Why Gold is About to Power Higher

Source:

"Gold should be poised to power higher near term."

The gold bull has been moving in a very reliable Elliott Wave and Fibonacci patterns for many years now, but once in awhile the waters get a little murky. Recently we have seen a fair amount of volatility near year end as position squaring and year-end machinations take hold. That said, it does appear that gold should be poised to power higher near term, and I'm looking for a completion to a 5-wave rally that began from about $1,040 per ounce in February of this year.

Over the past several weeks, I see a clear Fibonacci trading day relationship on gold's swings from pivot highs to pivot lows. Eight days of correction, 13 days of rally, eight days of correction is the recent pattern over the past five weeks or so. Below is a chart outlining these crowd behavioral based patterns that I rely on for both my trading service and market forecasting services. You can see the clear relationships, confirmed by the stochastics indicators at the tops and bottoms as well:

chart

Based on the recent patterns, I believe we completed a minor wave 3 from the February bottom at $1424 a little over five weeks ago, and had a shallow period of eight days to complete a wave-four to $1,330. Now, we are in the final fifth wave-up pattern to complete an entire five-wave move from February of 2010. In the near term then, I'm expecting a pretty strong rally from this recent $1365 area to at least $1,480 per ounce, and eventually a good shot at completing the structure at a $1525 range. In the short term, we should begin a wave three up here, followed by a fourth wave correction, and then a final and terminal fifth wave. Below is a multi-month weekly chart view of where I see us heading and where we've been.

chart

Recently, I completed a brief E-book on behavioral-based investing and trading, and it is free for new subscribers to TMTF or ATP services. If you'd like to stay updated on a more frequent basis, you can subscriber or sign up for weekly reports at www.MarketTrendForecast.com.

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