No change in the view in gold, as trade from the Dec 3rd high at $1127.50 is seen as a correction (wave 4 in the rally from the April low at $865.00), and with eventual new highs above $1127.50 after (within wave 5, see numbering on daily chart below). In the Feb 9th email, said to rebuy on a close above the bearish trendline from Dec as it would increase the likelihood that the multi-month correction was “complete”. The market did indeed close above there on Tues (then at $1103.30, closed at $1119.80), and targets further gains toward $1225/30 and above ahead. Note too that the daily macd is in buy mode (also bullish divergence over the last month), adding weight to this bullish view. For now, would use a close below the bullish trendline from July (currently at $1053/55) as a sign to stop. Support before there is at the broken bearish trendline from Dec (currently at $1097/00), while resistance is seen at $1128/36 (recent high and the 50% retracement from $1227.50 just above).
Longer term, the market continues to chop since finally reaching (and temporarily breaking above) the long held target at the ceiling of the bullish channel that has been in place since 1999 in Dec. However, the nearer term upside pattern from April is not “complete” (see shorter term above), while the longer term upside pattern from the Oct 2008 low at $681.00 is also not “complete” (currently within wave III, see numbering on weekly chart below). Though this suggests at least another 6 month (and likely longer) of “net” gains ahead, the upside is likely to be an extended period of wide, upward ranging (large pullbacks followed by limited new highs), and versus any big picture, extended new highs. Clearly not the type of market to “chase” new highs for the longer term (or even the nearer term for that matter), versus waiting for good sized pullbacks to buy and then getting aggressive with trailing stops on new highs.
Longer term, the market continues to chop since finally reaching (and temporarily breaking above) the long held target at the ceiling of the bullish channel that has been in place since 1999 in Dec. However, the nearer term upside pattern from April is not “complete” (see shorter term above), while the longer term upside pattern from the Oct 2008 low at $681.00 is also not “complete” (currently within wave III, see numbering on weekly chart below). Though this suggests at least another 6 month (and likely longer) of “net” gains ahead, the upside is likely to be an extended period of wide, upward ranging (large pullbacks followed by limited new highs), and versus any big picture, extended new highs. Clearly not the type of market to “chase” new highs for the longer term (or even the nearer term for that matter), versus waiting for good sized pullbacks to buy and then getting aggressive with trailing stops on new highs.
