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What happened to gold on
29 February 2012? The precious metal dropped from $1792 to a low of $1686 in
one day!
How does this shape up
with our Elliott Wave expectations?
The answer is that the
market is tracking well in line with expectations. Before dealing with the
current move, it is an idea to go over what our expectations are. What we
know so far is that Intermediate Wave III started at $1523 and that we have a
target of $4,500 for the end of Wave III. We also know that Wave III will
consist of five regular waves which we will label 1 2 3 4 and 5. Regular
waves 2 and 4 will be the anticipated 13% downward corrections described in
my speech to the Sydney Gold Symposium. Link at: www.jsmineset.com/2011/11/14/keynote-speech-at-sydney-gold-symposium-14-15-november-2011-by-alf-field/
Regular wave 1 will
consist of 5 minor waves which we label (i) (ii)
(iii) (iv) and (v). Waves (ii) and (iv) will be downward corrective waves one
degree small than the regular waves. Thus they should be about half the
magnitude of the 13% of the regular sized declines, say about 6%.
Minor wave (i) should consist of five minuette
waves which we can label i ii iii iv and v. Again
the minuette waves ii and
iv will be downward corrective waves about half the size of the minor wave
corrections of 6%. Thus the minuette corrections
should be approximately 3%.
The following is the
analysis of minor wave (i) showing the five minute
waves:
The two corrective waves
are approximately 3% as expected. Waves i and iii
are equal at 9% while wave v is almost exactly 61.8% of waves i and iii. This wave count is as perfect as one could
wish for. Thus we can conclude that minor wave (i)
was completed at $1792.
As described above, minor
wave (ii) should be a correction of approximately 6%, but could range from 5%
to 8%. A decline of 6% from the $1792 peak gives a target of $1685. In after hours trading yesterday gold reached $1686.
The COMEX chart, however,
shows a low point of $1696.
It is possible that the
entire correction in minor wave (ii) occurred in one day. A rally followed by
a further decline to test the $1685 area is a more likely outcome. An 8%
decline would bring the $1650 area into play. If gold drops below this level
we will have to consider other possibilities.
Once the bottom of minor
wave (ii) is in place in a convincing fashion it will be possible to make
some more accurate longer term gold price forecasts.
Comments to: ajfield@attglobal.net
Disclosure and Disclaimer Statement: The author advises that he is not a disinterested
party in that he has personal investments gold and silver bullion, gold and
silver mining shares as well as in base metal and uranium mining companies.
The author's objective in writing this article is to interest potential
investors in this subject to the point where they are encouraged to conduct
their own further diligent research. Neither the information nor the opinions
expressed should be construed as a solicitation to buy or sell any stock,
currency or commodity. Investors are recommended to obtain the advice of a
qualified investment advisor before entering into any transactions. The
author has neither been paid nor received any other inducement to write this
article.
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