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Realtraders,
With the recent move in the precious metals market, I thought I would
show possible support and resistant levels for the XAU, Gold and Silver
markets. Note, the post is a little long but I think it is worth it.
First, the XAU - Attached is a weekly chart depicting the XAU since the
January 1996 high and its subsequent decline using symmetry wave method of
analysis. What I find very interesting is the large number symmetrical
wave structures that have occurred to our present time...Waves 1-12 (see
chart). Further, each of these RALLY waves that took place during this 1.5
year downtrend, has an almost EXACT match with the original Wave 1-2.
Specifically, during the week of 3/22/96 the original Wave 1 LOW was
formed at 135.41 and during the week of 4/12/96 the Wave 2 HIGH occurred at
151.56 (remember, we are measuring the rallies during a downtrend). This
rally measured 16.15 points +/-3.23 pts(20% rule) for a leeway zone of
12.92 - 19.38 points.
Now for the amazing accuracy of the subsequent symmetrical rallies: Wave
3-4 measures 16.77 points, Wave 5-6 measures 16.07, Wave 7-8 measures
16.98, Wave 9-10 measures 17.97 and Wave 11-12 measures 17.75 points. As
you can see, all of these rallies failed within a point and a half of the
original Wave 1-2 rally...This is what symmetry is all about!!!
Now, as you can see, this 1-12 Wave structure finally came to an end or
failure with the XAU rallying up to 111.33 level on 10/3/97. This failure
should have been expected due to the extended wave structure to had
occurred (see my explanation of SymWave analysis on the web for more of the
rules). Actually, I was surprised that the failure did not occur sooner!
Anyhow, now that we have broken this 16 point rally structure, it would
suggest that higher levels in the XAU are possible! At present, my
analysis suggests a move to the 121-124 level. However, the buy signal,
using symmetry wave has NOT been issued yet. That will occur when the XAU
declines into the level of 102.93 to 96.93. How was that calculated, you
may ask? Easy. On the 8/15/97 we had a high (Wave A) at 103.53 and during
the week of 9/19 we had a low of 91.53 (Wave B). This DECLINE measures
12.00 points +/- 2.40 pts (leeway). Since it appears that we have a Wave C
high which occurred during the week of 10/3/97 with a high at 111.33, we
would just subtract our leeway zone from the 111.33 level. Your stop loss
will be if the XAU declines below the 96.93 level. As I write this, the
XAU closed today, 10/9 at 105.54.
Final thoughts on the XAU. The almost two year decline in this index may
soon be over. At present, I can not tell for sure if we will break down
below the 85 level...I sure hope not. But if we did, I think we would then
possible make a run to the 60 level and a major double bottom but, as I
said, I don't think that will happen. On the positive side, this market
has formed a beautiful symmetrical relationship on the downside, all we can
hope for is that this beauty will also unfold as new buying opportunities
as this market rallies and then consolidates on rallies to the upside.
Finally, if you take a look at some of the long term indicators and
oscillators on this index, you will see that buy signals have now been
give. This can be seen by the MACD oscillator that I have included in the
chart.
SILVER - On a weekly chart, silver also broke out of a symmetrical
downtrend. Specifically, during the week of 12/1/95, silver had a LOW at
5.09 and on 2/2/96 silver rallied to a high of 5.89. This rally measures
80 cents +/- 16 cents. During the week of 1/17/97 silver again set a low
at 4.61 and had a subsequent rally to 5.39 on 3/7/97. This rally measures
78 cents... obviously a symmetrical match. Using symmetry wave analysis,
at that time, would have resulted in initiating a short position near the
5.40 level. Subsequently, silver fell to 4.15 during the week of
7/18/97.... nice move.
Anyhow, since the 7/18/97 low at 4.15, silver has rallied to a high of
5.33 and in the process has exceeded its maximum 96 cent original wave
leeway zone, thus causing a failure of this symmetrical downtrend in
silver. Hence, we may now be in the process of beginning a new uptrend.
Based on this form of analysis, I have included a 60 minute chart of
silver in which you should see where I expect December Silver to retrace
too before another rally is attempted.
On 8/28/97 Wave 1 high was formed at 4.86 and on 9/17 the Wave 2 low was
set at 457. This decline measures 29 cents +/- 6 cent or 23 to 35 cents
for the target zone. On 9/30/97 Dec Silver hit a high of 533, therefore,
we would expect the Wave 4 bottom to have an exact symmetrical match at the
5.04 (5.33 minus 29 = 5.04) level and our leeway target zone is 5.10 to
4.98. As I write this, Silver had a low today (10/9/97) of 5.085 and is
NOW in our target zone. Therefore an EARLY entry buy signal is issued.
However, I would not be surprised if silver declines to the 5.04 level.
Also note the Fibonacci retracement relationships at the 5.04 to 5.09
levels which add confluence to our forecasts.
Note, your stop loss on any new longs will occur on a move below the 4.98
level. However, for those who are more of the risk taker, I see other
support in the 4.86 to 4.95 level in Dec. Silver.
GOLD - December Gold also has an interesting setup. In the down trend
mode, you can see by the white line in the middle of the chart that the
ensuing rally should run into overhead symmetrical resistance around the
347.50 level. Also at this level, we have a 50% Fibonacci retracement
figure which should also act as resistance during this next rally.
However, on a more positive note for those who are bullish, our current
level of 328.50 still allows us the potential for a $20 move in this metal
or a 200% return based on the current margin requirements for the futures
contract.
Further, if you take a look at the attached 60 minute gold chart, you
will see that the current decline that began on 10/1/97, has a magnitude of
$13.70 (This decline is depicted by the dark blue line on the chart).
Specifically, the ORIGINAL Wave 1-2 decline began on 7/18/97 with a Wave 1
high at 334.30 and on 8/5 a Wave 2 low at 321.50. This decline measures
$12.80 +/-2.55 or a target decline of 10.25 to 15.35. As I said earlier,
our current decline which began on 10/1/97 has now measured 13.70 and IS
WITHIN our target zone. Therefore, based on symmetry, a BUY signal is now
issued in Dec. Gold. Your protective sell stop is placed just below the
325.35 level (340.70 minus 15.35 = 325.35).
Finally, as you can see by the chart, we also have a 62% Fibonacci
retracement zone and a possible Japanese candlestick 'hammer' formation
taking place at the current time. Possibly suggesting that the decline in
gold over the last few days is coming to an end.
Anyhow, that's my current analysis on the precious metals, I hope you
have enjoyed it...I enjoyed writing it.
Have a good day,
John Boggio
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For recent commentary and more informations regarding SymWave, please go to:
Commentary: http://www.realtraders.com/boggio/disc7_toc.htm
Info regarding SymWave: http://www.realtraders.com/boggio/boggiobio.htm
Thank you.From ???@??? Sun Oct 12 17:00:09 1997
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From: c355@xxxxxxxx (George M Burke)
To: RealTraders Discussion Group <realtraders@xxxxxxxxxxxxxx>
Subject: Re: STKS: buy at the bid, sell at the offer
References: <343BACD1.2389@xxxxxxxxxxxxxxxx>
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Status:
The reason that they can buy at the bid and sell at the offer is
generally because the order has been around for a while and because of
its size or market conditions, the order cannot be filled. But, because,
in the case of a sell order, the eventual buyer senses the market is
about to rally and he makes a bid for the block and purchaes it. The
oppoiste happens when a big buy order is around. Some trader or the
specialist or market maker finally makes a decision to fill the order,
makes an offer to the buyer for the block and shorts it.
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