| | | RB,
I am not using the Gold stocks ETF for timing this market. I prefer to follow gold and specific gold stocks. A few of them are buys here. But others can go significantly lower depending on what gold does. Most gold stocks have an extremely strong correlation with gold on the long term
Since the top in July, confirmed in August, it was a no brainer that we would see the gold 200 dma. Fibonacci retracements suggested the following targets:
1) $1252, the 38.2% retracement and the 200dma at the time which is where we bottomed more or less in early October.. This would have been the signs of very strong fundamentals.
2) $1212 the 50% retracement which is the preferred target for wave 2 down and find support at the June low as well as the March-June lateral support above $1208.
3) $1173 the 61.8% retracement which is within the $1160-$1180 topping range of October 2015.
4) $1045, a 100% retracement, when fundamentals are weak or neutral at best.
5) Below $1045...this is not a bull, but a bear market rally.
Scenario 2 has been my favorite and still is. Gold is reaching oversold levels now, which bodes well.
But as usual, we can never be sure of anything. We can only determine most probable scenarios. So I try to keep an open mind and be ready to anything.
At this point in time, most probable scenarios for 2017-2018 are, as far as I am concerned: a bear market in equities simultaneously to a bull market in gold, gold stocks and most commodities. |
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