Since my last post on Gold a month ago, the price of gold has headed north. I was contemplating if I should cover my shorts and start to accumulate gold and gold miners' stocks. And I spent the last few days, over the Easter weekend, to relook at my charts. I came to my own conclusion that the corrective phase is still not yet over and I believe a zigzag pattern is going to take place, going south, in the days ahead.
Instead of labelling the corrective pattern as a double three Elliott wave pattern as in my last post, it will be more appropriate to label it as a triple three Elliott wave pattern. There are too many corrective waves in the original W pattern, in my last post, to be labelled as 'a' wave.
Secondly, as a triple three wave, one would expect that there will be alternations in W, Y and Z patterns as well as the X patterns. In this post, the W pattern is a double zigzag, the Y pattern is a expanded flat and lastly, for the Z pattern, it should be a single zigzag. For the X pattern, the first X is a zigzag. For the second X pattern, it is labelled as expanded flat pattern.
One can argue that the 'c' wave in the second X pattern is too large compared to the 'a' wave for this abc wave to be label as a expanded flat. The distance of 'c' wave is more than 2.618 times that of 'a' wave. But if one uses the start of 'a' wave as the base of 2.618 extension (instead of using the start of 'c' wave as the base) as depicted in the chart, the price of gold for the 'c' wave is within the 2.618 extension target. Wave 'c' is usually 1 to 1.618 times the size of wave 'a' for expanded flat, but it is possible it becomes as big as 2.168 times on rare occasions. And using the start of 'a' wave as the base widens the price target range.
My target price for gold remains unchanged at 1370 to 1440 as illustrated in my last post before heading north to new record high. That's it for now.
Instead of labelling the corrective pattern as a double three Elliott wave pattern as in my last post, it will be more appropriate to label it as a triple three Elliott wave pattern. There are too many corrective waves in the original W pattern, in my last post, to be labelled as 'a' wave.
Secondly, as a triple three wave, one would expect that there will be alternations in W, Y and Z patterns as well as the X patterns. In this post, the W pattern is a double zigzag, the Y pattern is a expanded flat and lastly, for the Z pattern, it should be a single zigzag. For the X pattern, the first X is a zigzag. For the second X pattern, it is labelled as expanded flat pattern.
One can argue that the 'c' wave in the second X pattern is too large compared to the 'a' wave for this abc wave to be label as a expanded flat. The distance of 'c' wave is more than 2.618 times that of 'a' wave. But if one uses the start of 'a' wave as the base of 2.618 extension (instead of using the start of 'c' wave as the base) as depicted in the chart, the price of gold for the 'c' wave is within the 2.618 extension target. Wave 'c' is usually 1 to 1.618 times the size of wave 'a' for expanded flat, but it is possible it becomes as big as 2.168 times on rare occasions. And using the start of 'a' wave as the base widens the price target range.
My target price for gold remains unchanged at 1370 to 1440 as illustrated in my last post before heading north to new record high. That's it for now.