the well known gold sites is down 60-70%+ in the past 6-12 months. Most of the gold writers and gold sites have become irrelevant, because, they're ridiculously clueless regarding gold's technical condition, or, they simply have a weak minded bullish agenda.
Cycle trendlines/channels used in concert with Elliott Wave patterns and gaps are the basis/crux of "Trade the Cycles." "Gaps action" is very important.
As a long term multi-year investor in any stock, commodity, etc. you want to buy near the primary multi-year Secular Bull Market/very long term upcycle trendline. Gold's primary multi-year Secular Bull Market/very long term upcycle trendline is at $475ish right now, so, gold would be a great buy in the $475-500 range. When the vast majority of gold writers say it's a great time to buy or are bullish, as they almost always are, it's rarely a good time for long term investors to buy.
HUI/XAU's Wave 2 Cyclical Bear Market began 5-11-06, see charts 7 and 9 at http://www.joefrocks.com/GoldStockCharts.html. The primary Secular Bull Market trendlines since late 2000 are at 200-220 for HUI and at 85-90 for the XAU. Those are the targets for where the Cyclical Bear Market will bottom. NEM's Wave 2 Cyclical Bear Market began on 1-31-06. ....... http://www.JoeFRocks.com/ .
HUI NEM XAU
Labels: Gold, Gold Stocks, HUI, NEM, Silver, Silver Stocks, SPX, XAU
posted by Joe Ferrazzano at
11:47 PM
