Friday, March 10, 2006
EWI Technical Friday Update On Gold And Silver
Here is the Friday update on gold and silver from Elliott Wave. "Wednesday night we laid out the overall bearish case for Gold going forward. Tonight we’ll get back to the near term only. The decline from yesterday’s $551.70 intraday high (basis April) to today’s $534.50 intraday low(April), occurred against diverging hourly momentum oscillators. The non-confirmation leaves open the possibility that today’s low is either a fifth wave from the March 2 high ($572.50) or the “B” wave of an irregular upward flat correction."
"However, daily momentum oscillators remain pointed lower, which indicates that whatever near-term bounce is left in gold should be completely retraced thereafter, as the larger downtrend continues. Prices may still try to come up to $550-$560 (basis April), but as before, I remain uncertain whether this bounce will develop. As we noted Wednesday, if it does, we would view it as a prime opportunity to add to or to establish a bearish stance in gold, using the March 2 high as the 'key level' in order to keep risk to a minimum."
"Our stance remains bearish and our initial target is still the midline of the parallel trendchannel, which crosses near $503 next week in the spot market ($501 in the April contract). There is more bearish potential once the area surrounding the midline is breached. The .382 retracement of the rise from the August 1999 low is $452 (basis spot)."
"Wave 2 up in May Silver either topped yesterday at $10.09 or it should do so with one more minor push above this higher early next week. Wave 3 down is the next large move for prices, according to our interpretation of the wave pattern. Coming under $9.75 would be a strong sign that wave 3 is already underway. As before, the first downside target surrounds the $8.950 level, which is the .382 retracement of the entire rise from the August 30, 2005 low and (arguably) the bottom of a previous fourth wave. More bearish potential exists. Only an unexpected rise above the $10.33 top would negate this forecast."
"However, daily momentum oscillators remain pointed lower, which indicates that whatever near-term bounce is left in gold should be completely retraced thereafter, as the larger downtrend continues. Prices may still try to come up to $550-$560 (basis April), but as before, I remain uncertain whether this bounce will develop. As we noted Wednesday, if it does, we would view it as a prime opportunity to add to or to establish a bearish stance in gold, using the March 2 high as the 'key level' in order to keep risk to a minimum."
"Our stance remains bearish and our initial target is still the midline of the parallel trendchannel, which crosses near $503 next week in the spot market ($501 in the April contract). There is more bearish potential once the area surrounding the midline is breached. The .382 retracement of the rise from the August 1999 low is $452 (basis spot)."
"Wave 2 up in May Silver either topped yesterday at $10.09 or it should do so with one more minor push above this higher early next week. Wave 3 down is the next large move for prices, according to our interpretation of the wave pattern. Coming under $9.75 would be a strong sign that wave 3 is already underway. As before, the first downside target surrounds the $8.950 level, which is the .382 retracement of the entire rise from the August 30, 2005 low and (arguably) the bottom of a previous fourth wave. More bearish potential exists. Only an unexpected rise above the $10.33 top would negate this forecast."
# posted by Ben Jones @ 6:45 PM 
