Stocks and Gold Update - 11/11/09

Gold/GLD

On Monday GLD hit 108.59, which verified the current wave is part of a larger wave three instead of a wave five about to complete, as discussed in Sunday's post. That is bullish with the next price target being around 112.75. Todays close of 109.61 is already more than one point above the 108.59 level with more then three points to go to reach the next target.

As for wave structure, it looks like it is in wave five of the move up from the 10/28 low. Based on that count and cycles analysis, the next price target could be reached sometime between Friday and early next week.

Stocks

Stocks are moving higher with gold and may top in the same time frame. Today stocks went past the 1093 resistance and also the October high indicating the next swing cycle on 11/14 is inverting into a high instead of a low. The wave structure is not as clear as gold but may now be in wave four up from the 11/2 low, to be followed by the final wave five. The 1.27 fibonacci extension of 1121.05 appears to be the most likely price target for wave five.

Also, since the October high was taken out, that may change the preferred wave count. That analysis will be provided in the next post.

Stocks and Gold Update - 11/8/09

Stocks

The s&p500 made a low on Monday at 1029.38, .62 points below the 1030 support level given last Sunday. Stocks then continued higher into the end of the week as forecast with the high of the week occurring on Friday morning. Cyclically, that high could have been the top of this short term up move however the wave structure does not look complete and also the s&p500 is in between resistance zones. We are also currently withing the next swing cycle zone(11/6 to 11/9) so it could go up for 1-2 more days into the next resistance zone at 1074 to 1077, which is not much beyond Friday's high. Next resistance is at 1085 and then 1093.

Gold/GLD

Gold had another good week, moving well beyond the October high and the target price of 105.5. Wave four ended on 10/28 with wave five either complete as of Friday or near complete. GLD is within a swing cycle zone that ends today but could allow one more day of higher prices since it occurs on a weekend. Initial support for a wave two low is 100 to 101 on GLD.

One thing to watch is the length of wave five. If it extends beyond 108.58 on GLD that would make wave three shorter than wave five and wave one, which invalidates the wave count as wave three can never be the shortest wave within a five wave impulse. If that happens it indicates we are within a larger wave three that would bring much higher prices sooner rather then later.

As has been stated previously, the long term gold chart patterns look very bullish and could bring much higher prices. For that reason it is best to do minimal amounts of profit taking at short term tops as the wave counts could be wrong and surprises will tend to be to the upside.