Dr. Al Larson, PhD
MoneyTide.com
Since the gold ETF GLD was discussed in the November 30, 2018 Chaos Clinic, it has completed the forecast 7 moves in an Up Chaos Clamshell. This is shown on the chart above. In November, I expected the rally to last "into February."
The rally was steeper than I expected, due to move 5 becoming a 7 move Up Chaos Clamshell itself. This is shown by the red boxed numbers 1-7. This is a good example of the fact that move 5 in a Chaos Clamshell is often the largest and fastest and best to trade.
The moves 6 and 7 were quick, with move 7 being an obvious blow off. From there prices dropped sharply into March 6th.
So what now? The most likely pattern is a consolidation, before further advance. I think the approximately six month rally from August to February is move 1 of a much larger Chaos Clamshell. This is shown by the green boxed number 1.
One way to estimate the duration of this consolidation is to anticipate that it might look like the August through October 2018 move, outlined as a red triangle. This triangle has been copied to the end of the chart. It suggests GLD could congest until about April 4th.
If prices do this, it could be a golden opportunity to buy gold for further advance near the end of the triangle. Purchases can be protected with a stop at 120. The GLD Exchange Traded Fund is my preferred vehicle, since it can be traded by small accounts. .
To learn more about Chaos Clamshells, I suggest my Cash In On Chaos course, available at Moneytide.com
This content was published on Dr. Al Larson's Chaos Clinic which you can attend each Friday for free.
Dr. Al Larson has developed a complete Chaos Model of Markets, four unique courses that let you become a Certified Chaos Trader, some very unique eMylar fractal pattern overlays, and tools that permit forecasting individual stocks and markets years in advance. You can also sign up for a free weekly email, and attend a free Chaos Clinic on Fridays. To learn more, click on the author's profile.
Be sure to sign up for the free weekly email!
Information on this page contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these securities. You should do your own thorough research before making any investment decisions.
Recommended Content
Editors’ Picks
EUR/USD clings to gains above 1.0750 after US data
EUR/USD manages to hold in positive territory above 1.0750 despite retreating from the fresh multi-week high it set above 1.0800 earlier in the day. The US Dollar struggles to find demand following the weaker-than-expected NFP data.
GBP/USD declines below 1.2550 following NFP-inspired upsurge
GBP/USD struggles to preserve its bullish momentum and trades below 1.2550 in the American session. Earlier in the day, the disappointing April jobs report from the US triggered a USD selloff and allowed the pair to reach multi-week highs above 1.2600.
Gold struggles to hold above $2,300 despite falling US yields
Gold stays on the back foot below $2,300 in the American session on Friday. The benchmark 10-year US Treasury bond yield stays in negative territory below 4.6% after weak US data but the improving risk mood doesn't allow XAU/USD to gain traction.
Bitcoin Weekly Forecast: Should you buy BTC here? Premium
Bitcoin (BTC) price shows signs of a potential reversal but lacks confirmation, which has divided the investor community into two – those who are buying the dips and those who are expecting a further correction.
Week ahead – BoE and RBA decisions headline a calm week
Bank of England meets on Thursday, unlikely to signal rate cuts. Reserve Bank of Australia could maintain a higher-for-longer stance. Elsewhere, Bank of Japan releases summary of opinions.