Monday, May 30, 2011

Short Term Gold Update

Short term Gold has been unfolding according to the wave count here and the question now is: Has the wave 4 correction completed as a small triangle as per the green count below?

Further time is required before the answer will be known for sure and perhaps Gold will give us a hint with a strong push upwards in the coming days. However, my thoughts are still with the primary count in black that sees a longer correction playing out as a triangle. For this to be valid, I wish to see Gold decline in the coming days and head downwards to the 1400 levels to complete the 3rd leg in this correction.

Longer Term Gold is here and a push to the 1600 levels or slightly higher is required for a significant top to be in place.

Short Term: A break upwards out of the channel as shown would imply that the short term correction has most likely completed.

Sunday, May 29, 2011

Australian Interest Rates

The next RBA meeting is almost upon us and there will be the usual adjectives and complexities in describing the rationale for the pending decision on the target cash rate. The sideways movement in the 90 day rate for the last several months will probably see the RBA leave their cash rate target on 4.75%.

So where will interest rates go? Using Elliott Wave for interest rates is more complex since rates cannot be anticipated in waves of 5 (like the stock market) otherwise the rates would eventually be over 100%. Interest rates move in waves of 3 oscillating over many decades and I'm assuming a bottom has been reached on the chart below - since a 3 wave multi-decade decline that started in 1982 now looks complete as of March 2009.

This 90 day rate has now seen five small waves up and a correction needs to occur which may see slightly lower interest rates or more sideways depending on the depth of the correction. Longer term, higher rates are on the horizon.

Saturday, May 28, 2011

XAO Short Term Update

The XAO has continued to correct within a well defined channel. The structure as it stands now looks complete as a triple combination elliott wave correction.  A push up thru the channel lines needs to occur now, although this is still no guarantee that this correction is complete as sideways move could still unfold. What will provide clarity is an aggressive push up out of the channel.

Monday, May 23, 2011

Short Term XAO update

The XAO came close to invalidating the current count today and may still do so tomorrow. In the first instance, further declines will imply a correction of higher complexity unfolding (eg a triple zig-zag correction) down to the 76.8% retracement levels.

Pushing higher now will leave the count unchanged and today's pullback would be considered a wave '2'.

The multi-year view is here and the very long term view is here.

Long Term Gold - Daily

The longer term Gold chart implies a push higher is needed to complete a decade long bull market leg. The longer term Gold post is here. Once the current correction is complete (shown at arrow) then a push higher should complete this wave (5).

Short Term Gold Update

Gold has been unfolding in line with the last short term post. If a small triangle is unfolding as per the alternative count, then this should finish very soon and see gold head to the 1600 levels.

The longer term post with a daily count can be found here.

Thursday, May 19, 2011

XAO Short Term Update

Yesterday's All Ordinaries update covered the market action we saw today, so, some confirmation on a potential bottom for the recent correction. Progression upwards in waves of 5 should now unfold...more below...

XAO Short Term Update

The XAO may have found a bottom at last. The next several trading days should provide additional insight on this assessment, however, a break out of the channel line (shown) needs to occur next.

In addition, the 5000 level should ideally be broken in shorter time than the second a-b-c leg took to form eg less than 14 days. This would provide additional confirmation that the next leg up may well be underway.

Gold Short Term update

Gold is still anticipated to head to higher levels at around 1540 whilst a corrective flat or triangle continues to unfold. The count below has been updated to account for recent wave action in completing the (b) wave. Since Gold tends to like Triangles, I will assume a triangle is unfolding and we are currently seeing perhaps only a portion of 1 leg (the A leg).

The next action should see 5 waves up to the 1540 levels or higher and thus completing the (c) leg of a flat (3-3-5). Once complete, a decline should kick in to form wave 'C' and should occur in 5 waves.

Once this correction completes a push to new highs should unfold before a major multi-year correction occurs as described here

Monday, May 16, 2011

Complex Corrections

Corrections are by far the hardest to predict as their nature is usually unpredictable unless some obvious  portion has already completed. However, there may still be further corrective action at hand once a corrective wave appears complete. Double combinations fit this description and they can contain a triangle for the ending wave structure. Identifying this triangle will help to understand the next move when complete.

Many Elliott Wave analysts will incorrectly assume the triangle is actually part of the next wave sequence (eg 1st and 2nd waves) or a wave 4, thus the count will be incorrect. Triangles appear regularly in corrections and it's beneficial to understand when and where they can occur.

Sunday, May 15, 2011

GOLD update

In the previous GOLD post, discussion of a top in the precious metal was reviewed with it's basis on a completed or completing 5 wave thrust that commenced in 1999.

On the very short term 30min chart, it doesn't appear that a significant decline is underway, however, a decline does appear to be unfolding perhaps down to the 1450-1400 levels. This decline may form a 4th wave triangle before moving to new highs and would take some weeks to complete.

On the daily chart (not shown) the count doesn't look complete either, hence a correction now, then a push to new highs to form a significant top is anticipated.

Saturday, May 14, 2011

MACD and Elliott Waves

Short term XAO update.

The last XAO post discussed a high level of confidence that the XAO would need to decline further from a clear lack of a 5 wave upwards thrust from the corrective low. This has occurred and the current correction is on the 61.8% retracement level and it appears further declines are needed - perhaps down to the 4730 level.

Once finished, the XAO is anticipated to head to new temporary highs as outlined in this post.

Monday, May 9, 2011

XAO Update

XAO Update

The previous XAO post dealt with the possibility that the recent short term correction may have completed. As of today there is still some doubt since there is a lack of a clear 5 wave impulse thrust out of the corrective low.

Should further declines occur then the 'X' wave may be a more complex corrective pattern.

Wednesday, May 4, 2011

Long Term Gold Price - A Top at hand?

A Top in Gold?

All eyes on Gold - but for the opposite reason.

The gold price has reached unprecedented levels with what looks to be a significant 5 wave upwards thrust near or at completion. This has significant implications for the Gold market over the medium term and may see a several hundred dollar sell-off over the next few years.My last major update on Gold was back here and the wave count has remained the same - with wave (5) yet to complete.

Under this count, the gold price would need to decline to the bounds of the previous wave (4) at around $1000 or lower to the previous wave '4' of a lesser degree at $600.

Looking at the shorter term wave structure there does remain the possibility that another small push upwards would complete the small degree wave count. More on this later...Be very cautious.

XAO Multi-Year Outlook

The overall outlook on the XAO is extremely bearish based on Elliott Wave analysis (in addition to the massive problems globally with debt that ain't going away anytime soon).

The view below builds on a much larger outlook here that simply implies that XAO needs to return to the long term trendline  - some would call this GFC II or a double dip recession. Obviously there are other possible scenarios that may play out - but at the moment there is enough evidence in the elliott wave count to suggest a large correction of some form is occurring (I'm assuming a simple zig-zag correction based on an initial 5 wave decline).

A suggested target for the upwards 'B' wave circle at 5325 based on a Fibonacci ratio to keep the index under 61.8% retrace (5416). Driving above 5416 would have me reconsider the count as a 'B' wave in a zig-zag should not typically retrace more than 61.8% of the 'A' wave.

This top would complete around the start of August, hmmm, I wonder if that's when the 787 dreamliner will be released?

Ready for a turn on the XAO?

A short update on the XAO now that the level is the last post was hit today. A turn is certainly a strong contender but must satisfy the rules as described below...

Tuesday, May 3, 2011

XAO Short term Update

In the last XAO post it was described that the 'X' wave could drop to lower levels meaning that it was not complete. This has occurred and there is a good chance that some further downside needs to unfold based on the wave structure. A 50% retracement would tie in well as a bottom for decline before the next leg upwards commences. Levels to watch are 4815 for a bottom for the current 'X' wave correction, breaking above 4950 would most likely indicate the next leg up is underway.

Interest Rates Again

No surprise today - RBA has left the cash rate target unchanged. As per last post, the RBA cash rate target lags the 90 bill rate (only just).