Monday, December 26, 2016

$XAUUSD/$PX

It appears that $XAUUSD has found its bottom for Wave 2 @ 1221. In Elliott Wave Principle, one of the three rules is that Wave 2 will never retrace Wave 1 100%. This would mean that the bears' expectation that gold would go below the December 2015 low @ 1047 is bound to be disappointed.

I see gold now resuming its bull rally...


As for $PX, it went far advance than gold's price movement. It even refused to correct big as the gold mining stocks' benchmarks in the US such as the $GLD, $GDX, and $HUI.

$PX has already reached Wave 3 and it appears that it has already broken out from Wave 4 corrective triangle. Despite its current price movement, I am anticipating $PX to return to its uptrend channel and to continue Wave 5.


The foregoing analysis is based on the assumption that $PX leads $XAUUSD.

However, if the situation is the exact opposite, gold leading mining stocks, then we have a more bullish interpretation.

This chart provides such a more bullish perspective...



$PX has just been flexing its muscles for the last 12 months to prepare for a massive run. Both the Wave 1 run in January and the Wave 3 run in June were just sub-waves of primary Wave 1.

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