It's long way down for S&P 500 index in real money, the index lost almost 90% of its value in terms of gold through out eleven years.
The long wave down is clearly impulsive, it says " there'll be an other wave down even more deeper than this ". I labelled this wave in red (( I )).
The second wave up that retrace the previous one is two years old, it seams impulsive, so I labelled it 1-2-3-4-5. In this case, there's much more upside for S&P 500 index to go, that the second wave in red (( II )) must be corrective, and should form a 5-3-5 corrective structure. So, in this case wave (( II )) in red may complete at Resistance #2 level at 2.75 ounce of gold, which retraces 43.54% of wave (( I )) in red.
But there's an other counting possibility, counting as a corrective pattern of three with labels A-B-a-b-C ( not shown on the chart ) in stead of 1-2-3-4-5. In this case, wave (( II )) is near completion at Resistance #1 line at 1.64 ounce of gold, which is also the extreme of wave 4 of (3), and retraces 21.16% of wave (( I )) in red. I don't know for sure if this over bought condition means completion of wave (( II )) in red or no!
There's an important point to notice, S&P 500 index is in over bought condition - see the circled area of the RSI indicator.
The second counting of wave (( II )) that's labelled A-B-a-b-C implies that S&P 500 index is due to start a new deep downtrend in terms of gold labelled wave (( III )). This is consistent with what some Elliottitions says that wave Five in gold prices is due to start, and what some people say that S&P 500 index is in over bought condition in terms of US dollars and due to correct down.
In contrast, the first counting of wave (( II )) which is labelled 1-2-3-4-5 implies that there is a small correction down for about a year or so, and then, the final leg up to Resistance #2 line. This means that the coming gold rally will be very weak.
The long wave down is clearly impulsive, it says " there'll be an other wave down even more deeper than this ". I labelled this wave in red (( I )).
The second wave up that retrace the previous one is two years old, it seams impulsive, so I labelled it 1-2-3-4-5. In this case, there's much more upside for S&P 500 index to go, that the second wave in red (( II )) must be corrective, and should form a 5-3-5 corrective structure. So, in this case wave (( II )) in red may complete at Resistance #2 level at 2.75 ounce of gold, which retraces 43.54% of wave (( I )) in red.
But there's an other counting possibility, counting as a corrective pattern of three with labels A-B-a-b-C ( not shown on the chart ) in stead of 1-2-3-4-5. In this case, wave (( II )) is near completion at Resistance #1 line at 1.64 ounce of gold, which is also the extreme of wave 4 of (3), and retraces 21.16% of wave (( I )) in red. I don't know for sure if this over bought condition means completion of wave (( II )) in red or no!
There's an important point to notice, S&P 500 index is in over bought condition - see the circled area of the RSI indicator.
The second counting of wave (( II )) that's labelled A-B-a-b-C implies that S&P 500 index is due to start a new deep downtrend in terms of gold labelled wave (( III )). This is consistent with what some Elliottitions says that wave Five in gold prices is due to start, and what some people say that S&P 500 index is in over bought condition in terms of US dollars and due to correct down.
In contrast, the first counting of wave (( II )) which is labelled 1-2-3-4-5 implies that there is a small correction down for about a year or so, and then, the final leg up to Resistance #2 line. This means that the coming gold rally will be very weak.