Tuesday, July 18, 2006
Technicals Point Lower For Precious Metals
A quick look at the days numbers and then some technical stuff. "Gold tumbled late on Tuesday as aggressive selling was triggered by a rising dollar and speculation about another U.S. interest rate increase by the Federal Reserve to head off inflation, analysts said. Spot gold plummeted to its lowest level since July 11, at $628.90 an ounce. It was last quoted at $630.30/631.30 an ounce, way below Monday's late New York quote at $650.30/651.80."
"In other precious metals, silver fell to $10.48/10.58, from $11.02/11.12 previously. Platinum fell to $1,217/1,223 an ounce from $1,237/1,242 late Monday, while palladium declined to $308/313 an ounce."
Here is the Elliott Wave short-term forecast for Gold and silver, after trading ended last night. "Today’s strong downward reversal in August Gold, coming on the heels of two significant non-confirmations (XAU/Gold ratio and Silver, see Friday’s Update), along with a test of a Fibonacci retracement area and satisfying a Fibonacci time relationship, strongly suggests that wave 2 or B up is complete."
"In Friday’s Update we showed two charts of the significant divergence between the XAU/Gold bullion ratio and gold, plus the non-confirmation between gold, which pushed to a high today, and silver, which topped on July 12. These two bearish signals alone suggested that gold was in the very latter stages of its upward correction from the June 14 low ($546.40)."
"When one adds in the fact that prices pushed to a Fibonacci retracement area, and a Fibonacci time relationship exists whereby wave 1 or A down unfolded in the exact number of days as wave 2 or B up, 34 (-1), the odds are very strong that a significant turn down is starting right now."
"Today’s outside-down day is a good trading pattern to kick off this move. Prices should not revisit this morning’s $677.50 high again if the top is in. The target for this leg lower is $450-$500, the upper end of which is close to the point where there would be two equal legs down from the $739.20 peak (May 12)."
"The odds are that Silver’s upward correction from the $9.38 low of June 14 (basis spot) is over. Prices should be in the very early stages of a decline that draws silver to the next target of $6-$7. Prices have no business being above this morning’s $11.83 high again, so this is the 'risk' for a bearish stance at this juncture. While not expected, any push above $11.83 would mean the upward correction was extending. Next Update: Wednesday, July 19, 2006."
"In other precious metals, silver fell to $10.48/10.58, from $11.02/11.12 previously. Platinum fell to $1,217/1,223 an ounce from $1,237/1,242 late Monday, while palladium declined to $308/313 an ounce."
Here is the Elliott Wave short-term forecast for Gold and silver, after trading ended last night. "Today’s strong downward reversal in August Gold, coming on the heels of two significant non-confirmations (XAU/Gold ratio and Silver, see Friday’s Update), along with a test of a Fibonacci retracement area and satisfying a Fibonacci time relationship, strongly suggests that wave 2 or B up is complete."
"In Friday’s Update we showed two charts of the significant divergence between the XAU/Gold bullion ratio and gold, plus the non-confirmation between gold, which pushed to a high today, and silver, which topped on July 12. These two bearish signals alone suggested that gold was in the very latter stages of its upward correction from the June 14 low ($546.40)."
"When one adds in the fact that prices pushed to a Fibonacci retracement area, and a Fibonacci time relationship exists whereby wave 1 or A down unfolded in the exact number of days as wave 2 or B up, 34 (-1), the odds are very strong that a significant turn down is starting right now."
"Today’s outside-down day is a good trading pattern to kick off this move. Prices should not revisit this morning’s $677.50 high again if the top is in. The target for this leg lower is $450-$500, the upper end of which is close to the point where there would be two equal legs down from the $739.20 peak (May 12)."
"The odds are that Silver’s upward correction from the $9.38 low of June 14 (basis spot) is over. Prices should be in the very early stages of a decline that draws silver to the next target of $6-$7. Prices have no business being above this morning’s $11.83 high again, so this is the 'risk' for a bearish stance at this juncture. While not expected, any push above $11.83 would mean the upward correction was extending. Next Update: Wednesday, July 19, 2006."
# posted by Ben Jones @ 2:35 PM 
Comments:
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Anyone can sign up for the EWI fre week by clicking the icon at the bottom of my housing blog.
Keep in mind, these are short-term forecasts. I will check out their longer-term thoughts before the free week is over tomorrow night. This gives you an idea of how this stuff goes. I must say, it is much more meaningful with the charts and the wave counts.
Keep in mind, these are short-term forecasts. I will check out their longer-term thoughts before the free week is over tomorrow night. This gives you an idea of how this stuff goes. I must say, it is much more meaningful with the charts and the wave counts.
Wow. If EWI's projections come to pass, I'm backing up the truck to the local dealer (especially since I missed the last bottom).
TJ,
That's the way to use technicals, IMO, as entry and exit points.
BTW, another darned maintenance scheduled:
'Tuesday, July 18, 2006 Scheduled outage at 5PM PDT. We need to perform hardware maintenance on the photos system for Blogger.'
That's the way to use technicals, IMO, as entry and exit points.
BTW, another darned maintenance scheduled:
'Tuesday, July 18, 2006 Scheduled outage at 5PM PDT. We need to perform hardware maintenance on the photos system for Blogger.'
I'll start looking for an exit when everybody else is lined up at the entry point. Until then, there's only buying opportunities.
This was the first time I heard that prediction. Although in for the long term, this makes me think whether to be the jump in/out camp. volatility is to be expected , but a $200 correction...Ahemmm. Wait ,and watch I guess, but sure will watching. I was reading the yahoo boards ,and several old timers were saying to jump out in May, and get back after the bump..Just as they predicted. Is EWI generally on spot? Not familiar with their predictions other than their long term wave charts...
gofast,
True, but notice that with both currencies and metals, the retracement didn't even cover the losses from the past two days.
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True, but notice that with both currencies and metals, the retracement didn't even cover the losses from the past two days.
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