I just posted a chart illustrating the persistent increase in $XAUUSD strength relative to $XAGUSD (See original chart and analysis here: , as well as subsequent comments here: ).
$XAUUSD vs. $XAGUSD:
This strengthening of Gold relative to Silver might appear counter-intuitive, considering that the yellow metal has been under pressure recently, yielding to this analysis, where it is expected to continue a downward course on a pure technical basis - See analysis and forecasting here: .
$XAUUSD ON ITS OWN:
Looking at $XAUUSD alone, the technical landscape calls for a high-probability rally at the H4 scale. While this is a new chart without any prior target, I won't take credit for defining the current (YELLOW) level as a high-probability target, since it already occurred. However, I can say with some confidence that any protracted downward pressure will require a relief rallying to levels capped by the Fibonacci values depicted in the chart, with green, yellow and red representing a decreasing range of probability that price would attain these values. So, expect a higher probability of reversal to 19.754 (representing a minor Fibonacci value (1.000 - 0.786 = 0.214).
The other two values (20.308 at 38.2% and 20.653 at 61.8% retracements are self-explanatory, being significant Fib levels, widely accepted across financial markets).
The dominant pattern at this point remains arguable. A comes to sight, as well as a potential . However, their respective Point-B lacks the depth at 20.653.
Conversely, a could win our consideration here, on the basis of the X-A-B conditions met at the apex of the pattern (i.e.: AB < 1.618), while a Zero-X 1.131 extension would fit the predictive model that defined TG-Lo = 18.435 today.
As just defined, model just define an extremely LOW probability of reaching TG-Lo = 18.435 , but if it did so, this level would act as a strong reversal springboard. A colored arrow of fading quality is used to reflect the fading probability of this scenario.
OVERALL: An abysmal target would support prior analysis of $XAUUSD vs. $XAGUSD rising. While price consolidates at current implied target, I will leave the directional indicator as "Neutral" until a direction pronounces itself.
Predictive Analysis & Forecasting
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$XAGUSD hit target @ 19.754; Opens to higher Fibonacci levels:
via @tradingview | $XAG $SLV $XAU $GLD $USD #forex
As per forecast (blue arrow), bulls regained grazing territories to loftier levels. This opens the pasture to higher Fib-defined grounds.
I have not applied any particular wave count here, as it seems that the recent interest in the alternate wave counts has kept me busy and away from other charts. I will return to this chart with clearly count in the days day or so.
* * * Please, note that the 0.382 level was erroneously defined at the 0.500 position - The chart reflects this correction * * *
Price has surged from defined support (YELLOW level) and retraced in a manner reminiscent of an Elliott Wave first motion. If price rally, the higher low would correspond to a Wave-2 completion and price would thus march steadily toward one of above Fib-correlated structural levels.
I have just finished writing an explanation of the methodology I use in my trading. Sort of a game theory application in which I define the application of Fibonacci projections for risk management to my trading. Very simple and approachable.
Here is the link:
Hope this shed more light on how I do things - Caveat here is that what I am revealing leaves out details of the predictive/forecasting mode. However, you will see how irrelevant it becomes once you concentrate on the geometric information revealed to your mind's eyes, using the Hennessy system as an overlay.
Hope you enjoy it. Feel free to contact me with any question, or share if you find the information valuable - Credit given to the author is courteous and always appreciated.
EXAMPLE OF DAVID ALCINDOR'S HYBRID USE OF BASIC GEOMETRY, HENNESSY COUNT AND FIBONACCI LEVELS:
Let me know if I need to clarify. Feel free to pass along if you like it. Here too, credit to author is the cool thing to do - Much appreciated.
From Twitter (yesterday):
$XAGUSD holding as per forecast; Shallow reversal remains probable:
via @tradingview | $XAG $SLV $XAU $GLD $USD
UPDATED IMAGE - 25 AUG 2014:
Silver (i.e.: $XAUUSD) remains concentrated at the first would-be forecast (YELLOW) level. As indicated by the arrows, a geometric reactive retracement could open (i.e.: upon completion of a diagonal triangle completion occurring at the end from 19 AUG to now), thus sending price to the prescribed levels (in dollar correlations to Fib).
However, on a least probable basis, a protracted consolidation could push price to abysmal levels (in RED) - A much less probable proposition for now.