We are publishing an excerpt from Elliott Wave International (EWI) [1] here for non-commercial fair use:
“[Gold] remains in a large degree decline that, when complete, will correct the entire rise from August 1999, at a minimum. The target remains the area surrounding the $600 level, which is the apex of the previous Primary wave 4 (circle) triangle, as well as the 38.2% retracement of the rally from August 1999, in percentage terms (i.e., log scale). Shorter term, there are now several ways to interpret the wave structure of the decline from the March 17 fifth- wave peak. One way is a series of ones and twos, which we had been showing on our short-term charts over the past several weeks. Another way is shown on the daily chart above. This interpretation counts an ABC decline to the April 1 low, wave (W), and then a running triangle for wave (X), to be followed by another ABC decline for wave (Y), creating a (W)-(X)-(Y) sharp correction. Both interpretations should draw prices toward the $600 target cited above, so there is no disagreement between the two messages each wave structure conveys. On the way toward $600, gold may pause at $800, which is an apex of a smaller degree triangle. Whether or not prices do indeed pause, the main target ($600) remains firmly in place. Thus, our stance remains bearish.”
Official position of bhc investment remains against that of EWI. The following are some comments taken from [2]:
Opine said...
Agri, especially corn seems to be shooting up due to the market conditions, should pull most of the others with it.Precious metals on the other hand is getting the shaft, look at Gold, technical chart looks bearish. Number of contracts are dwindling and large speculators seem to be increasing their shorts. I wonder if this would mean an impending drop below 850.Any insights or opinions?
Sunday, June 15, 2008 11:05:00 AM
Boon said...
-- I believe the central banks cartel is the one responsible for the concentrated net short positions in Silver and Gold. They have been doing that for years. The most important question here is how are they going to cover them all back without suffering massive losses.
-- Their concentrated net short positions now account for nearly 80% of the open interest in the Silver market and over 60% of that in the Gold market. You will not hear this reported by the media.
-- We continue to believe the price of Gold will reflect the investment demand in the inflationary environment we are in, which we have been predicting all along.
-- Markets are irrational, but strength and weakness tend to 'propagate' from one dominating time frame to another. In my view, the previous all-time high at 850 is already broken. The correction we are witnessing right now is a good-bye-kiss, not the beginning of a secular bear.
-- The fact that I am betting against the central banks cartel doesn't worry me. The fact that after all those 'massaged' jobs and GDP reports and nearly 80% and over 60% of concentrated net short positions in Silver and Gold, respectively, they can only manage to bring these precious metals down less than 30% from the recent highs makes me think: "it's gonna be a heck of a ride when the sentiment turns!"
-- If prices are to fall below 850, I will buy more.
Monday, June 16, 2008 10:22:00 AM
Felix The Cat said...
Same goes to me for Gold. The inflationary factor will definitely push Gold price further. Maybe sligtly >usd1k.
Tuesday, June 17, 2008 2:51:00 AM
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1 comments:
Thanks for providing another excellent write up along with Prechter's view.
I am inclined to Disagree with him with respects to the outwardly bearish view of gold he holds. And am betting against him.
On the other hand the central bankers, FED and ECB are trying their hardest to prevent a collapse in the markets(thus prolonging the pain).
My observations to this effect :-
- Rate Hike jawboning is taking a U-turn by the FED and even the ECB based on the latest precarious earnings(Loss more like) of the financials. But the Dollar has strengthened with Nothing actually changing, so it seems to be working so far.
- Paulson calling in favours in latest talks with chinese counterpart, resulting in billion dollar deals. Also the chinese have been buying an increasing amount of US treasuries in april.
- FED meeting with financials behind closed doors to solve the crisis, mainly trying to provide a clearing house for illiquid paper.
- Latest talk that china may decrease subsidies for oil thus bringing down the demand and price of crude.
- ICE futures will be regulated according to the CFTC with increasing cooperation between US and the continents.
- Saudi talks next week to try to bring down the price of crude which is seen as the main cause of inflation.(In my opinion if the dollar did not depreciate 30+%, crude prices would be at an adjusted 90 only)
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My view of the events yet to occur or in the process:-
- ALT-A and ARM reset debacle and subsequent effect of the downgrading of securities held by the monolines(AMBAC,MBIA).
- Supply issues for commodities (corn, etc) not resolved due to extreme weather conditions worldwide.
- Impending danger of Euro imploding due to the dissent of the countries within.
- Geopolitical issues with Pakistan /Afghanistan now taking precedence over Iran as the area most likely to erupt.
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I still foresee an impending crash in equities in the US and emerging markets (This to some extent has occurred in China, Vietnam, HK).
Gold, am betting that it would provide a better store of value as the global economic situation this time doesn't just spell inflation but Crisis too.
Thanks for reading.
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