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John:
> With the recent interest in the precious metals and the XAU, I thought I
would just point out a potential zone in which we expect the XAU to rally
towards.
I note with interest your message on the XAU. I thought I might share my opinion with the group. This is one of my favorite areas to trade in also and I've been
watching closely from a Elliott Wave perspective the action of this market. Next week marks a potentially important Spiral Calendar intersection as six
previous reversals of trend have Spiral Calendar intersections falling between the 20th and 24th. In addition, the 8.5 year gold cycle, which is the longest I have
found, will be halfway in time from the previous low on the 22nd. When a previous cycle low has been broken (in this case the low in September 1993)
oftentimes the cycle re-emerges at the 50% point. That is, a low during that week of significant trading value is highly likely.
If the market continues to rally hard into next week the SC point could also reflect just another rally top in a large bear market. A new low followed by a rally
would IMVHO be something worth following.
In a longer sense, I don't think that anything that happens in gold or gold related stocks here will be anything more than a rally in a Supercycle degree bear
market which began in 1980. It ought to be at least of Primary Wave degree which, from a percentage return POV suggests that it is worth following. At the
February, 1996 high a very strong argument that gold would eventually decline to $175 per ounce in this bear was confirmed. Since that number is well below
the average cost of gold production, most mining stocks could eventually be worthless. Just something to keep in the back of your mind....
RAF
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