Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Tesla Robo Taxis are Coming THIS YEAR! - 16th June 24
Will NVDA Crash the Market? - 16th June 24
Inflation Is Dead! Or Is It? - 16th June 24
Investors Are Forever Blowing Bubbles - 16th June 24
Stock Market Investor Sentiment - 8th June 24
S&P 494 Stocks Then & Now - 8th June 24
As Stocks Bears Begin To Hibernate, It's Now Time To Worry About A Bear Market - 8th June 24
Gold, Silver and Crypto | How Charts Look Before US Dollar Meltdown - 8th June 24
Gold & Silver Get Slammed on Positive Economic Reports - 8th June 24
Gold Summer Doldrums - 8th June 24
S&P USD Correction - 7th June 24
Israel's Smoke and Mirrors Fake War on Gaza - 7th June 24
US Banking Crisis 2024 That No One Is Paying Attention To - 7th June 24
The Fed Leads and the Market Follows? It's a Big Fat MYTH - 7th June 24
How Much Gold Is There In the World? - 7th June 24
Is There a Financial Crisis Bubbling Under the Surface? - 7th June 24
Bitcoin Trend Forecast, Crypto's Exit Strategy - 31st May 24
Zimbabwe Officials Already Looking to Inflate New Gold-Backed Currency - 31st May 24
India Silver Imports Have Already Topped 2023 Total - 31st May 24
Gold Has Done Its Job – Isn’t That Enough? - 31st May 24
Gold Stocks Catching Up - 31st May 24
Time to take the RED Pill - 28th May 24
US Economy Slowing Slipping into Recession, But Not There Yet - 28th May 24
Gold vs. Silver – Very Important Medium-term Signal - 28th May 24
Is Gold Price Heading to $2,275 - 2,280? - 28th May 24
Stocks Bull Market Smoking Gun - 25th May 24
Congress Moves against Totalitarian Central Bank Digital Currency Schemes - 25th May 24
Government Tinkering With Prices Is Like Hiding All of the Street Signs - 25th May 24
Gold Mid Tier Mining Stocks Fundamentals - 25th May 24
Why US Interest Rates are a Nothing Burger - 24th May 24
Big Banks Are Pressuring The Fed To Losen Protection For Depositors - 24th May 24
Another Bank Failure: How to Tell if Your Bank is At Risk - 24th May 24
AI Stocks Portfolio and Tesla - 23rd May 24
All That Glitters Isn't Gold: Silver Has Outperformed Gold During This Gold Bull Run - 23rd May 24
Gold and Silver Expose Stock Market’s Phony Gains - 23rd May 24
S&P 500 Cyclical Relative Performance: Stocks Nearing Fully Valued - 23rd May 24
Nvidia NVDA Stock Earnings Rumble After Hours - 22nd May 24
Stock Market Trend Forecasts for 2024 and 2025 - 21st May 24
Silver Price Forecast: Trumpeting the Jubilee | Sovereign Debt Defaults - 21st May 24
Bitcoin Bull Market Bubble MANIA Rug Pulls 2024! - 19th May 24
Important Economic And Geopolitical Questions And Their Answers! - 19th May 24
Pakistan UN Ambassador Grows Some Balls Accuses Israel of Being Like Nazi Germany - 19th May 24
Could We See $27,000 Gold? - 19th May 24
Gold Mining Stocks Fundamentals - 19th May 24
The Gold and Silver Ship Will Set Sail! - 19th May 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Gold GLD and Silver SLV ETFs Forecast Updates

Commodities / Gold & Silver 2009 Dec 07, 2009 - 02:49 AM GMT

By: Piazzi

Commodities

Best Financial Markets Analysis ArticleThe last time I wrote about GLD and SLV, November 21, I said this about GLD

It may be a bit extended for new positions as it is quite a bit of distance from all of its MAs. If the current count is correct, GLD may be near the end of its Intermediate wave 3, or that wave may be extending


And

Weekly price has started a vertical ascent, which is supportive of the bullish count and the notion of an intermediate degree 3rd wave. But the vertical nature of the past few weeks, and the high volume bars, make me a bit nervous that we may have a buyer exhaustion setting in soon.

And this about both metals

I’d rather be cautious and try to protect what I might have built in for now.

That was two week ago. At the time SLV was at 18.22, and GLD was at 112.94. Since then, SLV rose to an intraday high of 19.11 and GLD to an intraday high of 119.54. This Friday, SLV closed at 18.15, and GLD at 113.75. In the same post, I said that I had a target of 116.50 for GLD and 19.20 for SLV

So, it seems like it was not bad thing to avoid new positions, to take care of existing positions, and to have some well-calculated target areas in mind as our guides.

We did all that by just following our charts, applying finely tuned technical measures, and mainly ignoring expert opinions offered by main stream financial media. The past is the past. We gladly take credit for a job well done. We move on, and ask the only relevant question:

What about now?

This is a daily chart of GLD

Look at the volume on Friday. You probably have heard many stories. Like dollar’s on the rise. FED is about to drain liquidity. Job numbers were good,. ETC, ETC. They all may be right or not, relevant or not. Still, not many told us that we had a wave structure that looked about complete. We had an issue that looked seriously extended on daily and weekly frames. We had everybody talking about precious metals and currency problems. Not many told us that we had a situation where PM miners were not doing all that much better than gold.  I do believe that in a healthy commodity environment, the commodity producers should do better than the commodity itself. And by that I mean broadly across the group.

GLD may very well have entered a correction that might lead to a trend change. If the overall structure of the above count is correct, we may have seen the end of Intermediate wave 3. Only a new high would invalidate that possibility.

To the downside, only an overlap with the Intermediate wave 1 (purple) would put the current count under suspicion. Those are very poor trade parameters because they cover a wide range from 95 to 120. Not only that, shorting GLD now, exposes the shorter to some 8-10% risk before the tightest stop is hit.

Still, operating within the premises of the current count, and assuming that we have seen the end of Intermediate wave 3, if I wanted to narrow things a little, I could argue that due to the strength of the Minor wave 5 of Intermediate wave 3, we have a good probability for the correction to be at most limited to the area of Minor wave 4, that is, 101-104. That would be about 50-62% retracement of Intermediate wave 3.

GLD hit a high of 119+ which comes close to 2.62 * Intermediate wave 1.

Timewise, Intermediate 3 took 1.62 * the time taken for Intermediate 1 + Intermediate 2. If I project a 2.62 extension of the time of Intermediate 1 + Intermediate 2, it will give sometime early in March, 2010. That time frame corresponds with a seasonal period of strength that runs from March to July.

So, there it is, my first crack at projecting things assuming that

  1. My overall count is correct
  2. We have seen the end of Intermediate wave 3

I have seen bearish wave counts for gold that argue that the advance since the lows of 2008 is a wave B up – to be followed by a wave C down type of crash.

That would make a hell of a wave B. Maybe they are right, but it just doesn’t cut it for me right now.

It doesn’t matter, really. They expect a crash, I expect a correction, so, if either party is right, we should see lower prices, we’ll then re-evaluate as waves unfold.

This is a weekly with both my counts and the bullish one being the preferred count

Some of you may remember when I was talking about the triangular range around 95, and the breakout to the upside. Then we started talking about a possible Inv H&S  and we were saying that if gold wanted to go, it just had to go, no dilly-dally, if-but-maybe-this-maybe-that;  just break out on good volume and go, and it did that.

And that, to me, is the essence of market participation. One sees a setup, defines one’s conditions and parameters, and acts.

Now the 100 level on GLD, or 1000 on gold is a must hold. But, before that, we have the top of Intermediate wave 1 (purple) that should ideally not be overlapped if my preferred count is correct
--------------------------------------------------------------

For SLV My target prices did very well. Because silver did not have the vertical ascent of gold, I lasted a bit longer before taking whatever defensive measures I deemed necessary.

  This is a daily chart of SLV

Same story as gold. It looks done, or almost done, and if the count is correct, a correction to the area of minor wave 4 (16 – 17.5) is a likely target at this point.

I need to remind you that even if we have topped, we are so early that I am just doing ballparks.

Silver’s high point came at Intermediate 3 = 1.62 * intermediate 1.

It took intermediate 3 about 1.62 * time taken for (Intermediate 1 + Intermediate 2), and if I project an Intermediate 4 at 2.62 * (Intermediate 1 + Intermediate 2), It gives me end of February 2010, which is basically the same as what I projected for gold.

Once again, all targets and projections are theoretical. For price projections, it is an area that I seek not a pin point, and for time projections, it is a period that I seek and not the exact second of some big bang event.

So far, Gold has been a leader, and that, IMO, is not a very desirable situation to have for a long lasting PM bull environment. Maybe things have changed. But I still think that in a good PM environment those with more leverage to the price of the metal should lead. So if my count is correct and there is a major wave 3 and an Intermediate wave 3 to come, at so point miners, especially the juniors, should do very, very well. So, keep an eye on the performance of seniors versus gold, and juniors versus seniors.

Also, if this thing is for real, silver may do a lot better in terms of performance as the PM bull ages.

This is a weekly chart of SLV

What happened on Friday served as a reminder of what I always say to keep myself alert:

The doors of crowded places are narrow and few.

Have a Nice Day!

By Piazzi

http://markettime.blogspot.com/

I am a self taught market participant with more than 12 years of managing my own money. My main approach is to study macro level conditions affecting the markets, and then use technical analysis to either find opportunities or stay out of trouble. Staying out of trouble (a.k.a Loss) is more important to me than making profits. In addition to my self studies of the markets, I have studied Objective Elliott Wave (OEW) under tutorship of Tony Caldaro.

© 2009 Copyright Piazzi - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in