In my 29 November Elliott Wave commentary on Gold, I suggested that Gold would probably need to come down a bit before rallying. The reason was I was looking for a much sharper recovery than what I was seeing. However, the markets just fooled me. Sure it did come off to 1700, but it didnt quite get to 1662 again What happened there?
Well, as you can make out from the first Elliott Wave chart of Gold that you see here, we got an irregular 4th wave, which is a complex correction, and that pause sort of took me off the track. Still, all is not lost. We do have the making of an extended 5th wave, and usually that is a warning of a sharp correction. But beware of paying too much attention to the very short term charts! I have often warned you in this blog, (and if I remember correctly, also in my book “Five Wave to Financial Fortune”) that you can make decent money by trading the bigger waves. So what is my take in the bigger picture?
Elliott Wave analysis of the loger term Gold charts tells me that there is a reasonable chance for us to go dramatically lower, say to around 1310 during 2012. You should therefore start making plans to identify a good, low-risk selling level to capture that huge move (if and) when it happens. Of course, I hope to be around to give you my two cents worth at that time, but today’s Elliott Wave comments on Gold’s outlook is laying the foundation for that move. Just remember that you read it here first, and when others pick up the ideas and publish it, you know that they are also secret members of the Wave Times club!