- December 29, 2009
- Posted by: Ramki Ramakrishnan
- Category: Gold
One of the reasons why traders should learn Elliott Wave Principle is because it gives you clues about the changing whims of the market much before any other system can. Remember, NO ONE can command the market to do as he interprets the charts. However, a smart analyst can tell you a low-risk entry level, and also advise you how to monitor your position. You just cannot take a position, lock it away in a box for a few weeks/months and hope to come back and see it delivering a big profit. You got to watch the market and take action as the market dictates.
The short term chart for Gold is telling us that the downmove from 1226 is probably not over. So we should exit our longs NOW. Have we changed our expectations for a rally in Gold? No way. We are still saying Gold will experience a significant move higher, at least 38% of the decline from the top, which means AT LEAST $68 from the lows, or in other words between 5 and 6% higher once we finish this decline. That is the minimum! In order to capture a 6% move, we should risk no more than 1% to 1.5%. It doesnt make sense to trade otherwise. For all these reasons, we have to step aside now and wait for the correction to finish. Kapish?