Market Grind - The Gold Bugs win this round

Published: Fri, 08/07/20

By now you know that Fear is not a strategy. At times you have to ignore certain market indicators because the trend is strong. Like the Put/Call ratio on US indices in the last month or the highest Long position in Gold Futures based on the CFTC report during most of the last year. Neither stopped these financial markets from going up on a tear. When it comes to previous metals the bull market started from 1050$ in 2015 Dec, and it is not over. However since that day, calling it a bull market has been faced with skepticism. The chart below was very simple, an ending diagonal ends a trend. It was complicated by the idea that what I call 'W' was considered wave 1 down by many. That was impossible to prove without breaking the rules of Elliott wave analysis. Wave 1 means that the fall is a 5 wave decline and it was not in any way that I understand. For that one reason the street was full of forecasts of 700$ last year backed by wrong analysis of that first leg down.

Now at an all time high I do not want to be sounding Gaga because a correction will happen at some stage. The daily RSI at 89 is not helping the case. But despite that we will remain in a bull market for a few more years in gold.

Today I am sharing with you some of recent posts on Gold and Silver, but also on a few Agro commodities that are of interest. This could drive interest in sugar and coffee stocks as well, especially producers.

I have also included a recent piece on the dollar index that is late in the decline. So fine tuning the moves in the dollar are now harder to do. The easy part of the prediction has already been done, by calling the dollar bear market months in advance. Once we do get a decent relief rally I will be able to be more specific about the next set of moves on the DXY.

Rohit Srivastava

Coffee C Continous [NYSE CSCE]

Ever since the ending diagonal completed in Coffee prices in 2019 I have been waiting for the next wave higher to take off. We have see 2 small rallied that gave up. Now one more is starting so let us see if it breaks past the trendline from the 2011 high at 136 this time. This is a weekly chart.

Silver MCX

Silver MCX prices are consolidating in wave iv that can result in a trianlge pattern. It could take a few days. We have so far done 161.8% of wave 1 on the way up, and if we go higher then the next extention is 261.8% at 77875. The lower end of the range is 61600-60500.

Sugar Continous [NY CSCE]

International Sugar prices are showing strength again and the wave structure shows a 5th wave starting from the recent low. What is important is that we now see a clear 5 wave advance that signals a long term trend reversal. These early days and the move as prices are coming out of a 5 year ending diagonal pattern and will breakout of that pattern above 15.50.

Dollar Index

The dollar index should have complted its bounce in wave i as it came close to the prevoius wave iv high near 93.96. The next move should go back dow below the low of 92.50 in wave v of the structure as the trend down continues.

Gold

After a point of time it is hard to say anything about a security. Gold and Silver are in that moment. As they pace from one level to the next and technical indicators like the RSI appear overbought the only way you can follow this position is by using a trailing level on either the daily swings or hourly momentum cycles. This till you get a trend reversal. On an elliott wave basis wave IV for gold was too small and we are already in wave V. Now V=I and the rising channel are all near or above 2100. So that maybe the final levle where we halt and complete wave 3 up. 3=1 is already surpassed so the minimum is done and the 3rd wave is not shorter than wave 1.

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Rohit Srivastava
www.indiacharts.com
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