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DanV

GOLD - SHORT TERM BEARISH

Short
GDH4 (FORTS:GOLD1!)  
DanV top 28 months ago
7
2051
For some time I have been sharing this or similar chart of GOLD with many individuals and pointing out that the recent sharp move up in Gold is not a new Uptrend but rather continuation of correction or congestion following the All Time High.

See my earlier chart from Mid November 2012 http://www.screencast.com/t/BYY2pjNxv

Main Reasons for this is (1) we have a triangle at the base of the rally. Triangle normally only appear in Wave 4 or Wave C. as this is at the base it can only be Wave b. Both suggest that on the breakout it would be the last move in that direction. Therefore in this case the breakout to the upside could only be minor wave c that recently topped and we have been declining since. That continuation of weakness could retest the summer low in the region of 1500 round number. (2) in a large correction such as this one, we should have Momentum divergence between what might be Wave A and Wave C We do not have such divergence in the RSI hence we expect another lower low which could potentially produce such divergence. Consequently the current weakness could fulfill that requirement. If so, then we would have a new low in this congestion since all time high & it would complete Wave 4 on larger degree, setting the base from which new uptrend (Wave 5) could take place.
Therefore, any reasonable retracement on smaller time frame should be opportunity to short Gold.
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Przemek24 agreed with this chart, 2013-01-13 09:02:49.017607
DanV top 2013-01-13 09:25:34.257668
Hi, thanks for taking the time to view my chart & agreeing with the analysis. Hope it helps you to clarify your analysis. Last week as the Dollar weakened across the board, Gold did not manage to make real headway, hence I think it show that it could be relatively weak and may continue to weaken on any Dollar retracement. But potential buying opportunity might appear near 1500 level. Will review it later. In the meantime select to follow me if you like to be notified of any new charts I publish in the future.
baffolobill agreed with this chart, 2013-01-13 18:19:30.708380
DanV top 2013-01-19 06:45:44.042740
Hi, thank for taking the time to view my chart & agreeing with the analysis. I appreciate it. Seasonally Gold put a bottom in July/August. It might line up with The low I am expecting. Keep a look out for any new comments or updated chart. Select to follow me if you are not. Thanks again.
nicosxm 2013-01-19 06:25:48.620693
Price of Gold as been following your forecast so far, nice work, congrats.
DanV top 2013-01-19 06:49:31.937852
Hi, Thank you for taking the time to view my analysis. Appreciate you comments. This is specially gratifying when many in investment world were busy talking 2000+ in new bull move from low last year. I think the real move will take place later this year. Seasonally July/Aug is when important low is formed. So this year that might be the time for significant low to be formed and New Bullish Move to retest last years' high and may be new high to take place. Keep checking for further updated or new updated chart by selecting to follow me. Thanks
DanV top 2013-01-27 16:03:44.840201
Since publishing the chart, the Gold price has formed a minor bear flag and could be good short opportunity with clearly defined stop above the recent high around 1710 or similar on slightly tighter level using Intraday chart. But expect the price action to show weakness going forward.
nicosxm 2013-01-27 16:10:53.879751
Agreed looking at 1640 near term Target and below
JR mod 2013-01-30 08:29:41.563880
Do you have an updated version? Would be helpful in timing the bottom
DanV top 2013-01-30 08:54:39.077276
snapshot


Hi, Thanks for asking for the update on Gold chart. Today's relative sharp move (whilst not dismissing it) could still be an abc correction which upon completion is likely to continue downwards as described when chart was published. I have as yet no reason to feel that the major bottom is in from where Gold could rally to retest the historic high. Just glancing at previous section of this bear phase one could note several occasions where price looked as though it is in new Bull run but so far has not succeeded. I think it is normal for these sorts of movement but do not change overall picture. Also, recently Dollar Index has been in tight triangle and whilst EUR, Oil & Equities made upside progress, Gold failed to take advantage. So, I ask is this indicating something is wrong with Gold. I am no authority on this but we have often heard that Gold is a hedge against inflation. If this is the case then lack of Gold showing positive price action could be indicating that the future inflation expectation is not what most of us appear to think. Also seasonality suggest that important bottoms for Gold has been in late July - Early Sept time window. So until more price data is available suggesting otherwise, I am still holding to my view originally published. Hope this helps
JR mod 2013-01-30 09:00:41.683776
..."If this is the case then lack of Gold showing positive price action could be indicating that the future inflation expectation is not what most of us appear to think"

It's a long lag that no one takes into account usually lasting 12-18 months from monetary easing US/GB/ECB/BOJ/China ... list goes on. As far as gold, we have only priced in QE1 and all those other central bankers that decided to go along with the cranking up the printing press around that period.
DanV top 2013-01-30 09:04:30.166089
Yes agreed. But all those factors should have been Gold positive. So why such weakness. Do the "Smart Money" who wish to really load up Gold at lower prices know something you & I don't? I some how really wonder what the problem is for Gold in the face of all positives. I don't understand fundamental dynamics beyond that.
JR mod 2013-01-30 09:10:16.133617
You must measure "gold positive" different than me. The bullish trend is still intact as far as I can see. This is normal consolidation after a big run. Smart money has yet to get in, and that's good. Smart contrarians are smarter than the "smart money" herd. Palladium, Platinum, Silver and later Gold. Two are already started the latter two will start very soon.
DanV top 2013-01-30 09:13:18.770386
Agreed. May be Gold will wake up soon. But when exactly. Not sure is there is way of timing that in advance. But will keep a look out. Further price action will give clues. Thanks for your comment.
JR mod 2013-01-30 09:05:25.068641
Thanks for the update. Not much changed.

As far as chart.. for now the target 1500-1550 is a bit deep for me to believe. Also time frame, a bit far dated. We are almost 18 months removed from the Gold peak Aug/Sep 2011. Average consolidation period for metals is 17 to 21 months. Silver is 21 months from it's peak April/May 2011.
mastermindbalraj agreed with this chart, 2013-01-30 08:56:07.302995
DanV top 2013-01-30 10:24:59.142022
Hi, thanks for taking the time to view my charts & agree with the analysis.
nicosxm 2013-01-30 10:10:43.910293
If one loads up the candles (for updated chart) on the main chart of this discussion one will obviously see that DanV is right on target.... one question however, this is Spot Gold correct as recent price do not compute with the Futures Contracts..
DanV top 2013-01-30 10:18:08.613453
Hi, thanks for that kind word. You are correct that the Spot Gold and the price for real bullion could be different on the street. Also whether you are retail purchaser or Major Dealer. But if it helps here is the a chart of Major Gold Miner "Barrick Giold" which seems to suggest that the Spot Gold price in the chart above appear to have similar downside possibility. Whilst nothing is guaranteed there is at least a food for thought for consideration about the right time for going long on the Gold. Hope this
snapshot
nicosxm 2013-02-21 13:34:50.158366
Good Day Dan V , Where you expecting Gold to collapse so fast...????.... what is your sentiment at this point...???.....thanks, best, Nico
DanV top 2013-02-21 14:46:19.647192
Hi, thanks for your question. I am surprise but the recent sell off in Gold. I did not expect such a momentum. I have made few minor changes to the original chart with additional price data since publishing the chart at the outset. In the current decline from Oct 2012 high @ $1800 area we appear to have 2 Zigzag above the Long term up trendline. Upon break of the we have small decline (wave a) and small triangle ( wave b). Since then we have impulsive 5 wave down and are in minor wave (iii) in progress. Therefore I expect s a small bounce for wave iv and another decline to complete wave v and wave c overall, which could bring us to 1500 area. That could form possible bottom. However, if we are to match double zigzag above the Major up trendline above double zigzag below that trendline, then the drop from Mid Jan from 1700 level, we could have 1st abc zigzag, then I would imagine an abc retracement and another zigzag lower. That shown in GOLD could allow price to mark time to possible form Low in June or seasonally common in late July with price probing below 1500. So in summary, upon completion of wave c with internal 5 minor waves bottoming around 1500, I would look for an abc ZigZag bounce towards 1630 -1650 area and another abc ZigZag drop to the level 1480- 1500 or even 1400 if the AB=CD symmetry (shown on the chart) is to plays out. I have no qualification to justify such weakness in GOLD price. However would guess that if like most suggest Gold is an Inflation Hedge and store of value against paper "Fiat" Money, then the feared inflation might not be as serious a threat as many might have envisaged or that the "Smart Money" might be able to make better return from other assets compared with Gold. They will likely return at some stage, just don't think it will be in the next few months and will do so when GOLD is on sale after capitulation at lower level. Anyway, here is the snapshot of updated charts with these details.
snapshot
nicosxm 2013-02-21 16:11:03.545296
Thanks for your reply and chart snapshot update. as always nice work I can rely to with the same outlook.
m4riovolp3 agreed with this chart, 2013-02-21 18:43:40.699944
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DanV top 2013-04-14 14:39:12.514722
3 months ago we had identified minimum target to 1500 area, which has been met with convincing price action. So now a possible small retracement could be expected but the trend still is to the downside and also pointed out that AB=CD price symmetry in PINK suggests that we could be looking for secondary price target in due course to 1400 for the final low as shown in original chart and again in the updated chart here
snapshot
DanV top 2013-04-14 14:44:48.487040
Based on Time symmetry using GLD possible low could be mid June or later in July
snapshot
m4riovolp3 2013-04-15 07:01:20.296013
Dan, do u expect a recovery to 157$ / 160$ in SPDR GLD Trust? Resp. in Gold to 1600/1650?
vitael 2013-04-22 14:41:21.832100
Dan quit from GOLD, better to close this chart
DanV top 2013-05-26 10:20:15.198227
This chart has played out well for the downside target of 1500 and then updated chart suggesting 1400 which was AB=CD measured move. Since then I think I will need to updated and re-publish Gold chart. Many could not contemplate the price of Gold falling 1400 at the time and it has not yet bottomed. Look out for updated chart to follow
jmtbernardo 2013-07-02 20:16:27.948733
Very good and interesting. Where did you learn to count the waves ? Do you have websites where I can read more about it ?