A year ago on July 9th I had a post called "Gold...Down for the Count?". In that post I talked about how a Descending Triangle formation had projected a decline for GLD (gold ETF) and that GLD had actually exceeded it. GLD closed at $119.51 the day before that post.
Here we are a year later and GLD has fluctuated up and down and closed Thursday at $127.16 up 6.4% from July 8, 2013.. The end of that move down out of the Descending Triangle had a low of $114.68 June 28, 2013 and was only exceeded by $0.22 on December 31, 2013.
That move was the end of a 3rd wave down. The entire trading activity of the last 12 months looks like a large symmetrical triangle Wave 4. In Elliott Wave principle, triangles are usually in Wave 4 of impulse waves. They also form when each wave within the triangle is 3 waves. That is shown in the chart below.(click to enlarge)Click to enlargeGLD May 2013 to July 2014
So at the moment we appear to be completing that 5th and final wave of the triangle, labelled Wave E. It should not exceed pt. C. I am also looking for it to stay within the channel formed by parallel lines on the chart as shown below. So I am looking for Wave E and thus end of Wave (4) to be approximately $130. But again, it should not exceed C at $133.69(click to enlarge)Click to enlargeGLD July 2007 to July 2014
If this plays out as expected the next major move is a Wave (5) down. I would expect it to be equal to Wave (1) at a minimum. Wave (1) was $30.0 in length so the projection is for GLD to hit $100.00. As the move gets underway I will be better able to evaluate the wave structure of Wave (5).
So does $100 look like a likely end point? When you pull back and look at the chart you can see that previous support came in at $102.28 and resistance occurred at $97.50 and $100.44 so I am identifying a support zone of $97.50 to $102.28. But first we need the breakdown from the triangle.In Focus Today
Today's video combines a review of market action from last week and trade ideas. I review trade ideas that were exited in CREE and QIHU. Three trade ideas we are still in with CTRP, MPEL and YOKU. And two new trade ideas on FB and FSLR. We are also closely watching CTXS, DATA and WFM.