Gold: We came in early, so just follow the trend

Wave .1 is from 1308.45 to 1445.05 and $136.6 in length. And Wave .3 started from $1381.25. So now, the length of Wave .3 has reached the length of .1. Elliott wave defines Wave 3 of an impulse wave not to be shortest among Wave 1, 3, and 5. Elliott wave suggests Wave 3 to be often the longest, and it also suggests the length of Wave 3 in price often reaches 1.618 times Wave 1. If I assume all above, the target for Wave .3 is $1600 level. As the gold making record highs everyday, some people may start worrying and take profits. But more people may start jumping into gold buying thinking that $1500 is the new standard.

I do not know what will happen, but all I know is I entered the market early enough (average entry point of $1450) to lock my break even point, and just follow the trend until either reaches my target ($1600) or it gives the sigh of reversal.

Mid term Elliott waves for gold, EURUSD, AUDUSD, and AUDJPY

I was traveling for a couple of weeks, and I have not updated my quarterly result at the end of March. In Q1, I only traded once and it was negative 2.32%.

I’m currently long gold as I’ve been  tweeting. I’m still recovering from the jet lag, and I just show the weekly charts here:

Changing my view to gold

My 1st bet of this year to be short of EURUSD was a loser bet. The situation of Middle East hasn’t eased at all, but USD is not responding as the safe haven as much as I anticipated, or should I say the expectation to rate hike in Euro zone surpassed the fear of European sovereign crisis…at least for now?  Anyways, I think I take a break from being short of EURUSD. But I will come back on this for sure in the future not so long from now. (In the mid to long term, I’m still Euro bearish.)

For a long time, I kept saying the gold’s rally is over for the mid term. It looks now the QE2.0′s effect is dragging dollar, now with rising soft commodity prices and oil price. The combination of the popular uprising from North Africa to Middle East and dilution of USD seem to push the money into stuff like oil, gold and silver. The commodity prices often experience climax spike towards the end of the bull market, and the current price action on oil, gold, and silver may not be the exception.

Along with this possible scenario, I updated my Elliott wave count as follows. The 1st chart is weekly.

The second is the daily chart. I can count the current uptrend as an impulse wave towards .1. If I see a zigzag wave down coming close to 1364. next, I will get ready to buy gold. I’m not sure how high the gold will spike, but going over$1650 may be possible.

Real time trading tweets

The plan in the article may get rejected any time, so please check out my tweets on Twitter.

Current risk exposure:

"","","","","$29,058.30","","","","","","","","","","","","","","","","","","","","41.95%","","","2.00%","","","","","","","","","","","","","","","","","","","","","","","","","","","",""
Rational Move always use stop loss orders, and this is the worse case potential loss over the capital for the currently open positions. This is unrealized loss is less or equal to the risk exposure.

Capital growth

From recent 100 trades (%) The growth right before the 1st trade is set to 0%.
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Drawdowns

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Total returns

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(Aug 10, 2009)
Year-to-date Quarter-to-date
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This is a normalized value: the return on each trade is normalized against the capital just before the trade execution. This way, it is eliminating the effect by the capital change from deposits and withdrawals. The calculation thus reflects the trading performance of each trade. The value does not contain unrealized profits and losses. RM's trading strategy never risks more than 5% of the present capital. Not including subtraction by tax.

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