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
US Presidential Election Year Stock Market Seasonal Trend - 29th Nov 24
Who controls the past controls the future: who controls the present controls the past - 29th Nov 24
Gold After Trump Wins - 29th Nov 24
The AI Stocks, Housing, Inflation and Bitcoin Crypto Mega-trends - 27th Nov 24
Gold Price Ahead of the Thanksgiving Weekend - 27th Nov 24
Bitcoin Gravy Train Trend Forecast to June 2025 - 24th Nov 24
Stocks, Bitcoin and Crypto Markets Breaking Bad on Donald Trump Pump - 21st Nov 24
Gold Price To Re-Test $2,700 - 21st Nov 24
Stock Market Sentiment Speaks: This Is My Strong Warning To You - 21st Nov 24
Financial Crisis 2025 - This is Going to Shock People! - 21st Nov 24
Dubai Deluge - AI Tech Stocks Earnings Correction Opportunities - 18th Nov 24
Why President Trump Has NO Real Power - Deep State Military Industrial Complex - 8th Nov 24
Social Grant Increases and Serge Belamant Amid South Africa's New Political Landscape - 8th Nov 24
Is Forex Worth It? - 8th Nov 24
Nvidia Numero Uno in Count Down to President Donald Pump Election Victory - 5th Nov 24
Trump or Harris - Who Wins US Presidential Election 2024 Forecast Prediction - 5th Nov 24
Stock Market Brief in Count Down to US Election Result 2024 - 3rd Nov 24
Gold Stocks’ Winter Rally 2024 - 3rd Nov 24
Why Countdown to U.S. Recession is Underway - 3rd Nov 24
Stock Market Trend Forecast to Jan 2025 - 2nd Nov 24
President Donald PUMP Forecast to Win US Presidential Election 2024 - 1st Nov 24
At These Levels, Buying Silver Is Like Getting It At $5 In 2003 - 28th Oct 24
Nvidia Numero Uno Selling Shovels in the AI Gold Rush - 28th Oct 24
The Future of Online Casinos - 28th Oct 24
Panic in the Air As Stock Market Correction Delivers Deep Opps in AI Tech Stocks - 27th Oct 24
Stocks, Bitcoin, Crypto's Counting Down to President Donald Pump! - 27th Oct 24
UK Budget 2024 - What to do Before 30th Oct - Pensions and ISA's - 27th Oct 24
7 Days of Crypto Opportunities Starts NOW - 27th Oct 24
The Power Law in Venture Capital: How Visionary Investors Like Yuri Milner Have Shaped the Future - 27th Oct 24
This Points To Significantly Higher Silver Prices - 27th Oct 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Gold Price Can Still See a Lower Low

Commodities / Gold and Silver 2018 Sep 27, 2018 - 10:52 AM GMT

By: Avi_Gilburt

Commodities

The Fed controls the gold market. The manipulators control the gold market. The “swaps” control the gold market. The hedge funds control the market. Yes, I have heard about how everyone is controlling the gold market.

In fact, I even hear such ridiculous statements as, "The banks are pushing us down so that they can buy at lower prices." The problem with this is that the banks have been long for weeks - yet they are still pushing us down?


There is so much misinformation about the gold market, it is truly astounding. A new investor into this complex is probably reeling from all the garbage that is being presented to them about how this market works.

But, I have news for you. This market works just as all other markets work. Once you can calculate appropriate support and resistance points, and understand market structure to identify which one is going to be targeted next, that is all you need to know to understand how to trade the market.

If you want to read a more detailed discussion about these perspectives, I wrote a chapter on manipulation for Gold-Eagle’s e-book on metals entitled “Was The Metals Market Manipulated To Drop From 2011 To 2015?”

While I came into 2018 with a bullish pattern, which would have led to the breakout I was awaiting in order to signal the commencement of a strong 3rd-wave rally (Elliott Wave parlance), the market broke support for that setup, which then caused me to look to lower targets to resurrect the setup.

So, when we broke the $117.40 support on SPDR Gold Shares (NYSEARCA:GLD), we had to look towards our next downside target in the $105-$109 region to complete a protracted 2nd-wave pullback. Thus far, the market has struck the top of that target region (in overnight action), and has rallied. While the initial rally off the low can count as an impulsive structure, it did not meet the standards we often see in impulsive structures. The fact that it came short of our standards for impulsive structures certainly makes me question whether we have actually struck a bottom in gold.

Yet, we still have a pattern that can count as an initial 5 waves off the recent lows. But, it is the wave degree higher that will either confirm or invalidate whether a bottom has been struck in the market. My suspicion, based upon the lack of a standard pattern off the low, is that we are stuck within a corrective rally, which will lead to a lower low once completed. And, based upon the current structure, we have resistance overhead between $116.25 and $118, which will likely turn us down deeper into our target box below. But, based upon the current structure, it does look as though resistance will be tested within the next week or two.

It would take a larger-degree impulsive structure through our resistance to suggest that the market has bottomed, despite the lack of strong signals that the bottom has been struck. But, please remember to take a broader perspective of this chart. It is likely that once a bottom in this region is confirmed over the next several months, you will not likely see these prices again in your lifetime.

Regarding the common perception that we remain in a bear market in gold, with levels below $1,000 to come, I simply do not agree – especially as long as we hold our support box (holding above $104 on the GLD). In fact, this type of sentiment is exactly what we need to see when we are bottoming in a larger degree wave ii, as I suspect we are.

I want to remind you what Frost & Prechter have noted about 2nd waves in The Elliott Wave Principle:

“Second waves often retrace so much of wave one that most of the profits gained up to that time are eroded away by the time it ends. . . At this point, investors are thoroughly convinced that the bear market is back to stay.”

Is this not the environment within which we seemed to be mired at this time?

View chart illustrating wave counts on the GLD.

Avi Gilburt is a widely followed Elliott Wave technical analyst and author of ElliottWaveTrader.net (www.elliottwavetrader.net), a live Trading Room featuring his intraday market analysis (including emini S&P 500, metals, oil, USD & VXX), interactive member-analyst forum, and detailed library of Elliott Wave education.

© 2018 Copyright Avi Gilburt - 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