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« Stocks at the Edge of Chaos | Main | Russo on How Low Could We Go »

Wednesday, September 02, 2009

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majestic tiger

thats a totally flawed wave count.

yelnick

vipul - Yves or the STU's? Yves = 3, STU = C which ends a B wave; large C down to follow

Forkoholic Serge | Elliott Wave Forkology

STU at least counts it correctly ;-)

Nystrom

Gold is money, nothing else.

$5,000+/ounce within 18-months...flight to SAFETY.

Mamma Boom Boom

I don't have the array of indicators for gold, as I do stocks, but what I do have tells me gold is not ready to take off, yet.

da bear

I am thinking that this is possibly a five wave B move off the Primary top back in March (Primary WAVE I). the wave down into last October around $700 was A of WAVE II. This could be wave B now with the wave 3 high near $1,000 and the move back and forth between say $900 and $960 as wave 4. then this move is wave 5 of B of Primary WAVE II. this will then set up WAVE III which should take gold higher until 2020-2023. upside target of $3,200 to $5,000 (the end of this K-cycle winter).

so i think this wave 5 of B can run up to $1,100.
then wave C down should take gold to a higher low.
the last big decline took gold to $250 in 1999/2000 which was just above the previous wave 3 high (1973?).
then this time gold in its A move down fell to around $700. the previous wave 3 high (2006?) was also around $700.

A target for C wave down is $775 to $777 or $800 to $850.
time frame between Oct./Nov. to next March.
i wouldn't doubt if gold rose in the stock crash.
supposedly in 1987 crash gold rose then drifted lower after the financial panic.
could see that now...

george

yves,
sure looks like a contracting
triangle on the chart you
have labeled in red waves 1-2.
the last bar
on the chart to the right
appears to be an upward
thrust out of the triangle.
4th waves breakouts are
caused by news driven
events.
have you considered this
as an altermate to the count?

digitalwarrior

You are an idiot.

Francis Schutte

George may be right!..Hard to believe somebody can make certain conclusions which are in fact also fundamentally completely incorrect.

Technically Gold and Silver are in a proces of breaking out. Once Gold burst the $ 1,000 it will probably not been seen lower for some time and as long as we have fiat paper money, we shall have inflation and hyperinflation. Deflation will only come later on...This reasoning is just basic economics: Amazing that a man as Prechter fails to see it!?

yelnick

Francis, Prechter has made spectacularly boneheaded calls before. If there is a general abandonment of the USD your scenario will happen. But he wave counts of both Neely and Prechter say the opposite - deflation and a stronger USD first. We shall see.

da bear

yelnick,


i think that the decline from March 2008 to late October 2008 was an A wave decline, and we are currently in B wave up. after this is C wave down. Then the bigger WAVE III rise can begin.

it just seems like too many joe six packs are in silver right now and they need to get washed out...


da bear

KRG

Y :
In the above chart, the "3" of the first 5 doesnot look like a 3 at all. No impulse ; An ABC would fit better for the first five

vipul garg

yelnick,
the chart in your comments: i guess it is Yves.
i am only saying the wave count part and not the direction. the direction both Yves and STU imply is up in the short term atleast.
it is surely not an impulse so 1 and 2 should be out.

taking wave 1 as labelled :wave 4 is the smallest correction visible, smaller than corrections within wave 3. wave 3 though looks subdivided but cannot be counted as such because of overlap in its potential subdivisions.time of waves is a problem and so.

lets take wave 2 as labelled.
of the A counted as a-b-c because one could count c having 12345 waves.( i still would not agree its an a-b-c of a flat.)
but then obviously you cannot count wave B .
and surely wave C cannot be counted as an impulse having 12345 waves.

why i make this point is that something else is going on. for a while directionally one may be right , but for that we just need to examine the consolidation since recent highs as labelled as 2 and see when that ends.

skrew

Let me to speculate a little bit.
The drop of Shanghai Composite Oct-2008 / Oct-2009 is 72%, circa. When we try to calculate the next drop equal to the former, i.e. 72% starting from the top Aug-2009. It leads us to the level ? ... it is just 1000. (roughly, but nearly 1k)

Devon Homes

I recently came across your blog and have been reading about Devon Homes. I thought I would leave my first comment. I don't know what to say except that I have enjoyed reading. Nice blog. I will keep visiting this blog very often.

george

if you look at a chart
of GLD the gold ETF
on bigcharts.com
you can clearly see that
on the day gold price spiked
there was a huge volume
spike. this is typical
of a breakout of a
triangle formation
breakout.

Yves

George, we are all seeing the same triangle . We are all labelling this as a B wave.
I have posted this to get a reflection going on the latest count.If we all think alike then its not going to happen.I fundamentaly look for more monetary contraction.It is at -3% yoy now and dropping faster still.The USD will rally.Gold should go down but if we have a panic buying spree then all bets are off.With the fear trade both the USD and gold go up.I was trying to convey this message in the recent wave count even though I am bearish on gold.I can still see why it would take off big time.

Yves


Yves Is Clueless On Gold

Mr. Yves, you are clueless on gold, as the USD has nothing to do with it.

Gold is the most manipulated market in the world - silver actually is - and the ONLY thing determining the price of gold is that the CROOKS at the bullion banks (Federal Reserve) are running out of physical gold.

All the rest is paper crap, but when the CROOKS sell, they must deliver when demanded. People are starting to demand.

Yves

Total gold derivatives annual change rates peaked at 90% in early 2007.It is falling now at -35% .
If one looks at the amount traded by US banks in billions then the real pick up occurs in early 2007.
Does the drop in annual change rate leaves them open to add more trading i.e. more market manipulation or does it actually leave the door open for a break in control.This is what the market is about to resolve.
This is also the type of event that is a rare occurence that pays big bucks to those who think.

Yves

Yves Is Clueless On Gold

Professor Fekete published an excellent missive on The Gold Basis, which says it all, for anyone who wants to understand gold.

> http://www.financialsense.com/editorials/fekete/2009/0828.html

Soon to not be available at any price!

majestic tiger

Yves,
so technically a 3 rd wave and fundamentally bearish.?

luiz

bottom line, gold broke out.
do not get short for a while.

yelnick

vipul, yes, Yves' chart. The STU would count it as follows: we are in a large ABC on gold, and in the middle of the B. That B is breaking as an abc flat, and we just ended the small b wave as a triangle. so as other readers have noted, the spike yesterday reflected the thrust out of the b wave triangle. When small c of big B ends, we drop in a big C towards $700.

Prof. Fekete's argument is worth absorbing. Essentially, gold is being hoarded against the day of the collapse of fiat money. The good Professor would have it coming soon. A chart I have published (which is consistent with the Professor's work) on the Point of No Return points to 2014-2016. I have a bet that the US will be forced into some sort of gold backed system by 2020.

Whichever it is, right now gold is spiking. Question is whether in a gold backwardation world, can the price fall to $700? Any readers wish to comment on that? That is what the wave count is saying ...

luiz

someone says those who close swiss bank accounts put money into gold. sounds about right.

I believe $700. many people do not believe gold is safe heaven, cash, hedge,etc.

gold goes up hard, and down hard...

Mamma Boom Boom

Yelnick, I'll comment,

Last week I said on my site, "But, longer term, there is an aerie pennant formation in the charts."

But, to finish the pattern we need to see a hard drop to around $750, IMO. That would give us an ABC completed.

Also, I think you have to admit that sentiment is very frothy.

Ned

Yves

My observation is about a resolve of the triangle pattern.If you can take a step back and look at gold stocks they seem to show a different count than the gold price chart.The exercise I gave into was to show that most e-wavers consistently try to match the wave count to their economic interpretation.I am bearish on gold if it holds the inverse relationship to the USD.That basic assumption is out if people panic to buy gold as the stock market drops.That is where you realise that fundamentals and the efficient market does not exist.

Yves

majestic tiger

yelnick,
i am not tottaly following you on the STU count. where are Big A and B , and where are small a-b .
i am in a long bull camp for gold till 1065 atleast. then will take it from there.

Josef

"I am bearish on gold if it holds the inverse relationship to the USD.That basic assumption is out if people panic to buy gold as the stock market drops."

Yves,

Nice observations. Thanks. Perhaps that is a motivation for the market not to drop. Time will tell.

- Josef

MDM

there is quite a bit of talk about the Chinese approved ESO commodity derivative defaults. Oil backed contracts from what I hear.

Clueless Gold Dimwits

Hong Kong announced that they are going to "transfer" their gold from London to their own new Asian storage facilities in Hong Kong.

Now, what makes anyone think that London has Hong Kong's PHYSICAL GOLD and not just a bunch of PAPER IOUs stuffed into the Al Gore-type "Lock Box"?

The PHYSICAL MARKET is driving the PAPER MARKET to COLLAPSE, as London and probably many of those who LEASED gold are desperately attempting to return it before Hong Kong discovers it only owns IOUs!

This whole PAPER GOLD SCAM is going to COLLAPSE and be the largest nuclear detonation in the history of Wall Street CORRUPTION/FRAUD!

Can anyone spell DEAD BANKSTERS when the Asians and others discover that their gold is GONE!

yelnick

tiger, here it is:

mar08 is end of 5 of 5, over $1000/oz
oct08 is end of A wave down, around $680
now is nearing end of B wave, which should go higher than Mar08 (irregular flat)
soon after we have a C wave down to the $700 area; might coincide with USD spike to DX 90 or higher

timing of the current minor c of B could be fast

interesting question is whether the USD has bottomed; or is the gold spike an indicator of USD weakness ahead. Normally the two are inversely related. Is this a divergence (gold acting as a commodity not as money) or should we hold back on going long the USD?

Sean

Yves and Yelnick,

Do you guys sincerely think Gold is the REAL Money? Do you think a world back by GOLD or Gold standard is the way to go?

May I ask then -- What if a 3rd world country discover tons of gold mine? That makes that country the Richest in the world, and that 3rd/4th world country's currency become World Reserve?

I read somewhere that this is the biggest flaw of a Gold standard -- that when the country discover more gold it can print more $$. Not your knowledge, not your people hard work, not your creativity or competative nature.

Just Lottery. Right?

Miguel

Gold and dollar are in the process of diconnecting, repeating the same pattern of 2003 at exact the same date.
FEAR drives the markets as Yelnick has put it.
I have seen some very interesting charts where one could see that gold is moving in a ABCD pattern.
This pattern has been repeated now for the third time.
And in the last D leg you see three phases up, parabolically. We are now in the first of these three phases.
It had to boom now to respect the parabol and to give the nex leg down the space to touch the parabolic trend line in order to take the real huge jump after that.
Until now all the moves respect this projection. As long as the dollar stays put or disconnects further, I see 1150 before oct 10th.

Yves

I got some small bars of gold at around 350$ a few years back.I believed then as I do today that the USD would vaporise.Then something happened recently where the USD rallied big and never did sentiment change about it.That is where waves become pertinent.You question the basic assumption.I conclude that the USD will eventually implode but not today given the huge consensus about this.

Yves

Yves

Sean, I do not think a return to gold is practical.
Something else will replace the actual system but I don't expect much change.It is like with the latest financial implosion.You would expect great things to change because this is your chance, your time. Unfortunately control will not pass down control.
We are stuck with the house is the casino.

Yves

majestic tiger

yelnick,
thanks for big A and B count.
higher degree counts can be tricky, but i think STU fundamentally has this right that gold will exceed previous highs , remain there for a while (all funds have to buy right ) and then a drop comes by.

but the drop is not coming anytime soon.
sincegold has just come out of accumulation, atleast for next 3 months its not dropping too much.

yelnick

Sean, this is a start of a deeper discussion, but any single gold discovery is trivial in scale to gold that exists. That is one reason it makes a fine money standard. On the margin you can have a tug of war, such as the US vs South Africa in 1968, but that was based on the US already eroding the USD vs gold and trying to use any means (including gunboats) to shore up the USD against a terrible depreciation that was going on with a poorly structured gold exchange system.

Ironic people worry over the scenario of a third world state gaining undue power due to a gold mine. Since 1973 we have been in effect on an Oil Standard. The US reserve currency gets much of its buoyancy from the oil trade. But oil is not like gold at all; it is used up, whereas gold continues to exist. As a consequence an oil state can get incredibly wealthy on the backs of the rest of the world, and if we ever hit Peak Oil, would gain the sort of leverage you are alluding to. Rather than continue with the situation you decry, better to move to a position where Money is returned to the People, which is what the classic gold standard tried to accomplish.

Under the classic gold standard, where gold coins circulate and pay off govt debts, we had the phenomenon of Real Bills, a term used by Adam Smith: 90 day notes that were backed by gold in London. A Real Bill could trade 20 times or more to make a global contract work - hire a team in China, transport to HK, ship to NY, send to retail, etc. Each step paid by the one Real Bill and many derivative notes backed by it. What we think of as "money" would be the turnover of those Bills. The "money supply" was multiples higher than the gold supply. And could expand and contract as markets needed.

I conceptualize this as Gold being profit and Real Bills as revenue. As long as the Real Bill was backed by enough gold to pay the profits at each stage of production/distribution, there was NO DEFAULT even though 20 times or more in value was borrowed against the original Bill. Also no need for fractional reserve banking, since the Real Bills expanded the money supply as effectively as the 10x ratio of normal fractional reserve banking (10x cash on hand to loans outstanding).

Proof point is that global trade in 1890-1914 (key date of the debacle that destroyed this system) was huge, and not matched as a percent of world GDP until as recently as 1995 or thereabouts, in real terms. We celebrate the status quo, and think the break of money from gold has caused a vast increase in globalization, when in fact that is just a myth propagated by the people who benefit the most from fiat money, governments and bankers.

In contrast, in our fiat system, while real wealth has doubled in the US, there has been an erosion across many fronts that is invidious, invisible, and inexorable. It is occasionally felt as a thinning out of manufacturing, or a need for two-worker families, or a steady drop in retirement assurance. Whereas Europe was a $5/day vacation in the late '50s and early '60s, the US now sees Europe as an expensive luxury, especially in places with surprisingly high costs like Oslo or Zurich.

Back to 1914. In 1909 several European states began to cheat on the classic gold standard, preparing for war. War is hard on gold as so much needs to be borrowed, and the banks can take the gold to pay it off. So much easier to hold the gold and borrow in fiat money, as all the Euro states did when the war broke out. In that sense gold should act as a brake on nefarious government action, including war and massive welfare programs. States that borrow too much, such as Greece, Italy and since 1990 Japan, avoid gold, since it would have limited their ability to run up debts way ahead of their ability to repay.

Gold would be an anathema to the current US Government, which is rapidly doubling the national debt and running up a structural deficit that may get to a terrible tipping point (persistently over 5%/yr.) The only way out seems to be a steady erosion of the value of the USD to make it cheaper to pay back those debts. This will rob the current citizens of their savings, their retirement, and possibly their medicare. Hence if gold were to come back, it would have to be forced on the US.

luiz

> i think STU fundamentally has this right that gold will exceed previous highs ,


I know STU has been bearish on gold, and changed counts not long ago.

Devalue The Worthless Buck

Could it be that INSIDERS are front-running gold, knowing that a U.S. Dollar DEVALUATION is coming and SHORTLY?

Upstart

Concerning stocks, Carl Futia looks for another shakeout starting tomorrow, before heading to the next target of 1054. If so, it appears we're in wave c of a small expanded flat. He looks for 1120 in October.

Upstart

....If so, it would satisfy the call I made that a 5-month cycle low should occur in September.

seasonality

Devalue The Worthless Buck

What country are you representing? or do you work for the government?

Gold has seasonality which tend to go up in September.

Mamma Boom Boom

Doing the charts!

Seems to me we may be approaching a panick sell-off in the metals.

Certainly worth watching 'VERY CLOSELY'.

panic

>a panick sell-off in the metals

Why a panic sell-off? metals are not panic selling commodities, they are panic buying commodities.

Taz


"I read somewhere that this is the biggest flaw of a Gold standard -- that when the country discover more gold it can print more $$. Not your knowledge, not your people hard work, not your creativity or competative nature."


In a wold of fiat currencies, you simply print the enter button the keyboard. At least in terms of the gold standard you have to go out and find the stuff and then mine it which is a costly and time consuming process. That flaw is perhaps its greatest virtue.

Taz

Sean

Yelnick, thanks a lot for your extensive post!! A comprehensive history review.

Thanks again

Seasonality Another Dimwit

"Gold has seasonality which tend to go up in September."

Another dimwit watching only the price and spouting a standard mantra.

Hey, Seasonality, look at the INTERNALS of the gold market...look at what is so ABNORMAL compared to other Septembers...look at how gold is TRADING on almost a tick-by-tick basis...LOOK!

What really pisses me off about people is when they don't watch gold until something DYNAMIC happens, then every friggin' dimwit is a GOLD GENIUS as they attempt to use EQUITY EXPERIENCE or even other COMMODITY EXPERIENCE and apply it to the most UNIQUE and MANIPULATED market in the world - Actually silver being the MOST manipulated.

All over CNBS and Bloomberg and missives and forums everyone is making up EXCUSES for why gold is doing what it is doing. MARKET ACTION MAKES MARKET COMMENTARY.

I could go on and on, but I will wait until the next CLUELESS DIMWIT shows up.

pissed man - Seasonality Another Dimwit

Seasonality Another Dimwit

Don't get so exited. I only responded to "Devalue The Worthless Buck". You do not devalue because gold goes up.

Seasonality does not mean 100%.

Trust me I have watched gold more intensively than you did. "until something Dynamic happens"-- that's behavior of gold, if you still do not know.

I do not see any point, other than anger.

pissed man - Seasonality Another Dimwit

>All over CNBS and Bloomberg and missives and forums everyone is making up EXCUSES for why gold is doing what it is doing. MARKET ACTION MAKES MARKET COMMENTARY.

try to watch European CNBC. or stop watching if that makes you angry. e.g. Dennis Kneale

Simon

I've been following the writings of Granger over at Market Breeze. This guy has literally NAILED the last eight or nine turns in the markets down to the HOUR...I'm not kidding; I've made alot of money because of that guy. Here's his site:

www.MarketBreeze.com

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