Minor wave 4 down

20/05/2010 by Philinje.

Here is an update on the chart from Art, showing the projected top at $1350-ish. It’s worth re-visiting in light of the current decline.

Inverse Head and Shoulders update

Note that minor wave 4 down carries to approximately $1190. This being gold, that could mean $1170, but anyway somewhere in the high $1100’s. This morning the decline that started last Friday after the bump into $1250 got as low as $1175. Prices then bounced up to $1190.

Pretty amazing, eh?

Let’s see if a bottom forms at $1190-ish. The decline has been swift and brutal, as they usually are. The big boys have been working hard to scare the small speculators. Clearly the price action has had no relationship to the dollar, and is hard to rationalize in any way, except when you consider the “normal” manipulation that always occurs.

The Euro and pound have been stabilizing. They are due for a bounce. The rumors didn’t pan out but Germany did implement a ban on short selling some financial assets, which caused a capital flight into Switzerland. The Euro got heavily oversold, which makes Germany kinda happy because of its exports, though the majority of its trading partners are in Europe. The pound did not make it to the ridiculous lows of late 08 but has accumulated a heavy amount of short interest, which will likely make its bounce explosive.

Equities could bounce, too, but it does seem the tide has turned. Be very careful with regular stocks.

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