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Realtraders, With the recent discussion on gold, I thought I would give a symmetrical interpretation of this market. Attached is a daily chart of the XAU since Feb. '96. Simply, take a look at the rallies this index was able to generate during this prolonged downtrend starting with the November '96 rally. This rally measures 16.07 points +/- 3.2 pts (20% rule), we will call this Wave 1-2. Wave 3-4 (Feb '97) measures 16.97 points and symmetrically MATCHES the original Wave 1-2. The next Wave 4-5 (May '97) measures 17.87 points and still matches the original wave. Now for the current time frame. The Wave 6 bottom occurred on July 7th at 85.79. If we know that past rallies equaled approximately 16 points, we should expect a potential rally from 85.79 + 16.07 = 101.86, +/- 3.2 points. Thus I would expect a rally into this zone before we may again see some selling into this market.
On the positive side, you will see that we have an EXTENDED wave structure and as such failure is POSSIBLE. In this case, a failure would allow this index to continue to rally higher than the 16.07+3.2 or 19.27 pt projected gain. However, I do not see rallies higher than 110-120 on the XAU at this time.
Hope this helps, John Boggio
At 12:27 AM 7/28/97 +0200, Stig Olausson wrote: > > >> Interesting point Ron, >> >> If you look at the XAU index(which usually preceedes Gold) >> you will find a potential inverted Head&Shoulder forming. >> Break out point 97,63. Close Fri 95.15 >> >> BUT if you look att On Balance Volume for XAU we have a completed >> Inverted H&S (July 8-July25), which indicates that the XAU H&S >> WILL break. >> Further imlying such a move is the positive divegence between >> OBV and Price in XAU >> >> If XAU does break, the potential is 110.40 >> >> Supporting such a move is also the position of Dec Gold which looks >> to be in an impuls move. A five wave rise with wave 3 =1.382*wave 1. >> A break above 334.3 confirm such an impulse move. >> >> Thus we have two points to watch: 334.3 in Dec Gold >> and >> 95.15 in the XAU. >> >> IF the potential 110.4 above is achieved it it has further implications, >> and in my opinion could be the start of severe correction to the down >> move from Feb 96. Since it will break a falling wedge upside >> with a potential of 122. >> >> Further supporting the case, is the statistical fact that of ALLl the >> tops/bottoms made in a 12% swingchart since 1984 July has had >> most trend chages of all months. >> >> Not to forget that the bottom we are now looking at was one >> trading day away from July 4 = Earth aphellion which also >> often conincides with important trendchanges. This year even >> more important since we also have a New Moon and >> Venus in Oosition to Uranus (which according to Ray >> Merriman's book "The Gold Book" (1976-1982)have a 87.5% >> chance of being a bottom. >> >> Not to forget that July 5 (according to Supertrader's Almanac) >> was aniversary to important T/C in 1980 and 1989. >> >> So whatever Intel55@xxxxxxx is trying to communicate, >> I wouldn't be surprised if we have an important upmove soon. >> >> Provided 334.3 Dec gold and/or 95.15 XAU breaks of course. >> >> regards >> stig >> >> >> >> ---------- >> > Fra: R.Griess >> > Til: RealTraders Discussion Group >> > Emne: Re: Commodities-Gold >> > Dato: Saturday, July 26, 1997 3:07 PM >> > >> > The CFTC web page: http://www.cftc.gov has all the data on the >> committment >> > of traders for all futures contracts back to 1986. >> > >> > The recent discussion on gold caused me to dig out the numbers to see >if >> > there was anything in them that could suggest the longer term trend of >>> the >> > price of gold. >> > >> > I would suggest that looking at the net position (longs minus shorts) >of >>> the >> > non-commercials seems to overlay on the price of gold very nicely, >> > especially at the extremes. The current net short of the >non-commercials >> >is >> > at a record high (1986-97) as of the latest reporting period (July 15). >> > Those trading gold may want to watch for a reversal in this figure as >an >> > indicator that the trend of the price of gold is ready to reverse >>> direction. >> > >> > >> > Ron > >
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