| | | From an Elliott wave point of view, the most interesting gold related chart is $HUI. Look at the monthly chart. The index made a huge advance from the low in 2000 up to the great top in 2008. It crashed the same year. After that, it rallied to a new high in 2011. The decline that followed (going now to the weekly chart) - so far has been a three-waver, with the June low signifying the end of the wave 3 (or C).
IF we get a consolidation AND a drop to new lows, we will have a completed an Expanded Flat (ABC) correction from the 2008 top.
Now, we can stay with the weekly, or better let's go to the daily chart. The recent rally up to the September highs was a three-waver - AND so was the decline to the October low. This suggests that the evolving structure is corrective. The likely scenarios are that it may trace out either a Triangle, or a Flat. In the former case, the index will continue trading in a narrowing range. In the latter, it will rally very soon - but (according to EW view) the odds would be in favor of that being a bear market rally.
The interesting longer term implication is that if we get yet one more last big wave down to new lows (to complete the impulse since 2011) -- it would be a perfect setup for the resumption of the great Bull market, which started in 2000. |
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