Babson chart for RGLD. A blue-chip gold share I'd like to buy at R1 with a 40% gain ahead as it returns to the high--assuming gold finds a low nearby. Notice the 200 dma. Would yield about 1.45% if bought at R1 over the next three weeks. Looks to be in w.iv of a C wave down. Staying patient.
I thought it was an excellent presentation and it gave me a whole new perspective and seriousness about possibilities that I really appreciate. A lot is at stake.
I still have questions about some of the details, but perhaps they don't matter. Such details include the W.2 and W.4 retracements within the massive rally from 1999, and also the first wave down (his label) from the all-time high being a simple straight drop of 13 DAYS (that I can't count as a classic 5 wave--but maybe it's a "leading diagonal"--on the hourly chart-- a new wave form ?)--out of a 51 MONTH corrective W.A. It appears either new wave forms have been observed and accepted at EW International, or these smaller wave counts that don't follow certain rules have been made to fit a larger concept or belief about where gold is going longer term (a strongly deflationary scenario).
I believe all theories of price movement change to fit the changing behaviors of markets. Corrections get more and more complex, for example. Markets have surely changed since R.N. Elliott lived. We might look for certainty in these patterns but all we find is uncertainty, really--or better said, only probabilities.
Since I've been "hiding out" in gold and silver since first purchases in the 400s and 4.50, I guess I've been extremely lucky to have been positioned in a massive bull wave and have endured only relatively minor price deterioration in the "wave 4" (2008 crash) and W.A (since 2011) without buying too much additional metal and holding losses on those purchases.
I think for me the proof of his count will be at the B wave top. The start of the next leg up to that top is very near. I will have some major decisions to make up there, and I'm sure I will be selling/taking profits and hedging a lot of my portfolio. It would be a last chance to do so if Tom is correct, before the hugely deflationary C wave--and it's wise to seriously consider his position, in my opinion. He is a professional wave counter, and I'm just a piker. I'll always hold a core metals position; the question is, how much.
I have been feeling more and more suspicious of the popularization of gold as an investment. And I also realize that gold is widely held by large financial institutions as liquidity to be tapped--sold-- as needed, when TSHTF.
Pete: Isn't it possible that wave 4 down is ongoing, with a to where you labelled 4, b to where you have 5 short, and a 5 wave c in hand at the moment, and we are in 4th of c down of 4 down.
In this case if c of 4 down penetrates the wave 1 high of last May, getting close to trendline R1, and approaching the price gap of early June and thr rising 200 moving average, then the whole uptrend, assuming it remains a "five" would become a rising wedge formation due to overlapping corrections, - essentially a rising expanding formation.
A possibility like the other, price must define it. The 38% support has become the division between an impulsive rise or a correctional rise, with implications for the next downswing of larger scale whenever that comes.
Excellent comments Pete which I think echo the sentiments from a lot of us. I can only restate that when I began a career in TA, I became an EW disciple. It was one of my favorite tools of the trade. At the time I read every book I could get my hands on, including Elliot's original work. Now, if the markets are truly manipulated and we no longer have free markets, then you can throw out all the TA, which will be used against you to reach any comfortable conclusions or probabilities about risk. A.M. will probably disagree, but then it is the market letter writers that want you to believe in the 'no manipulation' theory because sensibly why would anyone want to trade in a Wall Street casino? Why would anyone even consider trading in a negative expectation game? With no subscription to sell, no income. BTW, I can't tell if we have arrived at the 'setup for the big trade' or not. I certainly wish I knew. And that leaves those who want to protect themselves, using gold as insurance, in one hell of a dilemma. Can they manipulate it to zero, or $150/oz? TPTB (bankers) will do everything in their power to maintain control. I especially share you sentiments about the popularization of gold as an investment. Those ads from the coin dealers make me nervous. Another question is if one does not own gold as insurance, can you tell me of another asset class for protecting one's money? Seems to me it's either "be right and sit tight" or "be long and stay wrong".
I am reminded of the following quote by Mark Twain:
"It ain't what you don't know that gets you into trouble. It's what you know for sure that just ain't so."
I have come to the realization that I'm a dinosaur of TA. I realize I no longer have or had an edge as I once did.
Scenario A: The central banks get a kick out of the global economy, and print like crazy, and stocks break to higher levels, and in inflation with rising stocks to lure capital where will gold go then?
or Scenario B: They try to do the above and it stalls, and the global economy is in a situation where everything including the kitchen sink has been thrown at it to no result. Depression. Bonds get a longer period at highs which suits certain levels of society more and other levels less, and bonds remain able to contain the capital reservoir for longer.
But holding stocks or bonds at highs works against the Wall St collective who want to run it up and run it down irregularly and front run everybody in the process.
Conclusion: There is conflict in high places. Older bigger money has decided that the Rs and Ds, and the Wall St gangs are taking too much of older bigger money's pie. They are already doing something about this, across the globe. And the Trump candidacy's overt opponents and hidden supporters has revealed who will lose and who will win out of two of the three or more present owners of neo-capitalism are run out of town on a rail. The predatory political class are now at war one several previous partners because of their destructive greed. They were welcome to play the old game, but not to collapse and end it, and that's exactly what they are doing. look to the other owners of the game for reaction.
What can be seen is multinational politics are in conflict with multinational "business". The UN, IMF, BIS, World Bank are all active. But new alternative versions of these are in existence too. There is a new group, partner or opponents, we do not get told which.
So I have come to the conclusion, rightly or wrongly, that the fate of stocks will be the "tell" and am working on identification of critical stock-political triggering criteria for the past several weeks now. It's all happening within a few months, with long term trends to be generated from the short term. In my opinion.
So what about gold? There must be an alt EW count to allow for possible very different situation. Here is what that may be, as defined in Elliot Wave: Is the move from 1999 to 2011 a wave three top or a wave top? Are we in wave 4 down or wave A down? I respect Tom Denham's views, and Glen Neely's, basically trading a possible B up until it isn't that, but in my humble opinion, either count is possible, and the different outlooks have a gigantic gap between them. So ... where is the stop level that defines rejection of the "we are in a 4th and 2011 at 1950 was only the top of three up? That stop (in gold) is the decision between depression and war, or inflation and less war. Nobody is discussing that stop anywhere.
In looking to answer this, I am making a multi hour video to document the phases, and inflections which construct a bigger inflection. Looking back 18 years (say 16-20 years) is easy. The central bankers are looking back 37 years, with a cautious eye to what happened 75 years ago in the 1930s. But .... in my opinion ... this inflection may very easily be of larger scale than that. A cursory look at very long term interest rates provides certain clues as to how much larger, but no firm answer. I do have my ideas on this however. My thinking is that we are in at least a single higher order than 75 years and probably two higher orders than that. In which case the cure being implemented by the money wizards - unilaterally - is a treatment for the wrong condition.
Say we go back 150 years. The native americans had their lands taken, and resource extraction began. Now there are no new lands to take, but the wars continue regardless of this. Antarctica? Mars? Is a race to colonize new territory apparent?
So this particular cycle is connected (for one matter) to the growth, territorial increases through conquest, of the United States of America. Look around. Is the US opening new bases today, losing them, or fighting to retain those bases across it's geographical area of influence and control? Does a certain time period provide more context for what is going on?
Back to finance.
Because of the sub cycles, the "macro prudential economic works", to coin a generous descriptive phrase, may appear to work for a while, which is why patience is required. All political movements not of the political class are denigrated as "extreme populism" and receive the Trump media treatment thus confirming their inherent legitimacy by their enemies' qualities.
Bigger forces for once in a millennia have interests that are in parallel with those of the individual.
But longer cycles take several turns of sub cycles to get round the corner. Take for example that 8 year gold cycle that bottomed last year and is due to make final (probably rising) low within bottoming pattern soon, the next low for that would be c. 2023. The 5 and a half year cycle in gold is also very material in this.: 2009, 2015, ...? Here is the thing the events that will drive these short term annual cycles are already in motion and sort of visible around us now. But the cycles do suggest certain times when crises should manifest, and those should also be the times when EW "chooses" from it's set of possible counts, thus excluding several of the candidates.
You know we are almost perfectly in sync with our take from Tom's analysis. The termination of wave B had me thinking I will sell hard(take profits, even physical ) into the next rally and get a defensive posture. If we are entering wave C or if it is corrective wave 4 then whichever count is correct the next move is down. Then either wave 1 or wave 5 will begin. But when will they begin will differ. The difference will be in length and depth of that correction, IMO. Thank you for your excellent post!
Thank you for your excellent post! You clearly point out the difference with how wave count can occur by drawing the macro picture of the forces out there. Very interesting and very deep. As a trader I am trying to trade on two fronts short and long. I use stocks for my short term and physical metal for my longer term. We are clearly going to be coming to a critical juncture in the not too distant future, 2017/18? "I am making a multi hour video" I would love to see that video!!! Aloha
Guys, this is embarrassing. In my impetuousness, I did not take time to look at the chart as an intro to the EWI video. He's actually agreeing on the move down from 2011 as a THREE and NOT a FIVE! I can only wonder what I was thinking? I must have pre-judged.
The symmetry on those long term charts I posted would seem to agree with these conclusions. This also means that I had mislabeled the various cycles from 1792, (for a few years now) but it would be rather tedious to get into those complex wave labeling details now.
And a deflationary collapse comes BEFORE any hyperinflationary economy. Having said that, it's hard to think gold is going to be in a bear market until 2023! Pete I think you're right and I also need to consider either selling or hedging along you and Silverwood. I'm beginning to think I need to come into the EWI camp. (Thank you Mark Twain)
BTW, is everyone and his dog going to get an opportunity to buy gold that 'cheap'? That too gives me much pause because the history of bull markets is that the crowd never gets an opportunity to get on board. Left behind: awaiting the correction that never comes.
Further thoughts and comments apprecited.
I like Ronnie and watch his weekly (free) analysis...
Tom, Daneric, Roasan, Ronnie and other highly skilled EW'ers has more or less the same view. So I am suspecting that ew scenario is not what's going to happen. I much more prefer argentus maximus view of things. He has a broader picture, a wider view of things.
That being said I enjoy the ew movies a great deal, they add bits and pieces to solve the market puzzle.
Scenario A and B, isn't it possible that scenario A is followed by scenario B in sequence? Yes I like the inflation scenario, inflation is very good for commodities in general and SILVER in particular. Maybe the deflation bust has already occured, look at oil? Then we have all the global debt to deal with, hmm this is a tough one.
Are we in a wave 4 correction? Looking at silver there is no harmonization between gold and silver. It's not possible for silver to be in a 4th wave correction. Why not a wave 1 and 2 instead?
This is much more fun, a greater potential for an epic up move, than a final 5th wave. To prove my point a little bit clearer I am looking at the broader picture, taking a wider view. The charts is not in us$ it's CAD.
I don't know if the Libor rate is important going forward, the Libor rate is in an up move right now, perhaps predicting a coming bank crisis? Back in 2008 the Libor rate had a great run when Lehman fell apart.
I am really looking forward to argentus maximus masterpiece coming soon. I recommend you to subscribe, he knows what he is talking about and he is far less enigmatic and cryptic in RNP. From the comments here I notice that some of you are not RnP'ers. The fractal from summer 2015 is clearly not pointing out a low for gold in 2023.
It was back in the 2008 they started QE1, maybe the Libor-rate is predicting a QE4 to be launched soon?
Solsson, that's the big problem with trying to practically apply EW prices to economic history. If you look back at that long term chart I posted, the price was stagnant from 1-01-1879 to 1-31-1934. Then from 1-31-1934 to 2-17-1968. Hence a case can be made that your "1" on the charts are actually a 3 of 5 or (and this is a bit of a stretch) 1 of 5. Seems like there are just too many alternatives for wave classification given the combinations of time and price throughout history not to mention government intervention.
There's a whole lot to digest in the weekend posts that I've only just come to late Sunday PM. But Argentus, I can reply to you a little. My chart numbers are simply pivot labels without regard for Ewaves. Certainly in RGLD it looks to be an abc correction unfolding where I have written 4 and 5 short. The pivots selected are just the larger pivots that are obvious on the weekly chart which is what is used in Andrews/Babson techs. It prefers to look at the obvious structures.
Implications from an Ewave perspective re closes below the P1 top are interesting. But maybe it can be re-labeled as below to eliminate the inconvenient overlapping that might occur. There's probably a way to properly count the internals of 1 or A but I'll leave that to the wave counters (I often see counts that I couldn't even imagine). I'd offer my count for the subwaves of w.1 but w.ii and w.iv don't alternate in form...
There's more to your comment that I can't think about right now. Must get to bed!
Part of the promotion from Gann Global was to get some updated posts from Tom. Here is his Sunday 10/16/16 update...
We have an inflection tomorrow and another (couple) next week.
There is a G-V 18th I am watching and the following G-V peak I am concerned with is centered on 24th but overlaps a few days after, and that coincides with end of month rollover market maker activities.
Keeping an eye on support at the moment, and which side of support SLV is at on following daily bars might be a good idea.
Been wracking my brains over the stock market indexes. Bottom line: This chart of SPY is probably the most reliable for judging just when the primary trendline is broken on a close. This event will most reliably signal a longer-term change in trend. Consider that R1 will be broken (not a prediction) and the area near 190 by end of December (near R2 x LH) is plausible. This would be commensurate with prior larger corrections (look at the weekly). We will see. This is big.
I have been looking at stocks lately too. A bit mind numbing. There are a few conclusions.
Since we look at the 8 Yr here (in gold) regularly, but stocks are being considered - here is the present moment in the S&P 500, monthly, together with the same moment of the five previous 8 year cycle waves experienced since 1976.
A time to be extra careful for sure.
Sometimes, this is a moment for a substantial accelleration, with exploding vix. But not always. Doom only arrived three out of five times.
Gold's had a nice run this morning, confirming a pivot low on October 7. The latest ml is about 1276 today and 1275 tomorrow. We'll see if it makes those values. I'm bearish short term because the last two daily mls are both sloping downward and typically there will be another attempt at a new low. Wouldn't mind at all if gold surges higher as I sure like the response in my miners. Meanwhile, the R1 line is rising. An ideal target for a major pivot low now presents itself to occur on November 3 (+/- 1 day). Chart to come after EOD data download.
A high-probability short play may present itself at/near the confluence of lines shown in tomorrow's trade. Top so far is at 162% exR of y-z swing of b wave (not drawn). RSI is confirming. The two last mls on the daily are downsloping; in this context there typically is a retest of the low pivot after a rally.
The potential here, if price declines to the daily R1 line, is ~$60 basis the Dec chart, and more, basis $gold.
Similar with longer term perspective - in weekly - gives the background for why this week (and next) has importance:
I think that the more recent medium term, in red, is jousting with the longer term, in blue, to see which is the real boss going forwards.