Correction - $1168.70

The correction here refers to an error. Previously, Ron Rosen calculated a pontential high of wave B in gold at $1120. He has now corrected that to be $1168.70.

The reason is that Elliott Wave rules talk about an Extended Flat correction usually resulting in wave B being 1.382 times wave A. I guess his earlier calculation did not use the 1.382 factor.

The wave B at the end of 1974 was 1.382 times wave A. Here are the numbers:

1974

Wave A - $134, down from $179.50

Wave B - $197.50, and 1.382 x wave A = $196.88

2009

Wave A - $681, down from $1033.90

Wave B - 1.382 x wave A = $1168.70

The high this week was $1153.40. But there is some chance of a turning point top on Nov 24 and gold did not decline much by end of week, ending at $1151 after a brief dip to $1130. We could see gold in the vicinity of $1160 next week.

And of course it could go higher before a correction starts. If the wave B and Extended Flat theory holds, gold will then not see another higher high until after the wave C low, July to Nov next year. But if this theory is not valid, then gold might see a mild correction and keep heading higher. Regardless, the cycles of Martin Armstrong project a major low next Oct.

So, a wave B top could be in the vicinity of $1160-70. But otherwise gold could head to $1250 - $1350 in March-April after a mild correction and then another correction could result in a major low next Oct. The reason $1250-$1350 is talked about a lot is that is the projected completion of the inverse Head and Shoulders pattern that is so visible on the gold chart.

Most people see it as an inverse Head and Shoulders, but Ron Rosen sees it as part of an Extended Flat correction. Time will tell. In a sense, Rosen’s forecast is more optimistic, because after the low in 1976, gold shot up to its historic high at $850 in early 1980. But this time the wave C low will be below $681, because wave C ends below wave A.

Yes, it is possible that gold hits $1250 AND the wave C occurs afterward, but in that scenario it is more likely that gold will correct mildly and consolidate until next Oct. Rosen is almost alone in his forecast of a wave C, but he presents compelling evidence and reasoning, and he is an ardent gold bull with many years of experience.

We will see what happens after a near-term correction and then the following high. If that high goes higher than the current high, the wave C scenario starts looking unlikely. For now, it’s a possibility like all the others.

This entry was posted on 21/11/2009 at 05:06 pm and is filed under Gold. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response or trackback from your own site.

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