Gold Where We Are Now

Thursday April 18 2013

Gold

Prior to the break of 1525, the gold bug community was citing that as support. Now that 1525 was crushed there is another round of explanations why it happened. I see the 288 day MA line being cited as support. I am sticking with Ramki's explanation. See previous post April 16.  We are at 1390 today. He expected a fourth wave in a larger third wave to move to 1420-1430. that is pretty close. Then a final fifth wave down hits. That would take gold to a new low say 1275 to 1300. I am guessing the end of the month, April 30. Then we could expect a fourth wave up into June. No doubt that will encourage bulls but the final Large Fifth Wave low, like the March 2009 low for stocks, would still lie ahead this Fall. By that time the bulls will be out of excuses. That is my template for the time being At present I do not own any gold positions. 

this suggests a fifth wave or completion of the Large Wave 3 at 1300 or below by month end. 

Why is this the correct interpretation?  Look at the breakdown on the long term monthly chart.

Monthly Gold

For the first time since the breakout in 2003 Gold closed below its 50 month Moving Average. This surely targets a re test of the top of the 2008-2009 debacle. Testing the top at 1000 would leave it in an uptrend but would leave most out of the game for the final run up to some sort of top later in the decade. 

Wells Wilder made the point that one needs to trade in the direction of the trend, if you are wrong the trend then bails you out. So we wait for another recovery. 

Thanks for reading The Market Perspective.

 

Comments

[Farley]

The $GOLD Technicals were (intentionally or accidentally)-Decimated to below its 200-Week-LOW-Moving-Average-(now resistance)=1406.

SO Current-$GOLD=1391 needs to move back up and through 1406 for 1406 to become support.

OTHERWISE

I see a Current-365-Week-LOW-Moving-Avg=1110 as a Significant-Line-n-the-Sand.

$SILVER=23.24 and it's Current-365-Week-LOW-Moving-Avg isn't as bad coming in at $20.10.

AND

The FED did say they needed 7-Years to get some $GOLD back to Germany.

Perhaps they really are Out-o-$GOLD and looking for The-Cheap-Stuff ???