Elliott Wave Analysis of Gold

‘Morning folks,

I have finally found where the elusive comment on Gold was posted. As you will notice, that comment was posted on 7th April, and the low on Gold was 1443.49 on 12th April. (you might want to consider subscribing to the comments feed as well ;))
(the text of the comment appears at the bottom of this post again)

We are witnessing extensions within extensions. Clearly no Gold trader should be short just yet. Our new traget now comes between 1560-1587. Lets see what happens there. Typically, when an extended 5th wave ends, we will see a sharp reversal. But there will be pullbacks for us to sell into. Until a top is confirmed, remain bullish.

I would like to leave you with one final thought. The higher Gold goes the steeper will be its fall. So there will be enough room for even late comers to the bear party when it starts. But don’t make the mistake of selling on targets, as I have explained in the comment linked above. Best of luck! Ramki

Comment of 7 Apr 2011 reproduced: The mere fact of having reached a certain target does not mean the move is over. Certainly one should not contemplate selling just because a technical target has been reached. Ofcourse, it is certainly possible that Gold might have finished (or close to finishing) its rally. But until the time we have evidence that a top is in place, we should be ever so cautious. There are some supports at 1445 levels, and I wouldn’t be surprised at all if we get another attempt higher while this support holds. Only after we see a new 5 wave downmove finish will I start thinking about putting out a sell recommendation. How is this different from TCS where I appear to be comfortable in maintaining a downside target even before the top is definitively posted? I really can’t explain it. Sometimes I just feel it so. I realize that this is not a sensible answer. Maybe it is because TCS is doing a second extension within its 5 wave upmove? OK. Let me just say this. Once Gold finishes this rally, we will commence a decline down to 1160. Hope that satisfies some of you!


  • Pankaj

    Not sure if you saw this one..therefore re-posting this question…If one had sold Nifty when 6069 was broken. When should he have booked profits and why? Should he have trailed his stops, if yes.. how?

    • Hello Pankaj, Thanks for reminding me. I remember seeing your question, and thought will reply later, and then forgot about it! Well, if you read the update of 2nd January, I had said “So if you are choosing to go ‘short’ on a close below 6069, then you should protect yourself with a stop above the high seen in this run up.” That high was 6182. However, one should always keep an eye on any trading position, to decide whether there are signs that warn us to take profit, or get out as things don’t seem going the way we planned. After reaching 5171, the index started recovering. If you were trading for a shorter term, there were clear signs telling you to get out. These are the warnings. Although we did anticipate resistance at 5690 (prior low), the decline from 5599 stopped at 5242 on 24 Feb. The following day, although the markets made a lower low at 5232, the closing was near the top, at 5303. More importantly, the next day it opened higher with a gap, at 5330, a clear sign to run for cover. You would have had a chance to buy back below the opening rate, as the low was 5309. All this is possible only for the day trader. Anyway, it is always easier to say all this after the move. Bear in mind that to make money in the markets one does not need to be very active. You have to pick your levels, and act at the right time. Good luck. P.S. Wavetimes is not geared to give trading advice. As the tag line says, at Wavetimes you learn how to spot low risk trading opportunities using elliott wave analysis.

  • Akshay

    Hello Sir,

    Could you please throw some light on the Silver Patterns? It seems to be heading straight to the moon! The Hunt Brothers high of USD50 seems like a formality! Is this a brand new Silver Bull Market? And is a Silver Bull Market possible with the impending financial crises around the world and consequent deep recession, given that Silver, for all its hype, still remains largely an industrial metal.

    Looking forward to your repsonse. 🙂

    Thank You!


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