Upwards movement continues as the new main wave count expects.
Trading advice given in last analysis favoured the bullish scenario. Members who opened a hedge or long positions should have profits.
A pullback was expected to move price lower to about 16, but this is not what happened. Price has moved higher.
An upwards day has not made a new high and has closed just below the trend line. Classic analysis supports the alternate wave count.
Another red daily candlestick has printed as expected, but price continues to move sideways and not lower.
The choice of what scale to use on your charts makes a big difference to how trend lines sit. Which scale is correct?
The chart above shows Gold 2 weekly on an arithmetic scale. Notice the bear market trend line has been breached, but did not show where price exactly found support and resistance in the process.
The chart above shows Gold 2 weekly on a semi-logarithmic scale. So far price remains below the bear market trend line.
An arithmetic scale is best used for short term price movements. But for long term movements a semi-logarithmic scale is more correct, particularly for markets like Gold which can exhibit blow off tops and selling climaxes.
Any long term movement a year or more should always use a semi-logarithmic or ratio scale.
From Magee (“Technical Analysis of Stock Trends”, 9th edition, page 11):
“Our own experience indicates that the semilogarithmic scale has definite advantages in this work; most of the charts reproduced in this book employ it… Percentage relations, it goes without saying, are important in trading in securities… certain trend lines develop more advantageously on the ratio scale.”
From Pring (“Technical Analysis Explained”, 4th edition, page 68):
“Arithmetic scaling is not a good choice for long-term price movements, since a rise from 2 to 4 represents a doubling of the price, whereas a rise from 20 to 22 represents only a 10 percent increase… For this reason long term price movements should be plotted on a ratio or logarithmic scale. The choice of scale does not materially affect daily charts, in which price movements are relatively small in a proportionate sense. For periods over 1 year, in which the fluctuations are much larger, I always prefer to use a ratio scale”.
Published @ 04:28 p.m. EST.
Price has reacted strongly downwards after moving slightly higher to perfectly touch the long term bear market trend line, which was expected. A red daily candlestick was printed as expected.
Last week’s analysis expected more downwards movement.
Upwards movement was expected to continue to a target at 1,317. Price has reached 5.03 above the target.
An outside day on Friday finally saw some volatility return to the market. While the short term structure on the hourly Elliott wave count is changed, the expectation for the short term remains the same.
Another small range inside day suggests a small Pennant may be forming. A new Elliott wave count sees a possible triangle completing.
Upwards movement was expected last week for Silver. Price has moved sideways, with a slightly higher high.
Upwards movement for Wednesday’s session has unfolded as expected from both the main and alternate Elliott wave counts.