Elliott Wave 5.0 "Reboot"

Friday, February 22, 2013

Gold Crash, Or Just a Correction? Weekly Chart.

                      Gold Pullback Explained - YouTube Peter Schiff Report.

  This is the gold daily chart with the DOW and the SP500 added in for a comparison. The SP500 and the DOW (blue and red) show that they are in sync with gold, and only in the last 4 months gold has been out of sync. I have mentioned that there seems to be divergence in the markets, and this DOW/SP500/GOLD chart shows it better than I can explain it. 
A big and true divergence like what we had in 1996-2000 is not going to happen as those are very rare historical events.  In the end, if we go for the big one that all the GSC degree wave analysts say we are going to get, then all three charts above will surely sync down!   But gold stocks are not going to let this happen as gold stock ETF's such as GLDX are getting extremely oversold.  

On this weekly gold chart we can see that this week produced a very nice sharp spike to the downside. Except for opening move spikes, a long spike like this on a weekly chart only improves the odds of gold going the exact opposite way. I am keeping my bullish wave count open as a potential 4th wave in Primary degree, or Intermediate degree. Either way the gold stocks will put a bottom to gold, just like they did in 2008.

 Dumb money listening to dumb fundamentals are selling out, so this means gold will soon go the opposite way.  Since the 2011 top in gold, we have had a sideways to downward trend, and when I see that, then the gold price can always counter rally and retrace the entire gold correction to date. It is the mood of the majority of players, that is making gold crash as the weekly chart clearly shows. But the majority are "always" wrong when they are in sync with the charts price actions. 

Even if gold imploded down to $1000 tomorrow, then I would still expect gold to retrace all the way back up to $1900 or much higher. Then $2000 or $2200 gold would not be a ridicules target.  I will never deliberately try and show you a wave count that is bearish along with the general public, as that is always the easiest thing to create, but it is most always wrong.