GLD, Gold update and K, Kinross

GLD jul 2012

We have seen some very incorrect wave counts that would suggest the GLD is presently in a one year long contracting triangle as opposed to some form of a 1-2,1-2. Assuming, for the sake of argument that this is acceptable count,  the above labelling would be the most plausible. This would have to be a 4th wave and, given the duration, probable one of high degree. A thrust should follow soon and swiftly take the GLD to just above the old high of 192 or to a new high of 225 or so. An almost immediate return to 150 would follow.

The problem with this count is that it has no counterpart anywhere! Not a single large cap gold miner has a pattern that comes close. Nor does that other precious metal silver which already has retraced 50% from the recent peak. K, Kinross is a good example even if some would cry foul given this stock idiosyncratic problems. Here is the chart;

K jul 2012

No count is ever certain but as more pieces fall in place confidence in the accuracy increases. So this stock drops from $45 to $1 in what has to be a 5-wave move! This is confirmed by the wedge or wedges that are always 5 waves (or Cs). 5-wave moves do not stand alone, there always has to be a second one (as in a flat or zig-zag). In between there is invariable a 3 –wave counter-trend rebound that often retraces 50, 62 or even more % of the preceding drop. There is also a tendency to go to the level of either the 4th wave or the 4th wave of 3. It more or less did all of this! Therefore it is safe to assume that we are in the second 5-wave leg down which should terminate <$1. At about $10 we will get overlap. Should this second 5 wave leg develop as a wedge, that will not matter. In the event that we are actually in a double zig-zag (in blue) overlap at this time would also not matter. Given that this stock is already down some 75% or more, the outlook on GLD shown above is downright impossible, but then impossible things seem to happen more often lately..