GOLD
Fibonacci, Elliott waves still point to gold price disaster - of course Fibonacci and Elliott is all nonsense, so make what you will of this.
>>Fibonacci, Elliott Waves Still Point to Gold Price Disaster
Story Filed: Tuesday, March 05, 2002 12:25 PM EST
Johannesburg, Mar 04, 2002 (Moneyweb/All Africa Global Media via COMTEX) -- In my Gold analysis, dated 14 January 2002, I rated a close above $300 unlikely. This was also the level at which the preferred counts were negated.
Corrections are the most difficult to count as they are volatile and emotional. How did the price action over the subsequent 7 weeks alter future price projections?
Many technical analysts are calling for the latest Gold rally to continue to $330 to $340 range. Words like catapults are being used! Is this a catapult or a mere correction? Is this indeed the preferred levels that it will reach?
More importantly, what will happen afterwards, if it indeed occurs? Will it stay on these levels, surge further or pull back to new lows? This analysis report will strive to answer these questions.
FIBONACCI ANALYSIS
Chart 1: $Gold Weekly (Fibonacci) This is an updated Fibonacci chart of the $Gold Weekly since the January report. Gold rallied only to be stopped on the 23.6% Fibonacci grid. This will act as our first level of resistance identified that needs to be overcome for the rally to continue.
ELLIOTT WAVE ANALYSIS
Chart 2: $Gold Monthly (Elliott)
Preferred Analysis The total move from $255 in 2001 to current levels is not impulsive. There are huge and choppy price overlaps. This is a clear indication that this entire move is a counter trend move and should be counted as a correction, opposing the obvious downward trend.
The current price action has already achieved minimum requirements to be counted as a completed intermediate wave (2). A few hints indicate that the upward correction could have a little further to go before counted as complete.
Significant resistance lies between $308 and $311. These levels are the 78.6% retracement from $326 and the 23.6% since $416 as indicated in Chart 2. The $308 level is reached were minor wave "C" equals minor wave "A", a common relationship in a zigzag correction.
Once completed, the stage will be set for some significant downward momentum.
This will carry prices towards new short-term lows at support levels of $237 before plunging towards the final lows below $200. This shall be confirmed with bullion closing below $273 and shall be negated with bullion closing above $311.
Alternative Analysis Within the bearish context, bullion can indeed rally towards $330 to $340.
This shall activate the alternative counts as indicated in Chart 2. It will not alter the final lows as discussed above. This count becomes preferred with a close above $311. If this does occur, the upward correction will be brief and forceful.
by Joe Meyer
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