Gold Fulfills 4-Shadow Signal in Time

October 15, 2015 Eric S. Hadik

Gold Fulfills 4-Shadow Signal in Time;

Price Objective Not Yet Met…

Setting Stage for 2016 – The Golden Year.

10/15/15 Weekly Re-Lay: “As Gold & Silver progressively fulfill expectations for October – and for the overall (initial) advance from Gold’s late-July cycle bottom – they are steadily increasing the potential to reach critical upside targets… that would trigger longer-term signals.

This was the topic of the Sept. 16^th Weekly Re-Lay Alert, a portion of which is reprinted to lay the foundation for this update:

“Gold, Silver & the XAU were expected to complete their pullbacks on Sept. 11^th…and then see a rally into ~Sept. 24^th…The action of Sept. 1^st–15^th, however, is increasing the possibility that there will be more (to the upside) in the near future.

And, there are multiple reasons for this – some of which involve current indicators & cycles and others that involve the potential for future corroboration…the potential for a larger-degree `4-Shadow’ signal in Gold and/or Silver…There are several reasons why it is possible in this time frame.

However, the more significant aspect is what it would mean for 2016 – and how it would corroborate the overall outlook – IF it did transpire now…To put it concisely, a 4-Shadow signal is generated when the correction in a market (a move in the opposite direction of the larger-degree trend) is larger – in time and/or price – than the most recent corrections…

In the case of Silver, it has seen reactive bounces (corrections against the ~4-year downtrend) in Dec./Jan. ’15, Mar.–May ’15 and then late-July–late-Aug. ’15… each of which was of diminishing magnitude. In other words, Silver has generated progressively smaller (upside) corrections since turning back down in July/Aug. 2014. That is normal action in an evolving downtrend.

If/when a rally exceeds the magnitude (and/or time) of the preceding one, that would be a sign of developing strength… even though one final drop to new lows could be seen before a sustained advance takes hold. (For more on this, refer to Eric Hadik’s Tech Tip Reference Library.)

In the case of Gold, its recent rally slightly exceeded the magnitude of its March–May ’15 bounce…However, I am more focused on the next larger-degree 4-Shadow potential for Gold…

Gold experienced sharp bounces – though each was of slightly lesser magnitude than the one before – in June–Aug. 2013, Dec. ’13–Mar. ’14 and Nov. ’14–Jan. ’15. So, in order to trigger a larger-degree 4-Shadow signal, Gold would have to exceed the magnitude and/or time of its Nov. ’14–Jan. ’15 rally.

That lays the groundwork for this discussion…

In order to validate this potential, the current rebound/rally in Gold should be greater than 11 weeks & 174.5 pts. (the extent of the Nov. ’14–Jan. ’15 rally). If so, Gold should rally into at least Oct. 12–16^th (12 weeks) and above 1248.2/GCZ.

And that begs the more important question: “Are there other reasons to expect Gold to extend this rally into the second half of October?”

In this case, the answer is yes. There are as many – or more – intermediate cycles & wave projection tools that converge around Oct. 23/26^th, as there are cycles that converge around Sept. 24^th. And, if Sept. 24^th does time a peak, it would add a ~30-degree low-high-high (Sept. 24^th) -(high) Cycle Progression to the cycles aligning around Oct. 23/26^th.

So, Gold could fulfill both expectations – for a new surge into Sept. 24^th AND for a continued advance (after an intervening pullback or consolidation) intoOct. 23/26^th. Among the reasons for this are:

— Gold declined for a geometric 6 months/180-degrees, from Jan. 22^nd into July 24^th. A 50% rebound (in time) projects a rally into Oct. 23/26^th.

— Adding more geometric significance, a ~60-degree high-high, from Aug. 24–Oct. 23/26^th.

— A 90-degree rally, from July 24—Oct. 23/26^th.

— As just surmised, a geometric, ~30-degree low-high-high (Sept. 24^th)–high (Oct. 23/26^th) Cycle Progression.

— A 7-week low-low-low (Sept. 8–11^th)–high (Oct. 26–30) Cycle Progression.

— Comparable 13-week rallies (mid-Dec. ’13–mid-Mar. ’14 & July 24—Oct. 23, 2015).

There are more reasons for this possibility… and slowly-developing clarity on what to expect between now and Jan. 2016…”

So, from a timing perspective, Gold needed to extend this rally into at least Oct. 12–16^th – lasting a minimum of 12 weeks (exceeding the 11-week duration of the previous advance). With yesterday’s new highs – for this rally from July 24^th – Gold has met this minimum objective for a timing4–Shadow signal.

However, I am far more concerned with price generating a corresponding 4–Shadow signal.”

See Oct. 15, 2015 Weekly Re-Lay Alert for additional details on this potential 4-Shadow signal and what it would mean for Gold – both now AND inearly-2016. This is a lagging/confirming indicator that provides more important expectations for the future… after an intervening decline.

At the risk of sounding like a broken record, this is perfectly setting the stage for 2016 to be The Golden Year… when Gold is able to provide the largest advance in several years (as a precursor to even more bullish potential in the years that follow).

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