GLD update 08/22

GLD: Gold is of course the bear-talk of the day, but it has now put in a nice bounce, so is the low in?! Assuming the ongoing c-wave down will become five waves, which is rather typical, than the quick and short answer is: no. Price should now be in intermediate-iv of major-c. Note how intermediate-iii tagged the 1.618x Fib-extension quite nicely, which is a very common 3rd wave target and now price should ideally bounce back to the 100% Fib-extension for wave-iv, before wave-v takes hold. In the ideal world wave-v than equals wave-i, to bring price down to the 200% extension at $108.78. For now, all my systems are pointing back up and on buy, wanting to see higher prices. Since 4th waves are a bit tricky and in this case wave-ii was a flat, we should expect it to become a zig zag, with likely minor-a likely soon completed, than a minor-b pullback, followed by a minor-c to the ideal target of $116ish. Note that by now the current 4-day rally is already the longest (in price) since the April high, telling us that indeed things are changing. BUT, please don’t try to bottom fish here. Price is WELL-below its 200d SMA, and ALL SMAs are pointing down, are bearishly stacked (20<50<100<150<200) and price is below ALL SMAs. There’s no better sign of a bear market than this. And there’s really no need to go aggressively long a bear, contrary to what anybody may say.

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I know there are a few well-know metal experts pounding the table a most significant low is soon in, but we’ve heard to story for several years now. As usual, price must confirm the thesis. And if it does’t than all we’re dealing with are broken clocks that start to sound like Mr. Prechter who kept calling for a bear market in stocks from 2009 to 2016… Thus, IF a multi-decade low is around the corner, with gold possible soaring to $11000+ one can easily wait a few months for price to confirm the thesis by waiting for it to move back above its 200d SMA. By then price is only in the $120s instead of $110s, so you’re giving up say 10% to be much more certain to gain 10,000%. That’s proper risk/reward management!! Until then, all the experts in the world can say whatever they want, but I say “sit on your hands, wait for confirmation and then hammer the buy button.” You trade price, and price only. We don’t trade anybody else’s opinion. Hence, why my analysis is price-based, and I know my triggers and if it doesn’t trigger then it doesn’t. Moving on, there are plenty of other things we can trade 🙂

Lastly, gold is inversely related to the US dollar, not so much to the stock markets. Watch the dollar to know what gold will do. Works most of the time.

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