Sentiment Speaks: Gold Is In A Precarious Spot

May 27, 2019 7:45 AM ETGLD, IAU, PHYS, SGOL, UGLDF, UGL, DGP, GLL, GLDI, OUNZ, DZZ, DGL, DGLD, DGZ, BAR, GLDW, GHS, UBG, QGLDX, AAAU, GLDM, IAUF, PHYS:CA69 Comments37 Likes

Summary

  • Gold will likely be much higher in 2020.
  • The question is how much lower does gold have before its next major rally, if any.
  • We are finally setting up again for another major rally attempt.
  • This idea was discussed in more depth with members of my private investing community, The Market Pinball Wizard. Start your free trial today »

My mother told me that if I did not have anything nice to say, I should not say anything at all. Well, that is why you have not heard from me about GLD for quite some time. When I wrote about it last, many were certain it was going to break out again, but I suspected we would continue to consolidate, and we have.

So, there has been nothing for me to really add to the conversation for months, so I have been rather quiet regarding the metals.

There has been no more frustrating chart to track than GLD over the last 3 years. It has had several setups in which it could have broken out and has broken each of them over this period of time. But we are now coming to the apex of the length of time in which it can continue to consolidate before it breaks out.

However, as I write this update, the metals are in a precarious posture. While we correctly called for the recent “bottoming” in the complex, the rally thus far has been quite lackluster. In fact, if it does not follow through to the upside in the coming week, it could easily roll over and drop much more than many currently expect.

So, we are now at a point of inflection. And, I will describe what I am generally seeing through the lens of GLD.

To put it quite simply, a 5-wave structure provides for us a primary trend, whereas a 3-wave structure is suggestive of a corrective structure. And, thus far, GLD only has 3 waves up off last week’s low. If GLD can muster a 5th wave higher in the coming week and pull back correctively thereafter, then we have our first indication of the next bull market phase having begun. And, my minimum next upside target for that structure is the 138 region, and rather quickly.

However, should GLD fail to muster that 5th wave higher and then break below this past week’s low, it points us down to the 113-115 region from where I would then expect it to begin its next major bull phase, also pointing rather quickly towards the 138 region.

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This article was written by

Avi Gilburt profile picture
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Avi Gilburt is founder of ElliottWaveTrader.net, a live trading room and member forum focusing on Elliott Wave market analysis with over 6000 members and almost 1000 money manager clients. Avi emphasizes a comprehensive reading of charts and wave counts that is free of personal bias or predisposition.

Avi is an accountant and a lawyer by training. His education background includes his graduating college with dual accounting and economics majors, and he then passed all four parts of the CPA exam at once right after he graduated college. He then earned his Juris Doctorate in an advanced two and a half year program at the St. John’s School of Law in New York, where he graduated cumlaude, and in the top 5% of his class. He then went onto the NYU School of Law for his masters of law in taxation (LL.M.).

Before retiring from his legal career, Avi was a partner and National Director at a major national firm. During his legal career, he spearheaded a number of acquisition transactions worth hundreds of millions to billions of dollars in value. So, clearly, Mr. Gilburt has a detailed understanding how businesses work and are valued.

Yet, when it came to learning how to accurately analyze the financial markets, Avi had to unlearn everything he learned in economics in order to maintain on the correct side of the market the great majority of the time. In fact, once he came to the realization that economics and geopolitics fail to assist in understanding how the market works, it allowed him to view financial markets from a more accurate perspective.

For those interested in how Avi went from a successful lawyer and accountant to become the founder of Elliottwavetrader.net, his detailed story is linked here.
Since Avi began providing his analysis to the public, he has made some spectacular market calls which has earned him the reputation of being one of the best technical analysts in the world.

As an example of some of his most notable astounding market calls, in July of 2011, he called for the USD to begin a multi-year rally from the 74 region to an ideal target of 103.53. In January of 2017, the DXY struck 103.82 and began a pullback expected by Avi.

As another example of one of his astounding calls, Avi called the top in the gold market during its parabolic phase in 2011, with an ideal target of $1,915. As we all know, gold hit a high of $1,921, and pulled back for over 4 years since that time. The night that gold hit its lows in December of 2015, Avi was telling his subscribers that he was on the phone with his broker buying a large order of physical gold, while he had been accumulating individual miner stocks that month, and had just opened the EWT Miners Portfolio to begin buying individual miners stocks due to his expectation of an impending low in the complex.

One of his most shocking calls in the stock market was his call in 2015 for the S&P500 to rally from the 1800SPX region to the 2600SPX region, whereas it would coincide with a “global melt-up” in many other assets. Moreover, he was banging on the table in November of 2016 that we were about to enter the most powerful phase of the rally to 2600SPX, and he strongly noted that it did not matter who won the 2016 election in the US, despite many believing that the market would “crash” if Trump would win the election. This was indeed a testament to the accuracy of the Fibonacci Pinball method that Avi developed.


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Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

Additional disclosure: While I am net long the complex, I took out a hedge last week using the GLD, and will stop out of it when it proves to have bottomed.

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