By Ramki on January 14, 2010
Hello again. I am inclined to say that the post of 31 Dec was based on incomplete data for the short term because of the gaps. I had assumed (presumably incorrec tly) that we had an overlap. Perhaps the 4th wave was lost in the gap, and we really had a full 5-wave pattern there? Go back and take a look at the first chart for 31 Dec, and you will understand what I am talking about. In any case, the view in the bigger picture was that we will get a rally in Gold, and sure enough, we have already seen a move from 1074 to 1161 (over 8%). The key question to ask now is whether this marks the end of the move.
From the notations on the chart to the right, you will observe that we have completed what looks like a 5 wave move from the low at 1074. As we know, a correction can never be made up of 5 waves. So either this is the beginning of a larger correction, or this is the 1st wave of the final impulse wave. Either way, I think we will get a further rally in the coming days. So be prepared for that upmove. Commodity traders, and especially those wishing to hedge their Gold purchases should take this likelihood into account.
Posted in Gold | Tagged elliott wave analysis of gold
By Ramki on January 4, 2010
Two consecutive closes above the prior significant high means we should re-evaluate the wave counts and this has been done on the chart. The main suspect until this time is what I have labelled a 5th wave of the third wave. That looks like a 3-wave movement withthe 3rd leg measuring the same as the first leg. However, we now have to go along with the view that the 3rd leg was actually an extending wave within the aforesaid 5th wave itself, which is why we got a swift down move as a 4th of the next degree. We are then currently in the 5thwave of the sequence that started off back in Q4 of 2008. The targets of this fifth wave are mentioned on the chart, and we should go with that view in our trading activities until proved wrong by subsequent movements.
Posted in India | Tagged Bombay, BSESN, elliott wave analysis of Sensex, Mumbai, Sensex
By Ramki on December 29, 2009
One of the reasons why traders should learn Elliott Wave Principle is because it gives you clues about the changing whims of the market much before any other system can. Remember, NO ONE can command the market to do as he interprets the charts. However, a smart analyst can tell you a low-risk entry level, and also advise you how to monitor your position. You just cannot take a position, lock it away in a box for a few weeks/months and hope to come back and see it delivering a big profit. You got to watch the market and take action as the market dictates.
The short term chart for Gold is telling us that the downmove from 1226 is probably not over. So we should exit our longs NOW. Have we changed our expectations for a rally in Gold? No way. We are still saying Gold will experience a significant move higher, at least 38% of the decline from the top, which means AT LEAST $68 from the lows, or in other words between 5 and 6% higher once we finish this decline. That is the minimum! In order to capture a 6% move, we should risk no more than 1% to 1.5%. It doesnt make sense to trade otherwise. For all these reasons, we have to step aside now and wait for the correction to finish. Kapish?
Posted in Uncategorized | Tagged elliott wave analysis of gold
By Ramki on December 24, 2009
Now that Gold has staged a smart recovery from the lows, [ and is likely to close the week above 1100 
], I thought it will be instructive to post how one should have traded this final fifth wave. As always, you will find the comments written on the chart itself. Briefly, one could have used a 50-61.8% retracement to go long, and placed a stop below the prior low. More on the chart of Gold. Enjoy!
Posted in Gold
From the notations on the chart to the right, you will observe that we have completed what looks like a 5 wave move from the low at 1074. As we know, a correction can never be made up of 5 waves. So either this is the beginning of a larger correction, or this is the 1st wave of the final impulse wave. Either way, I think we will get a further rally in the coming days. So be prepared for that upmove. Commodity traders, and especially those wishing to hedge their Gold purchases should take this likelihood into account.
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