Gold Stocks (XAU) Attack Multi-Year Downside Targets; New Advance – into 2021 – Could Follow!
Gold Stocks (XAU) Attack Multi-Year Downside Targets; New Advance – into 2021 – Could Follow!
09/18/18 The Bridge – Metals & Miners: What’s Ahead?: “The ‘c’ Wave Decline
With Palladium & Copper precisely fulfilling downside price targets, retracement levels, wave objectives and monthly cycles, it provided a critical foundation for other metals to begin their bottoming phases.
Similar to the roller-coaster analogy for a topping phase in different market complexes, market bottoms are also often set in sequential manner.
And it is not until the final (weakest) member signals a bottom that the entire complex is liberated to enter a more convincing advance. (The inverse is what took place with Gold in May/June.)
The Gold/Silver Index (XAU) is one component that often tops early (2010) and bottoms late (2016). So, it is not surprising that it has spiked to new lows in early-Sept. 2018. That has also allowed it to come within ~1.5 points of its multi-year, 54 – 59.00/XAU downside price target – the ideal range for a bottom.
As described in late-2016 & early-2017, and repeatedly since then, the monthly trend was the prevailing factor that continually projected a drop below the Dec. 16 bottom as part of an overall correction. So, this index has remained in a much weaker structure.
That is in contrast to Gold, which is still expected to bottom above the level of its Dec. 2016 bottom. Once again, it is price action – and crucial technical filters – that hone the cyclic outlook.
In the case of the XAU, the rally into Aug. 2016 is perceived to be the ’A’ wave of a larger-magnitude ’A-B-C’ corrective advance (that could last into 2020).
The subsequent decline – into Dec. ’16 – had to be the ’a’ wave of a smaller-degree ’a-b-c’ decline (that would ultimately comprise the ’B’ wave pullback) since the monthly trend projected a subsequent drop to new lows (below the Dec. ’16 low).
IF this is the correct wave interpretation (multiple indicators will need to corroborate that), then the Gold/Silver Index could enter a new advance in 4Q 2018 (the onset of the ‘C’ wave rally) – one that is capable of lasting into late-2020/early-2021 and being related to the initial ’A’ wave advance of Jan. – Aug. 2016 (rally = rally?).”
Precious Metals reinforcing time for a sequence of 1 – 2 year lows in Aug. – Nov. 2018. Gold & Palladium provided the first bottoms in Aug. ’18 (with Gold fulfilling its ~27-week cycle and holding pivotal support) and ushered in this transition period. After Nov. ’18, it should trigger a bullish period in precious metals – leading into late-Feb./early-Mar. ’19 (the next phase of Gold’s 27 – 29 week & 55 – 59 week cycles).
Gold stocks (XAU) are now following suit and preparing for a similar major bottom as they attack 1 – 2 year downside price targets and fulfill monthly & weekly cycle lows. That is setting the stage for a major advance that could last into late-2020/early-2021. See Weekly Re-Lay & INSIIDE Track for additional analysis and/or trading strategies.