Since my last report some 5 month ago see here: http://www.safehaven.com/article/30253/market-report-gold-to-go-to-700-or-3000 the market appears to have made its intentions of more downside.
This chart was in that article, and you can clearly see that our line in the sand was $1450.
I also wrote this:
"The bear case suggests the market is about to start to accelerate lower in what Elliotticians call a "3rd of 3rd", so we are unlikely to see a strong break above $1400-1425 and any bounce will be corrective and more downside is expected."
The actual downside was further than I initially thought, but the resultant bounce failed to get above our line in the sand at $1450 and subsequently rallied in a corrective structure, thus has likely confirmed the bearish case of more downside and a test of the $1180 area towards $1150, although I have adjusted the idea a little, I am still expecting a test $1150 before we see a stronger bounce back to the $1400 again.
Hopefully by the time we see under $1180 the media will be freaking out and probably have the likes of Peter Schiff on for a media appearance, maybe even mocking him. (Good sign that a low is near)
If you look back to the time when Gold put in the lows at $1180 the media did an interview with Peter Schiff and were mocking him for his Gold call.
When the media is in a state of panic and freaking out, when Gold bulls are being mocked that's usually the time a market turn is close.
Currently Gold is still on a sell on all time frames under $1293, there are a few ideas I am watching.
One idea is a triangle for wave 4 of [3]. I would need to see a reversal above $1293 to start to look at other options but suffice to say, failing to see a move above $1293 suggests more downside and target under $1180.
Whilst it's been some time since I last wrote about Gold. Members at WPT have been trading the swings as usual with some members making great profits, with the help of our Elliott Wave maps, it has clearly aided members, week after week members have known where Gold was likely going regardless of the FOMC meetings in between. For $15 a month some members have expressed it's the bargain of a lifetime.
Short term charts will need to continue with the downside from here, a quick acceleration would really scare many Gold bulls, and if I could chose I would like to see a scary spike lower and really "stick" it to the bulls, thereby pushing lower towards our targets under $1180.
AUY (Yamana Gold)
This stock appears to be close to setting up for a buying opportunity, with all the negativity in the media and even on financial websites, it seems the love is almost gone for Gold stocks, that's the sort of negativity I thrive on and like to see when I am looking for a low in a market.
As they say, "you should be buying when you crying, selling when you are yelling"
I suspect this is now in a final 5th wave and close to ending the trend that started from the 2012 peak. Having retraced over 50%, it's now that I think it offers a great potential buying opportunity.
I am closely watching this stock, when I think its close I will be informing members and readers of the Gold stocks news letter to the potential buying opportunity and set up. It appears that wave 5 could be a small ending diagonal (ED). If so we should see a small wedge, that's a great clue that the trend is exhausted and ready to set up for a reversal to the upside.
Gold Stocks Newsletter
I have been closely watching many Gold stocks for members; slowly I have amassed a large number that I decided to produce a report each monthly for members, which on its own can be purchased for $20 a month see here: http://www.wavepatterntraders.com/topic/1818-gold-stocks-report-gg-abx-nem-bvn-kgc-gfi-gold-hui/page__pid__53287#entry53287
It is however free and available for downloading to members of both the US stocks section and commodities section.
I see some great opportunities for both Gold and Gold stocks, whilst the trade this year has been sell Gold and Gold stocks, in fact anything Gold related, buy US stocks, I believe based on where the US stock markets reside and where many Gold stocks are with respect to their Elliott Wave patterns, things are about to get really shaken up and a complete reversal of the trade we have been seeing the past 12 months is going to be seen.
What I mean is we could see a complete 180 of that trade. Gold and Gold stocks move higher, US stocks and equities move lower.
Ask yourselves this question?
What is going to offer you value, GOOG at $1000 and near a potential top? Or any of the battered Gold stocks that are 50-70% off their peaks.
The situation we have in the US markets reminds me of the peak around the 2000 top.
If you look at the chart we can clearly see Gold stocks started their moves higher as US equities moved lower.
I strongly suspect we are setting up for something similar again. The situation we have today is completely different to what we had in 2008. Gold stocks have already crashed so they are limited to the downside, if anything, a move lower in US equities I suspect could ignite a move back into Gold and Gold stocks as a possible fear trade. It remains to be seen if that is the case.
I think the bulls are close to getting close to ramming their horns right through the buttocks of the bears. Based on the readings of their patterns, I think many of the Gold stocks are very close to setting up for some substantial and tradable moves.
Remember "It's always the darkest before dawn"
Dawn is fast approaching on Gold and Gold stocks.
Until next time,
Have a profitable week ahead.
