Gold Indexes and Ratios
posted Apr 25, 2004 at 03:53PM
Elliot Wave Theory states that triangles precede FINAL moves in major legs...which of course implies significant reversals or retracements.
More conventionally the breakdown of the triangle suggests lower prices (low 170's) will be coming.
Big jumps in explorers usually come at the end of gold bull cycles and that has already occured...another warning sign.
Trend-line support and oversold daily readings may allow for a bounce, but at this stage I would look at this as a short term trading opportunity only...and perhaps for people who got on the gold band-wagon a little late, to really look at thier risk/reward..time horizon parameters.
The ratios suggest that this is not the optimum time to reenter even within the context of a gold bull market.
Trend-line support and oversold daily readings are a basis of going long as well as the ongoing fiasco that is US foreign policy..but caution is necessary....
I remain on sidelines.