Thursday, February 18, 2010

Gold Update

 
Above is a 4 Hour Chart of Spot Gold (XAU/USD). This was the second possibility I posted over a week ago. I was expecting gold to drop lower initially but since then price has moved above 1125, invalidating my other count. From here I expect gold to move higher to complete and irregular flat. As you can see in the chart above black wave B completed near the 138.20 Fibonacci, which is fairly common. I expect wave C to complete near the end point of wave A at around 1160, however it is possible that wave C will form equal to wave A, forming a truncated flat, and finishing at around 1132.

Below is an hourly of the recent price action. A channel up is clearly present and I have drawn in a possible path the pair may take to complete the move. If you look closely you can see the wave 2 retracement are (in ascending order) shallow (38.2%), deep (>61.8%), and deep (61.8%). Therefore based on the rules of alternation I expect that the wave 4 retracements (in ascending order) will be shallow, very shallow, and then deep.


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