Gold - December 21, 2009

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Gold

Summary

• Long term outlook: Up
• Medium Term Outlook: Down
• Short Term Outlook: Sideways to Up
• Revision Point: Break above 1260
• Potential Medium Term Targets: 680 and lower

The sell off during the last week seems to have completed, or about to complete, five waves. With our preferred count given in the main chart, and the fourth wave viewed to be in an ‘expanded flat’, we hope to see a possible final rally during the coming week, with a target preferably above the December 3 high. In view of our preferred assessment, we shall be looking for low risk, high probability buy signals to take a long position targeting 1160, 1175, 1200 and finally above the December 3 high at 1126.30.

However, as our alternative (bearish) count, we may have already witnessed the completion of wave C:B and, hence, may have already started the medium term sell off. In this scenario, the five wave decline of the last two weeks will be seen as a possible first wave down. This would mean that we shall be expecting a second wave rally in the coming days with possible targets at 1160, 1175 and 1200, expiring below 1126.30.

In either case, we are looking for a possible rise during the week or two to follow and shall, therefore, be on the look out for low risk, high probability buy signals during the coming days.

 

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Gold - December 28, 2009

Summary

• Long term outlook: Up
• Medium Term Outlook: Down
• Short Term Outlook: Sideways to Up
• Revision Point: Break above 1260
• Potential Medium Term Targets: 680 and lower

The anticipated upward move seems to have started on December 23. Keeping the two alternative views from the last week’s report, we would be expecting a rise at least to around the 1,150 to the 1,170 levels, with our bearish outlook. On the other hand, if the bullish outlook given in the main chart is to materialize, then we are likely to see a new high in gold prices, during the upcoming days.

As a result of our current preferred and alternative outlooks, we would expect a bullish candle for the upcoming week and shall be preparing to take long positions on any potential pull backs from the current levels, after the emergence of low risk high probability buy signals.

 

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Gold - January 4, 2010

Summary

• Long term outlook: Up
• Medium Term Outlook: Down
• Short Term Outlook: Sideways to Up
• Revision Point: Break above 1260
• Potential Medium Term Targets: 680 and lower
• Current Position: Bullish at 1094.00

The move during the previous week has so far progressed almost exactly as anticipated in our last weekly report.

Our preference is for prices to be on the upward move, while holding above the December 22 low at 1074.90. Keeping the two alternative views from the last week’s report, we would be expecting a rise at least to around the 1,150 to the 1,170 levels, with our bearish outlook given in the second chart. On the other hand, if the bullish outlook given in the main chart is to materialize, then we are likely to see a new high in gold prices, during the upcoming days.

As a result of our current preferred and alternative outlooks, we expect a bullish candle for the upcoming week or weeks

 

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Gold - January 11, 2010

Summary

• Long term outlook: Up
• Medium Term Outlook: Down
• Short Term Outlook: Sideways to Up
• Revision Point: Break above 1260
• Potential Medium Term Targets: 680 and lower
• Current Position: Bullish at 1094.00 in a zero potential loss position.

The price advanced almost exactly as anticipated in our last weekly report. It seems that we have either completed or are very close to completing three waves in the rally starting on December 22, 2009. As a preferred scenario, we expect the upcoming days to see the prices push further up to the 1150 mark without breaking below the 1119.00 level from where we are likely to see a pull back close to 1100 without breaking below the 1074 low of December 22, 2009.

The second image shows our alternative scenario for the time being. According to the alternative scenario, the December 11, 2009 low saw the completion of wave i or a down, after which we are seeing the prices forming what elliotticians call an ‘expanded flat’. If this scenario is to hold correct, we would then see the price going lower than the December 22 lows after the completion of the current five wave rally.

However, in either case, we would expect to see an initial rise in prices before the down move is started. As a result, it seems advisable to hold on to our long position in Gold, especially when it is now in a potentially no-loss situation.

 

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Gold January 18, 2010

Summary

• Long term outlook: Up
• Medium Term Outlook: Down
• Short Term Outlook: Sideways to Down
• Revision Point: Break above 1260
• Potential Medium Term Targets: 680 and lower
• Current Position: Bearish at 1147.00 in a zero potential loss position.

Confirming our assessment presented in the last Weekly Report, the last week saw a rise to the 1161.75 level, from where we saw a turn around taking the prices to below the 1119.00 level. This move allows our basic outlook presented in the last Report to remain unchanged. January 11 high at 1161.75 seems to be in a position of wave ‘i’ or ‘a’ high, with the January 13 low as wave a.ii and the January 14 high as wave b.ii. If this scenario is correct, we are then likely to see a downward move to begin the next week to complete wave c.ii, going down in the vicinity of 1109 to 1093, without breaking above the January 14 high at 1146.05. From there we should see the start of another upward move to complete wave ‘iii’ or ‘c’.

However, as a minor alternative to this, primarily, bullish scenario, as the second image depicts, we may have just seen the completion of wave a.B at the January 14 high. This would imply that before breaking below the January 13 low at 1118.97, we are likely to see an upward move going close to the 1154 mark, before we see the resumption of the downward move, which started January 11, 2010. In this scenario, as opposed to the first scenario, we are likely to see a break above the 1146.05 mark before the downward move to complete wave ii.

With these two versions of a primarily bullish scenario for the upcoming days, our bearish alternative is presented in third image. As per this scenario, we have completed wave ‘ii or b’ at the top of the January 11 high and are already in the initial phase of the third wave of a medium term downward move.

With our preferred scenario, we are already short in Gold at 1147 with the first target at 1120 (already achieved) and the stop for the remaining lot now brought down to the breakeven point at 1147. In case our stop is taken out, without breaking below the 1119 level, we shall be looking for the next shorting opportunity close to the 1154 level, while keeping below the 1161.75 mark.

 

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Gold - January 25, 2010

Summary

Long term outlook: Up
Medium Term Outlook: Down
Short Term Outlook: Sideways to Up
Revision Point: Break above 1260
Potential Medium Term Targets: 680 and lower
Current Position: Bear Positions covered. Looking for Low risk High probability setups for taking Long positions.

The last week saw a low of 1082.62, which allows us to keep to our preferred outlook presented in the last week’s report, as that outlook will be invalidated only if we get a break below the December 22, 2009 low of 1074.90.

The main image shows our preferred outlook for the upcoming days. As long as the price remains above the 1074.90 mark, we will consider the possibility of an upward move breaking the January 11, 2010 high at 1161.75 (possible targets at 1169 and then 1194) to be more likely. However, a break below the December 22, 2009 low will render this outlook nullified and our alternative outlook(s) will then be more considerable.

In the event of getting a break below 1074.90, we can have a few different possible scenarios. The second image presents only one of those possibilities. As per this outlook, a break below the 1074.90 mark will mean that we have a completed wave ii of b at the top of January 11, 2010 high at 1161.75 and are in the wave iii or c down, in which we are likely to see a fall close to the 1045 and then possibly the 1000 mark.

With our preferred outlook, we shall be looking for long positions in the vicinity of 1099, as long as the price remains above 1074.90. Our target will be 1169, 1194 and then possibly a break above the December 3, 2010 high at 1226.30.

 

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Gold - February 01, 2010

Summary

• Long term outlook: Up
• Medium Term Outlook: Down
• Short Term Outlook: Sideways to Up
• Revision Point: Break above 1260
• Potential Medium Term Targets: 680 and lower
• Current Position: Bear Positions covered. Looking for Low risk High probability setups for taking Long positions.

On January 28, 2010, the price broke below the cut off point for our preferred count at 1074.90 and touched 1074.55, mocking at us that we had covered our short positions too early. For this week’s report, before assessing the immediate moves in the market, let us review our longer term perspective. The main image presents the weekly chart of Gold. The March 21, 2008 high is our prospective wave 1 or A followed by a three wave A (in red) and again a three wave B (in red) with a possible end at the December 4, 2009 high at 1226.30. If this is correct, then we are most likely witnessing a long term correction in the shape of a ‘Flat’ – most likely an ‘Expanded Flat’ – with a minimum target for wave C (in red) October 24, 2008 low at 681.75.

With this longer term scenario as our current perspective, let us now take a look at the daily chart to make an assessment of the moves expected in the upcoming days. As the second image shows, as per our preferred scenario, we most likely have a completed wave ii at the January 11, 2010 high at 1161.75. Since then, we have had a possible 3 wave move down at or near completion. If this scenario is to hold good, we are soon likely to see a possible wave 4 pull back developing which should be seen as a shorting opportunity, at the emergence of low risk high probability sell signals, for a possible ride down in the fifth wave. However, before that, a small longing opportunity is likely to materialize at the start of the possible fourth wave rally.

However, as a short term alternative to our preferred scenario, we may have had the first wave completing at the December 22 low, wave a of 2 at the January 11, 2010 high at 1161.75, wave b of 2 at or near completion at the weekly closing price and a wave c of 2 to follow, which is likely to take the price above the January 11, 2010 high at 1161.75.

 

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Gold - February 08, 2010

Summary

• Long term outlook: Up
• Medium Term Outlook: Down
• Short Term Outlook: Sideways to Up
• Revision Point: Break above 1260
• Potential Medium Term Targets: 680 and lower
• Preferred Strategy: Short Term Buy opportunity may be explored at the emergence of a Low risk High Probability buy signal on an intraday chart. However, for a slightly longer term, the pull back should be used as a selling opportunity.

With wave i or a at the December 22, 2009 low (1074.90) and wave ii or b at the January 11, 2010 high (1161.75), we now seem to have formed wave 1 of iii or c down of which the fifth sub-wave seems to be at or near its completion at the February 5, 2010 low (1044.55).

If our understanding of the internal marking of the potential wave 1 of iii or c decline is correct, then we can develop two clear alternatives from this information. As per our preferred (bearish) scenario, according to which, the December 22, ’09 low is wave i and the January 11, ’10 high is wave ii, the January 5, ’10 low is in a position to be sub-wave 1 of wave iii. As a result, as the second image shows, we would expect a corrective pull back in the upcoming days, once the sub-wave 5 of wave 1 of iii is completed. However, as per this scenario, we should get a long and swift move down for wave 3 of iii at the end of that pull back, which may provide a very lucrative shorting opportunity.

As per our alternative (bullish) scenario, the December 22, ’09 low is taken as wave a followed by wave b at the January 11, ’10 high and at the completion of sub-wave 5 of the current downward move will signal the completion of wave c. Subsequently, we should see the resumption of the longer term uptrend, which would most likely take the price to new all time highs.

 

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Gold - February 15, 2010

Summary
Long term outlook: Up
Medium Term Outlook: Down
Short Term Outlook: Sideways to Up
Revision Point: Break above 1260
Potential Medium Term Targets: 680 and lower
Preferred Strategy: Take short term positions only, till we see an end of the corrective phase..

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Without any change in or basic outlook, as presented in the last week’s report, we expect the completion of wave A.ii.3 at or around the February 11, ’10 high at 1097.85. If wave A.ii.3 has already completed at the February 11, ’10 high, then we would expect a 3-3-5 or a Flat correction to complete wave ii.3. Thus, if this scenario is correct, and if wave A.ii.3 has already completed, we would then expect wave B.ii.3 to come down close to, or even below, the start of wave A.ii.3 (1044.55). On the other hand, if A.ii.3 is not yet complete, then the form of correction may be different.

The alternative scenario to keep in mind, which may currently be beneficial for forming our entry and exit strategies is given in the second image. As per this alternative, after the December 22, ’09 low as wave 1, we are in a second wave Expanded Flat, with wave A of the Expanded Flat completing at January 11, ’10, wave B at the February 5, ’10 low and now we are setting off on a C wave rally to complete wave 2. In this scenario, the target of wave 2 will be above the January 11, ’10 high at 1161.75.

 

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Gold - February 21, 2010

Summary

Long term outlook: Up
Medium Term Outlook: Down
Short Term Outlook: Sideways to Up
Revision Point: Break above 1260
Potential Medium Term Targets: 680 and lower
Preferred Strategy: Take short term positions only, till we see an end of the corrective phase.

The price action during the last week invalidated our preferred count and raised our previously alternative count to the preferred status.

With a possible wave 1 at the December 22, ’09 low (1074.90), followed by wave A.2 at the January 11, ’10 high (1161.75), wave B.2 at the February 5, ’10 low, we are now in the making of a five wave advance to complete wave C.2. As per this scenario, our target for the completion of wave 2 will be above the January11, ’10 high at 1161 and close to the 1185 to the 1190 level, but keeping below the December 3, ’10 highs at 1126.30). However, given our current outlook, we will expect a downward move at the completion of wave 2 to make lows below the February 5’10 low.

As a current alternative, we have a completed wave 2 at the January 11, ’10 high (1161.75) followed by wave I.3 at the January 28, ’10 low, followed by a.II at the February 3, ’10 high (1125.10), wave b.II at the February 5, ’10 low and now forming wave c.II to complete wave II.3. As per this alternative scenario, we would expect wave c.II to terminate at around the 1137 level, from where the downward move can be expected to resume

 

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Gold - February 27, 2010

Summary

Long term outlook: Up
Medium Term Outlook: Down
Short Term Outlook: Sideways to Down
Revision Point: Break above 1260
Potential Medium Term Targets: 680 and lower
Preferred Strategy: Take short term positions only, till we see an end of the corrective phase.

The market did not have any surprises during the last week. The price unfolded quite as expected. With a completed wave 2 at the January 11, ’10 high (1161.75) followed by wave I.3 at the January 28, ’10 low, followed by a.II at the February 3, ’10 high (1125.10), wave b.II at the February 5, ’10 low. We are now at or close to the completion of what we expect to be wave c.II. However, there still seems to be a potential for the price reaching close to the 1138 to 1142 mark.

It is also important to keep in mind an alternative interpretation of the move down since December 03, ’09, while planning any potential trades:

With a possible wave 1 at the December 22, ’09 low (1074.90), followed by wave A.2 at the January 11, ’10 high (1161.75), wave B.2 at the February 5, ’10 low (1044.55), we are now in the making of a five wave advance to complete wave C.2. As per this scenario, our target for the completion of wave 2 will be above the January 11, ’10 high at 1161 and close to the 1185 to the 1190 level, but keeping below the December 3, ’10 highs at 1126.30).

 

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Gold - March 07, 2010

Summary

Long term outlook: Up
Medium Term Outlook: Down
Short Term Outlook: Sideways to Down
Revision Point: Break above 1260
Potential Medium Term Targets: 680 and lower
Preferred Strategy: Take short term positions only, till we see an end of the corrective phase.

There is no change in the situation, as it appeared at the time of our last report. Both the alternatives presented in our last report are still valid. We present our current report with updated images and reproducing the relevant parts of the last report:

With a completed wave 2 at the January 11, ’10 high (1161.75) followed by wave I.3 at the January 28, ’10 low, followed by a.II at the February 3, ’10 high (1125.10), wave b.II at the February 5, ’10 low. We are now at or close to the completion of what we expect to be wave c.II. However, there still seems to be a potential for the price reaching close to the 1138 to 1142 mark.

It is also important to keep in mind an alternative interpretation of the move down since December 03, ’09, while planning any potential trades (as presented in the second image):

With a possible wave 1 at the December 22, ’09 low (1074.90), followed by wave A.2 at the January 11, ’10 high (1161.75), wave B.2 at the February 5, ’10 low (1044.55), we are now in the making of a five wave advance to complete wave C.2. As per this scenario, our target for the completion of wave 2 will be above the January 11, ’10 high at 1161 and close to the 1185 to the 1190 level, but keeping below the December 3, ’10 highs at 1126.30).

 

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Gold - March 15, 2010

Summary

Long term outlook: Up
Medium Term Outlook: Down
Short Term Outlook: Sideways to Down
Revision Point: Break above 1260
Potential Medium Term Targets: 680 and lower

Preferred Strategy: Take short term positions only, till we see an end of the corrective phase.
The market saw a decline during the last week. We may have seen the completion of wave II.3 at the March 3, ’10 high (1045.10) – as shown in the main image. This would imply that we are now in the third wave decline. If this is correct, then we are likely to see the swiftest and the longest sell off awaiting us in the upcoming days, without getting a break above the March 3, ’10 high at 1045.10. This sell off, if it is a thirdwave sell off, is likely to be longer in magnitude than the sell off witnessed from December 3, ’09 high (1226.30) to the December 22, 09 low (1074.90).

Alternatively, the March 3. ’10 high may not be a completed wave II.3, but rather a wave b of a possible second wave Expanded Flat correction underway, after the completion of a possible wave i.C.2 at the February 22, ’10 high (1130.85). If this scenario is to hold valid, we are likely to see a wave iii.C.2 rally in the upcoming days, taking the price above the February 22, ’10. However, before this rally, we are likely to see fall below the February 25, ’10 low at the 1087.72 mark, possibly to between the 1080 to 1070 mark, completing wave c.ii.C.2.