I think you could be right. Interesting what you said about Federal reserve bank credit , where do you get the data, and how have you backtested? I have been looking for a correction in gold too. It isn't happening so far but let's see next week. Gold is fun to short. The current mood borders on insanity. Everyone says to buy gold.
Federal Reserve Bank Credit: http://www.federalreserve.gov/releases/h41/Current/ It plunged last week which should result in a stock market plunge soon. See http://news.goldseek.com/JoeFRocks/1136760562.php for backtesting. Also, check out the selling in NEM the past week: http://thomson.finance.lycos.com/lycos/iwatch/cgi-bin/iw_ticker?t=NEM&range=7&mgp=0&hdate=&x=10&y=4
Thanks Joe very interesting, so you are bearish on stocks as well ? mainly because of the drop in bank credit? I think you may be right, but maybe you are wrong . Who knows? market could blast in a climax before rolling over in summer
As I said, an Elliot Wave 4 down for the major upcycle since 5-16-05 (for the stocks) is about to begin (there was more upside today) and gold will also have a substantial correction the next few weeks, then I expect a very strong rally/Elliot Wave 5 culminating in long term cycle highs later this year. I'm a Bull but I expect a substantial correction near term. The uptrendlines of the past few weeks broke down on Tuesday for the XAU/HUI, this is rolling over/flattening out action. You have to use cycle trendlines to know what's going on you can't guess it.
I was wondering how effective you have found Elliot Wave to be? I am reading a book about it now and it seems somewhat subjective at times. Do you use any software to help identify the wave count? Thanks.
Elliot Wave is secondary to cycle channels/trendlines, but is very useful because it provides a likely cycle structure. Looking at HUI, NEM, and the XAU's major int term upcycle since 5-16-05, they appear to be putting in Wave 3 right now which, if true, points to a substantial and potentially protracted 3-5 week correction.
Joe, I hate to say this. But I'l love to see you go short gold futures with real money. I would bet it will go higher. Though the charts on the longer term looks a little extended at least in the short run. I would n't short here...
As I said, an Elliot Wave 4 down for the major upcycle since 5-16-05 (for the stocks) is about to begin (there was more upside today) and gold will also have a substantial correction the next few weeks, then I expect a very strong rally/Elliot Wave 5 culminating in long term cycle highs later this year. I'm a Bull but I expect a substantial correction near term. I'd have no problem shorting gold once it establishes a near term downtrend. I'd trade Puts though. I trade XAU Puts/Calls as opposed to gold options, but most of my money is made trading gold/silver stocks long. The unusual strength recently is a sign that an important cycle high is near as is all the bullishness. Human emotion/sentiment is contrarian. The fact that most are so bullish is a very bearish sign near term. Take a good look at the charts and you'll see it's time to correct.