NEWS ALERT |
GOLD & ITS ELLIOTT WAVE LOCATION WITHIN THE UPTRENDReferences to gold are seldom out of the headlines these days, but when we see forecasters linearly extrapolating upside targets that are quite a long way above current levels we sit up and take notice. This was the case earlier this week as a notable consultancy announced price forecasts towards US$1600 per ounce. Nothing so extraordinary in that, after all, our own ‘alternate’ counts measure towards that same area, but that was derived some months ago when prices were below 1400.00. It is the timing and origin of this latest announcement that is interesting, especially when viewed from a contrarian perspective. Gold analysts have had ample opportunities in the past months to project such price levels, so why now when prices have already traded a lot higher and are nearing 1500.00+/-? Well, we already know there exists an enormous temptation to non-linearly extrapolate prices to levels of ‘extremes’ when they are already high – it is a function of mental conditioning to seek constancy, continuous growth, expansion, progress without consideration to the counter-balancing effects of decay, contraction, regression. It is so easy to get swept away by all the hype. The extrapolation of price is one way how this manifests. But the reality of the market is quite different - in fact the reality of the existing substance of the world is constructed around…’change’, within a non-linear form of pattern progression that incorporates periodical opposite effects – see the universal law of ‘Polarity’
And so at times when non-linear price extrapolation occurs, we must check on the location of gold prices to determine if projections are justified, or alternatively alerting us to an imminent peak. Based upon the intermediate degree uptrend that began from 864.50 in April ’09, there does exist two measured upside targets that currently form counts #1 & #2 in our portfolio. The first projects to the 1500+/- area and the second nearer 1600+/-. But it is when we examine the shorter-term pattern structure that it reveals the non-linear extrapolated forecast to 1600+/- has a far less probability rating than the lower – see latest updates in the latest edition of the EW-COMPASS:
So perhaps our learned friends are the protagonists in this story of contrarianism. For the moment at least, the trend remains upwards, but is moving fast towards completion. Take a look at the chart below – the recent decline between 1477.50 to 1443.20 has unfolded into a near-perfect single zig zag pattern especially noticeable because waves [A] and [C] unfolded by a fib. 100% equality ratio, in other words, these two declining sequences measure/declined the same. As we know, this is a common relationship found recurring in the markets that defines a counter-trend. Even the subsequent advance to 1462.85 unfolded into a smaller five wave pattern and was followed by a perfect counter-trend to 1451.90 unfolding into a ‘running flat’ – together confirming the continuation higher has resumed. Gold has since broken the 1477.50 highs. Look out for more pattern studies like this in the future. This particular pattern will be inserted into the WaveSearch database along with hundreds of others! Sincerely, Peter Goodburn END | FIN | ENDE |
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