Gold preparing to return to 1800 (Elliott Wave Analysis)

FX:XAUUSD   Gold Spot / U.S. Dollar

This correction on XAUUSD has played out exactly as expected so far and it appears that we have just completed a terminal wave-c, meaning that we are also at the end of a larger irregular failure flat pattern. The irregular failure flat implies that we should get an impulsive wave that is at least 1.618 of the first :5, and could be much longer. I am expecting 2.618 which means XAUUSD would return to about 1800 within the next few months. The terminal and flat aren't fully confirmed yet and this count is still pretty speculative, however, there is also a Gartley with very nice ratios and bullish momentum divergences that are signaling a bottom here, coupled with bullish divergent bars and a strong retracement off the bottom I think that there is a very good chance that we are at or very near the bottom.

The stock market is also looking extremely toppish, which would be perfect timing for XAUUSD to start going back up because they generally move in opposites and the end of wave-3 (and most of the bullish momentum) was around the same time that the stock market bottomed out in February.

This trade has a very tight stop loss and the risk to reward here is absolutely terrific. If the stop does get triggered, however, it does not necessarily invalidate the count unless it ends up moving completely outside of the parameters of the terminal impulse. Until we break the 2-4 trendline on the terminal and the 0-B trendline on the flat (within the required time limits) the count is still unconfirmed, however it's definitely possible that this is the end based on the lower time frame count and on the other considerations.

Comment: The comment I posted earlier actually ended up being the bottom

The strength and power of this retracement so far definitely appears to be an indication that this is beginning to resolve this terminal impulse. It managed to stretch to the very limits of the terminal impulse but it is still a valid count and if this retracement continues with the strength that it has it will be confirmed shortly.

The 2-4 trendline has been breached very quickly. This doesn't really matter that much for a terminal impulse, though, because it has to retrace the entire terminal in less than 50% of the time covered by the terminal. So as long as we breach 1300 before June 20th we should be cleared for going to at least 1776 within the next couple months.
Comment: I should add that this pattern is no longer an irregular failure flat and is just an irregular flat now that wave-c has exceeded the beginning of wave-b. This creates an uncommon and contradictory market condition with slightly less counter-trend power than an Irregular failure flat. This doesn't mean that it can't go to 1776 like I just said but it doesn't necessarily have to like if it was an irregular failure flat. The minimum for an Irregular flat is just that it has to be longer than the previous impulse of the same degree, so it could potentially stop just above 1425.

Looks like XAUUSD has completed stage 2 confirmation of the Terminal Impulse. This means that it is very likely that my count is right and that we are about to get a very big leg up from here.
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do you think the count is still correct, now that gold has pulled back to 1200?
+1 Reply
Intuit KenzoMorsa
It could still be as long as it doesn't cross the 1.618 line. If that happens then wave-5 is too big to form a proper terminal impulse and the count should be invalidated.

+1 Reply
@Intuit, I would be very interested in your update on your EW analysis on gold.I have been a gold bug for a while and Harry Dent's prediction toward lower gold, higher dollar, lower bond prices are coming to fruition...If so that would be scary to see -1000 gold. I would love to know if your perspective on gold has changed.
I really appreciate if you find the time to answer.

P.S. because of our previous exchange, i bought DRV, sitting on 35% gains still holding though!
Intuit KenzoMorsa
@KenzoMorsa, I ended up dumping most of my positions after the election including gold minus select mining stocks. I think that we could see the DOW rise to around 30000 by 2019, however, I think at the same time we could see massive foreign stock market and currency collapses in Europe, Japan, and China. Gold will likely act as a safe haven for many of these investors but right now I'm invested in select mining stocks rather than actual gold bullion because gold itself was looking short-term bearish and many of these companies are still severely undervalued.

Also very nice gains on DRV, I would consider selling though, because it seems like housing could follow the DOW and advance significantly before we get a much much large collapse like what is about to come to Europe, Japan, and China.
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