- May 9, 2011
- Posted by: Ramki Ramakrishnan
- Category: Gold
It is always a tough call to say we will get a 30% sell-off when all systems are pointing higher. However, as a battle-scarred veteran practcing Elliott Wave analysis for over 25 years, I will be remiss if I don’t point out that Gold is in its fifth wave within an extending 5th , and there is a fairly good chance that we have actually finished the 5th already at the high of 1575 seen a few sessions ago. Typically, when a move finishes with an extending fifth wave, Elliott Wave principle suggests that we will get a swift sell off to the second wave within the fifth. This level for Gold corresponds to 1155. However, there is a risk in that we often get a full-blown 2nd retarcement of the first sell off before we collapse. This is the reason why I urge traders to be ready to turn short at the first smell of bears now! A perfect place to go looking for the bear will be near the prior high, perhaps even marginally higher than that, say at 1588. But when the selling begins, it is going to be a rout! So at the very least, be sure not to get caught long.
Disclaimer: I have also been wrong. But I have been right more often than not. This blog has records of all my past glories and gaffes.