Change-In-Trend

with Anthony, ZigZag & Platy

Special Report – Gold

I think gold is close to a fantastic buying opportunity, however patience is required. I’m going to look at this problem from a ChangeInTrend perspective and ignore all of the other analysis that you read and hear on the web about GLD:HUI ratios, sentiment, COT reports, i could go on. Not to take away from the confirmatory signals that these tools can provide, however, one must remember that time is the most important ingredient in trading and these tools just cannot provide it.

First of all this special report is going to be fairly short. The reason is, to me the picture is glaringly obvious as to where gold is going in the next month or so. I have spoken before about reactionary waves or impulse waves. These are waves of energy that repeat in a series of 5 mega, major, minor and mini waves. These waves have nothing to do with Elliott Wave mumbo jumbo (non-sense) and the rules are more open to interpretation but generally each mini wave 5 completes a minor wave, each minor wave  completes a major wave so on and so forth.

So lets take a look at the chart below. There are a few things going on here so lets look at each one in turn.

Wave Structure. Since the September 2011 high there have been 4 major waves (yellow) each of lower highs and lower lows. So is the bottom in May “THE” bottom. The short answer is no because there is no lower low.

Secondly from a minor wave perspective we have not yet completed wave IV (red) so we are due a bit more upside (same as equities into end of May-early June) before moving down to the final minor wave 5 low completing the major wave 5 low and “THE” bottom in late June.

For the very short term we have just complete mini wave 3 (purple) now looking for a push down to mini wave 4 before completing mini wave 5 and minor wave 4 in late may-early June.

Andrews Pitchfork. The downwards sloping Andrews-Pitchfork has contained the slide since the February top and price is due to approach the mid-fork line at the end of May where i am expecting it to reject thus completing the mini wave 5 and minor wave 4. At this point i expect GLD to begin a mini 5 wave down into minor wave 5 and major wave 5 completion somewhere around the 140 level and the lower Andrews Pitchfork median line.

Cycles. Using the Natural Cycle progression forecast for GLD i managed to incorporate the mini 5 wave down structure within the context of the cycle progression, remember rule 101 from yesterdays post. Also on the above chart i experimented with cycles ranging from 60-65 days drawn from major highs and lows back in June and August 2011. These fixed cycles have done very well at pinpointing important highs and lows.

So you can see from the above the ChangeInTrend method is about combining all of these aspect together to form a picture rather than focusing on one individual component. Its also very important to have a projection for the future in terms of adjusting and formulating a strategy but also being nimble enough to change your strategy should it not play out according to plan. An example is that in the back of my mind the mini wave5 strucutre may actually need to form a higher wave 3 which is in mini wave 5s current position which would send the mini wave 5 projection probably into the 1st week in June instead of late May and will require a rephase. So this is in the back of my mind, but i will be keeping a close eye on that important Andrews Pitchfork to see how price reacts around it. So for the very short term lets see how GLD behaves around the 155.50-156 level where the Andrews pitchfork line resides.

Anthony

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27 comments on “Special Report – Gold

  1. Pingback: S&P500 Downside Target Reached & Gold Update « Change-In-Trend

  2. Anthony Tudela
    May 29, 2012

    Im putting an order in here for an S&P buy very short term trade 2 days max reduced position size @1311. Lets see if it gets filled.

    Anthony

    • jwdchan
      May 30, 2012

      Hi Anthony

      Doesnt look like your order got filled today @1311, wondering if you may have raise that target in order to get in today for short term trade?

      Thanks!

      • Anthony Tudela
        May 30, 2012

        jwdchan

        You are correct it was not filled, i will not be raising my target as i do not want to chase higher prices for the next 2-3 days. Although i expect prices to rise a fair bit Ill sit this out until i am ready to take a short trade. If you know that a storm is coming you don’t hang out your washing.

  3. Joao Pinto
    May 29, 2012

    Hi. Very nice analysis. Thanks for sharing. I found you through solarcycles.net

    • Anthony Tudela
      May 29, 2012

      Hi JP

      Welcome. John over at solarcycles puts together some interesting analysis particularly on sun spot cycles.

      Anthony

  4. jwdchan
    May 28, 2012

    Hi Anthony

    Understand you let go all your long position already, congrats on the gain. Wondering now is there a reason why you not let go half and see how Tuesday goes? remember you mention the low is on June 4th, and looking at your chart 31st is a high. Exiting now, wont you be exiting a bit early? that is like 3 days of trading higher opportunities. And considering the future went up higher, wont the chance of us going higher on Tuesday went higher.

    • Anthony Tudela
      May 28, 2012

      Jwdchan

      tomorrow is due to be a down day mini wave 4, so i don’t see the point in chasing prices higher today just to be greedy. I make enough they can keep the rest. What happens if my cycles are wrong and we dont last until 31 May and we crash down, all my profits get wiped out.

      There will ALWAYS be another opportunity to make a profit if i have the capital there to invest.

  5. Darren
    May 28, 2012

    Hi Anthony

    “one must remember that time is the most important ingredient in trading ”

    Bingo!

    You don’t know how many times I shook my head when I read people calling for new highs in Gold after the September and December 2011 lows.

    It’s always refreshing to find others that share a similar view about time and structure within a chart. I’ll be following your progress with interest.

    Regards
    Darren

    • Darren
      May 28, 2012

      By the way Anthony, do you mind if I ask where you derived your 60/65 day cycle from?

      • Anthony Tudela
        May 28, 2012

        The cycle was just an experimentation using a prior major top and bottom to show where the next time cycle projections fitted in historically with other major highs and lows, these fixed cycles just happened to be 60-65 days in length.

        Anthony

        • Darren
          May 28, 2012

          ok, thanks Anthony. I thought it may have been linked to a planetary cycle. Whenever I see recurring cycles I try and see if they are related to a planetary cycle however my knowlege of the planetary stuff is limited.

          Darren

    • Anthony Tudela
      May 28, 2012

      Hi Darren

      Glad you are enjoying the content.

      Anthony

  6. Anonymous
    May 28, 2012

    Hi Anthony

    “one must remember that time is the most important ingredient in trading ”

    BINGO!

    You don’t know how often I shook my head when I heard people saying Gold would move to new highs from the September and December 2011 lows.

    It’s always refreshing to find others who share a similar view about time and structure in a chart. I’ll be following your progress with interest.

    Cheers
    Darren

  7. Malcolm McIntyre
    May 28, 2012

    Hi Anthony. Very interesting and it’s a pleasure to have encountered your work in the past few days.
    Looking back to the start of this blog, am I correct to infer that you had a previous one? I’d be interested to have a look if that previous site is still in existence.
    Thanks
    Malcolm

    PS: FYI, I’m not a trader (currently…) but rather, interested in the nature of reality. As far as EW analysis goes, in the context of your comments about it in an earlier post, pretzelcharts.com is a guy who’s at the top of his game. He’s in the process of changing/has just changed to another site so he can better control trolls, but currently is still posting at pretzelcharts although the discussion has moved. You might be interested in a look at him out of professional interest.

    • Malcolm McIntyre
      May 28, 2012

      edit: above ref to EW charts should be to “comments in this post” – had come back to this post to comment after reading through earlier analysis.
      Regards
      Malcolm

    • Anthony Tudela
      May 28, 2012

      Malcolm, Welcome

      yes i used to use Blogger, very cumbersome and the presentation was just sub par. So i moved to wordpress (much happier now).

      You can google change-in-trend.blogspot.com this will bring up all my prior posts.

      I was interested by your comment “, interested in the nature of reality” what are you inferring by this comment?

      Im not aware of Mr Pretzel but will check it out later, thanks.

  8. Jim
    May 28, 2012

    I’m wondering why the PF is drawn from that expansion bar in W3 yellow, and not from the top of W2. Thanks for your site, Anthony.

    • Anthony Tudela
      May 28, 2012

      Jim, good question.

      This is known as a modified Schiff pitchfork and can be drawn halfway between the upper and lower pivots. Sometime with pitchforks you have to be creative but an understanding is needed as to why you can use this technique. So on the gold chart i saw immediately a downward sloping channel and pinpointed the 2 pivots likely to define the bounds of the channel. However, i knew that there was no third pivot that fell directly between the 2 pivots i therefore used half the previous range (pivots) to form a modified Schiff line when no pivot was available.

      Thanks
      Anthony

  9. Jason
    May 28, 2012

    Hi Anthony,
    So does mini wave 3 have to go higher than mini wave 1? It would seem to me from your report that it does not which is interesting. In your last report regarding the S&P you said that you expected mini wave 1 of wave 4 had to go over mini wave 4 of wave 3 for it to count. If that were the case it would seem we are running out of time to get 5 waves in to complete wave 4 before May 30-31. If this were not the case I could see us currently being in the middle of mini wave 3. What do you think?
    TIA,
    Jason

    • Anthony Tudela
      May 28, 2012

      Hi jason good pickup. Generally it does, however i put my emphasis on structure the larger the wave as often volatility on a daily basis and within small enough time frames may play with the structure i.e. higher highs and higher lows. I did mention that i was suggesting that maybe mini wave 3 is not complete on the S&P500 and this was something i was looking out for. An additional day of dollar strength however would suggest mini wave 3 is in and we are looking at moving down into mini wave 4. If i havent answered your question let me know.

      Thanks
      Anthony

      • Jason Gach
        May 28, 2012

        The futures market is up quite a bit at my posting, 10 points. Do you take into account the futures market at all? It would seem at least for this week it might play a factor since the market will be closed Monday. We could be up in the futures Monday finishing mini wave 3, then down Tuesday for mini wave 4 then back up to the 30th to finish off 5.

        • Anthony Tudela
          May 28, 2012

          Yes i do Jason, i have just closed out my long S&P at a gain. This was also what i was looking at, also considering the size of the wave 4 decline i might aswell book a profit rather than suffer an unnecessary drawdown. I could always re enter at the wave 4 low before heading up into 30 May.

          Or i might just sit out the mini wave 4 low and mini wave 5 high until we are in an area to go short. Theres no point in chasing the small gains.

          • Jason Gach
            May 28, 2012

            I wish I was so lucky. I have to wait till Tuesday before I can do anything.

            • Anthony Tudela
              May 28, 2012

              That’s the advantage of using futures, you dont get shut out of the “after-market”. Ofcourse it also means you need to be more vigilant with what goes on.

  10. Anonymous
    May 28, 2012

    Dear Mr Tedula
    Can you please give the downside target at end June for gold and silver
    in price of gold & price of silver (rather than GLD) Thanks

    • Anthony Tudela
      May 28, 2012

      Akismet

      Its T-U-D-E-L-A

      In future please introduce yourself by applying for a WordPress account and offering something to the group, this is not the first time that youve been here demanding information as an “anonymous” user.

      Thanks
      Anthony

      Ceteris paribus……..

      Gold

      Spot Gold/GLD = 1573/152.68 = 10.30
      10.30*140 = $1442

      Silver

      Spot Silver/Spot Gold = 0.018
      0.018 * 1442 = $26

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