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I got this comment below from a friend. Perhaps other people read my post the same way.
Also I did some other discoveries since my first study, resulting in a very clean chart, whic perhaps in it's simplicity explains the situation.
I am including it.
Stig
---I don't find your interpretation of the 78% level to match my observation. I find that if this level doesn't hold, then the previous lows will usually be broken, despite any interim short term bounces along the way, a
I agree with you, absolutely, but my empasis is on FAILURE.
I have found that failures are very important, and when they do occur, they usually produce violent swings in the other direction, and thus very profitable in a short time.
The problem is to identify them (because the movement can also be a prologue of things to come....). But looking at the break in this case, it was very lethargic, not indicating a sharp move down, even if you could expect one (sharp move down), if the bottom below the break is broken.
BUT look what happens if we use closing figures instead for the retracement level. (Connie Brown warns you about using high and low. Why should the last poor bastart who payed too high a price, be an indicator for the whole (gold) trading population, is her argument. Look it up, it's in the book. It's one of the things I learned from it ).
Using closing price, gold now stopped 2 cents ABOVE the 78,6 level AND at the lower trend line of the falling wedge.
Taken together with other info, in my opinion, that's powerful stuff.
But on the other hand, using this view, we did NOT have a failure, so the bounce may just be a bounce....
If it were not for the Elliot wave count. Which could be interpreted as we are now in wave 5 of of the ABC correction in wave (4).
and we have a fairly long way to go up to the op of wave (3). (339!)
Furthermore, at May 18 wave C is exactly 1,618 of wave A in TIME.
At first glance it does not look like it, but Feb 7 is not the Closing high - Feb 10 is. And if we aply the fib time count form that point, the pattern fits perfectly.
So we have had a low at an important conjunction of time and price. Which in a perfect world would give TREND CHANGE!!!
Stig
Stig
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