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Tristan de Gouvion Saint Cyr on Identifying Actionable Opportunities.
Tristan de Gouvion Saint Cyr on Identifying Actionable Opportunities.
Tristan de Gouvion Saint Cyr on Identifying Actionable Opportunities.
Tristan de Gouvion Saint Cyr on Identifying Actionable Opportunities.
Tristan de Gouvion Saint Cyr on Identifying Actionable Opportunities.
Tristan de Gouvion Saint Cyr on Identifying Actionable Opportunities.
Tristan de Gouvion Saint Cyr on Identifying Actionable Opportunities.
Tristan de Gouvion Saint Cyr on Identifying Actionable Opportunities.
Tristan de Gouvion Saint Cyr on Identifying Actionable Opportunities.
Tristan de Gouvion Saint Cyr on Identifying Actionable Opportunities.
Tristan de Gouvion Saint Cyr on Identifying Actionable Opportunities.
Tristan de Gouvion Saint Cyr on Identifying Actionable Opportunities.
Tristan de Gouvion Saint Cyr on Identifying Actionable Opportunities.
Tristan de Gouvion Saint Cyr on Identifying Actionable Opportunities.
Tristan de Gouvion Saint Cyr on Identifying Actionable Opportunities.
Tristan de Gouvion Saint Cyr on Identifying Actionable Opportunities.
Tristan de Gouvion Saint Cyr on Identifying Actionable Opportunities.
Tristan de Gouvion Saint Cyr on Identifying Actionable Opportunities.
Tristan de Gouvion Saint Cyr on Identifying Actionable Opportunities.
Tristan de Gouvion Saint Cyr on Identifying Actionable Opportunities.
Tristan de Gouvion Saint Cyr on Identifying Actionable Opportunities.
Tristan de Gouvion Saint Cyr on Identifying Actionable Opportunities.
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Tristan de Gouvion Saint Cyr on Identifying Actionable Opportunities.

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Tristan de Gouvion Saint Cyr investment management expert. Tristan de Gouvion Saint Cyr shares his views on Identifying Actionable Opportunities.

Tristan de Gouvion Saint Cyr investment management expert. Tristan de Gouvion Saint Cyr shares his views on Identifying Actionable Opportunities.

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  • 1. GOLD SILVER & How the Wave Principle Can Help You to Identify Actionable Opportunities
  • 2. Gold & Silver — How the Wave Principle Can Help Youto Identify Actionable OpportunitiesIntroductionWhile the mainstream media was busy reporting the fundamental reasons that gold and silver would continuetheir incessant climb, the market action in December 2010 in both markets demonstrated a textbook Elliottwave structure — a contracting triangle. This structure allowed our Metals Specialty Service to forecast thesubsequent moves — a “thrust” out of the triangle that was followed by a swift drop in price.A triangle provides one of the clearest outlooks of any Elliott wave pattern, and it offers traders specific,actionable opportunities. This report presents a chapter from EWI’s upcoming eBook, How to Trade Trianglesand the Thrust that Follows, by EWI Senior Tutorial Instructor Wayne Gorman. He will take you through areal-world example of the triangle and show you how you can take advantage of this classic pattern. We’vealso included a handful of EWI’s daily articles to give you the inside scoop about how the Metals SpecialtyService forecast these moves.Section 1 — Trading Scenarios – Impulse Waves. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Excerpted from How to Trade Triangles and the Thrust that Follows by Wayne Gorman, EWI Senior Tutorial InstructorSection 2 — Triangle / Thrust in Silver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 I’m Beginning To See A Pattern HereSection 3 — Triangle / Thrust and Subsequent Move in Gold . . . . . . . . . . . . . . . . . . . . . . . . . 20 Thar’s Gold In Them Thar Charts!Learn more and put the power of the Wave Principle to work for your portfolio. Go to: http://www.elliottwave.com/wave/MetalsSS.To return to Club EWI for more free resources, go to: www.elliottwave.com/clublibrary© 2011 Elliott Wave International — www.elliottwave.com 2
  • 3. Section 1 — Excerpt from How to Trade Triangles and the Thrust that FollowsHow to Trade Triangles and the Thrust that Follows — Chapter 2Trading Scenarios — Impulse WavesLet’s begin the section with trading scenarios within impulse waves. In the trading sections, I assume that youunderstand Elliott’s rules and guidelines. If you need to review those, please go to our website where we haveeducational materials that can help you.Figure 2-1This is a weekly bar chart of COMEXcash gold, pit session only. We’regoing to look at a trading example withtriangles in this market back in 2001to 2002.Figure 2-2As you can see, I’ve identified anIntermediate wave (1) and Intermediatewave (2) followed by Minor waves 1,2, and 3.In 2001, gold saw a double bottomon the nearest futures contract at 255,although it was not seen in the daysession in cash. I want to focus on theimpulse wave following Intermediatewave (2) in blue. We already havewaves 1, 2, and 3, and we’re going tostart trading in that fourth wave after thetermination point of wave 3.Let’s think about some of the pointsthat can guide us in taking a position.First, we know that fourth waves oftenare triangles in an impulse wave. Next,see if wave two makes a sharp pullback,which it does. We know from Elliott’sguideline of alternation that if wavetwo is sharp, then wave four will mostlikely be sideways. So we have twogood reasons to expect wave four to be atriangle, and that’s how we’ll approachour trade.Learn more about the independent analysis in the Financial Forecast Service. Go to: http://www.elliottwave.com/wave/FinancialForecastService.To return to Club EWI for more free resources, go to: www.elliottwave.com/clublibrary© 2011 Elliott Wave International — www.elliottwave.com 3
  • 4. Section 1 — Excerpt from How to Trade Triangles and the Thrust that FollowsWe want to establish entry points, stop levels, and target levels so that we can pinpoint our potential riskand our potential reward. I’ll just refer to them as risk and reward, but keep in mind that we’re talking aboutpotential risk and potential reward.Let’s look at some other guidelines and factors as we anticipate the first move off of this top in wave 3. We’llbe looking for an A wave to the downside, and that A wave will represent the first wave within the triangle.Figure 2-3In order to establish target price levels,we can use Fibonacci analysis and lookat the retracements. I’ve calculatedvarious retracement levels for wave4 — .382, .5, and .618. It’s commonfor wave four to retrace .382 of wavethree, so we’re going to focus on the306–307 level with some potential togo lower to the 50% retracement around300. So, to establish our target price,we’ll look at a Fibonacci retracementfor wave 4, which is somewhere in the307–300 range.Figure 2-4What else can we look at? We candraw in a trend channel, connecting thetermination points of waves 1 and 3 andthen drawing a parallel line that includesthe termination point of wave 2. Thebottom trendline of this channel offersanother guide for the termination pointof the A wave within wave 4. It also isclose to our Fibonacci retracement areaaround 307 to 300.Learn more and put the power of the Wave Principle to work for your portfolio. Go to: http://www.elliottwave.com/wave/MetalsSS.To return to Club EWI for more free resources, go to: www.elliottwave.com/clublibrary© 2011 Elliott Wave International — www.elliottwave.com 4
  • 5. Section 1 — Excerpt from How to Trade Triangles and the Thrust that FollowsFigure 2-5What else can we look at? Elliott’sguidelines also say that the fourth wavewill usually terminate in the area ofthe previous fourth wave of one lesserdegree. If you look at the chart, you cansee that there are five waves up withinMinor wave 3, so we can look for theprevious fourth wave of one lesser de-gree — wave 9. This gives us anothertarget. It’s a bit lower than what thechannel and the Fibonacci retracementsare showing, but it’s another piece ofinformation.In wave 0 of wave 3, you’ll notice thatwe have an extension — a fifth-waveextension. When wave five extends,wave four often will retrace to wave two of the extension, because the extension actually began somewhere inthe vicinity of wave two. That’s where wave five normally would have ended, but instead it began to extend.Figure 2-6Let’s take a position. We’ll assume thatwe were able to go short after wave 3had peaked in the 322–325 area. So,we’ll assume that we went short at 324.We’ll set a stop slightly above the peakof wave 3 at about 329, and we’ll useour Fibonacci retracement informationto set a target price in the vicinity of305. Our risk is $5 per contract, and ourreward is $19 per contract.Learn more about the independent analysis in the Financial Forecast Service. Go to: http://www.elliottwave.com/wave/FinancialForecastService.To return to Club EWI for more free resources, go to: www.elliottwave.com/clublibrary© 2011 Elliott Wave International — www.elliottwave.com 5
  • 6. Section 1 — Excerpt from How to Trade Triangles and the Thrust that FollowsFigure 2-7We’ve moved forward and we can seethat prices have come down to the areawe were expecting, within that 300–307range. So far the low is around 302. Dowe get out here and take a profit? Well,let’s look at some of the guidelines thathelped us to set our target prices.Figure 2-8First, look at the Fibonacci retrace-ments and see where prices are. At 302,they’ve gone a little bit past the .382 —between the .382 and .50 retracement.Learn more and put the power of the Wave Principle to work for your portfolio. Go to: http://www.elliottwave.com/wave/MetalsSS.To return to Club EWI for more free resources, go to: www.elliottwave.com/clublibrary© 2011 Elliott Wave International — www.elliottwave.com 6
  • 7. Section 1 — Excerpt from How to Trade Triangles and the Thrust that FollowsFigure 2-9Prices are right on the channel line.We also have come into that area ofthe previous fourth wave of one lesserdegree, and we’ve gone a little bit pastwhere the extension started. This lookslike a good level to get out. So, let’sbuy at this level. Let’s say we get outat 303 (assuming that we get a goodfill). Therefore, we went short at 324and we closed out at 303 for a profit of$21 per contract.Now we want to go long and trade forthe b wave of the triangle. With theguideline of alternation in mind, if wedon’t get a triangle we should at leasthave a flat correction, meaning that the b wave of a flat should go all the way back to the origin of the awave. In any case, whether this unfolds as a triangle or a flat, we have a lot of evidence to support a majormove up from here. Using our channel line as support for a b wave to the upside, and given that we’ll assumethat this is a triangle, we’ll go long at 303 with a stop slightly below the low of the a wave at 300. Our riskis $3 per contract.Our target price is up in the mid-320s. We know that if it’s a triangle, the b wave should not go above thetermination point of wave 3, which is at about 328, unless it’s going to be a running triangle. But we won’tassume that right now; instead we’ll assume a contracting triangle, until the price action tells us otherwise.So, we’ll set a target at about 325, slightly below the top of wave 3 (the origin of wave a). Our risk is $3 percontract, and our reward is $22 per contract.Figure 2-10Now we start to see a move to theupside. Do we get out here and takea profit? No. We have the semblanceof a zigzag unfolding in wave b; it’shugging our channel line and it is pro-ceeding into that area where we expectto take profit.Learn more about the independent analysis in the Financial Forecast Service. Go to: http://www.elliottwave.com/wave/FinancialForecastService.To return to Club EWI for more free resources, go to: www.elliottwave.com/clublibrary© 2011 Elliott Wave International — www.elliottwave.com 7
  • 8. Section 1 — Excerpt from How to Trade Triangles and the Thrust that FollowsFigure 2-11This could be the top of wave b, sowe’ll take a profit here, let’s say at about324. We went long at 303, so that givesus a profit of $21 per contract. Becausewe’re very close to that 328 level atthe top of wave 3, we will assume thatwe’ve seen the top of wave b or we’reclose, so we will go short here at 324with a stop slightly above 328, justbeyond where we believe the b wavehas ended. But to be really safe, we canafford to set it above the top of wave 3at 329, and we’ll play the c wave tothe downside.What can we use for our target for thec wave? We have the channel line in place to give us a cluster of points at around 311–312 for wave c. Wealso have the guideline that wave c could be .618 of the length of wave a. The length of wave a is about$26 times .618, which gives us a distance of $16. The top of wave c comes in at 325. So, $16 off of 325 givesus a target around 309. However, you can see that 309 falls well below the channel line. Thus our best targetprice for wave c in this short position is still in the 311–312 area.We’re short at 324 with a stop at 329 and a target price of 311. Therefore, our risk is $5 per contract, and ourreward is $13 per contract.Figure 2-12Looking forward, we see that pricesdid come down to a little below thechannel line. They came down to 310,popped up to about 311–312, so we willbuy back here because it’s in the areaof the channel line, and it is also equalto approximately .618 times the lengthof wave a. Now you can see the con-traction taking place. We will close outour position here at about 311. Sincewe sold at 324, that results in a profitof $13 per contract and we will look togo long and trade for the d wave tothe upside.We’re long at 311, and we will set ourstop slightly below where we believethe end of the c wave is at about 309.Learn more and put the power of the Wave Principle to work for your portfolio. Go to: http://www.elliottwave.com/wave/MetalsSS.To return to Club EWI for more free resources, go to: www.elliottwave.com/clublibrary© 2011 Elliott Wave International — www.elliottwave.com 8
  • 9. Section 1 — Excerpt from How to Trade Triangles and the Thrust that FollowsWhat would be our target for the d wave? The d wave may be equal to .618 the length of the b wave, andit should not exceed the top of the b wave at 325. The length of wave b is about $23, which we’ll multiplyby .618 to give us $14. We expect the length of the d wave to be approximately $14.If we add $14 to the bottom of wave c at 310, we get a target of 324. We also know that the top of the b waveis 325. So, if we get close to 324, we’ll sell our long position and take profit on that d wave.We’re long at 311 with a stop at 309 and a target price of 324. So, our risk is $2 per contract, and our rewardis $13 per contract.Figure 2-13We have come up to about 324; we’revery close to the top of that b wave.If we take out that top, then our countis off. We’re going to take profit hereat the 320 level and start to think aboutpositioning for the end of the triangle,the e wave.Now let’s assess our next tradingposition. We’re looking for thetermination of this triangle, so let’sgather some more information.Figure 2-14I have connected the terminationpoints of a and c to draw inmy A-C trendline, which tells meapproximately where the e waveshould terminate — at about 316.Learn more about the independent analysis in the Financial Forecast Service. Go to: http://www.elliottwave.com/wave/FinancialForecastService.To return to Club EWI for more free resources, go to: www.elliottwave.com/clublibrary© 2011 Elliott Wave International — www.elliottwave.com 9
  • 10. Section 1 — Excerpt from How to Trade Triangles and the Thrust that FollowsFigure 2-15I’ve established the end of the d wave,so now I can connect the termina-tion points of b and d and draw atrendline there. Now I have both of thetrendlines for the triangle, setting theboundaries for the triangle and givingme a better idea of where the e wavewill terminate.Here’s another thing we can do. The ewave may be equal to .618 the length ofc. The length of the c wave was $14,which, when multiplied by .618, givesus $8.80 for the approximate length ofwave e. The top of wave d is 324, soif I subtract about $9 the level is about315, which coincides with the bottomof the A-C trendline. So, I have a number of pieces of evidence to tell me that the e wave should end at about315. But, as you know, it could either undershoot or overshoot the A-C trendline.Figure 2-16As you can see, prices did hit the A-Ctrendline at about 315 — the exactlevel was 316 — and then they startedto thrust out of the triangle. They havenow gone above the B-D trendline.We assume that this triangle hasterminated and so we’ll go long at thebeginning of wave 5, at about 326. Weset our stop level slightly below the B-Dtrendline at about 322. Now we must setour target price for this long position.Learn more and put the power of the Wave Principle to work for your portfolio. Go to: http://www.elliottwave.com/wave/MetalsSS.To return to Club EWI for more free resources, go to: www.elliottwave.com/clublibrary© 2011 Elliott Wave International — www.elliottwave.com 10
  • 11. Section 1 — Excerpt from How to Trade Triangles and the Thrust that FollowsFigure 2-17We add our channel lines and see thatin wave e of this triangle we actuallyhad a throw-under with respect to thechannel. An Elliott wave guidelinetells us that when prices go below thechannel (throw-under) you shouldexpect the fifth wave to go above theupper trendline of the channel (throw-over). So, let’s look for the top of thatchannel.Figure 2-18I’ve now put in all of the wave labels— a, b, c, d, and e.Now, we will use the post-triangle thrustmeasurement guideline to estimate howfar wave 5 might travel. I’ve gone tothe origin of the a wave, which iswhere wave 3 ended, and extended theA-C trendline and the B-D trendline.The vertical line connecting thosetwo trendlines at the origin of the awave give us our post-triangle thrustmeasurement. It is the differencebetween 295 to roughly 328, or about$33.So, we will look for wave 5 to travelabout $33 from the termination point ofwave e at 316, up to approximately 349 — let’s call it 350. That’s a good target price for this long position.We’re long at 326 with a stop at 322 and a target price of 350, so our risk is $4 per contract, and our rewardis $24 per contract.Learn more about the independent analysis in the Financial Forecast Service. Go to: http://www.elliottwave.com/wave/FinancialForecastService.To return to Club EWI for more free resources, go to: www.elliottwave.com/clublibrary© 2011 Elliott Wave International — www.elliottwave.com 11
  • 12. Section 1 — Excerpt from How to Trade Triangles and the Thrust that FollowsFigure 2-19Prices are approaching 350. Do we getout here and take a profit? No. We canafford to wait for a couple of reasons.First, we’re now well out of the triangle.We can and should have raised our stoplevel as we moved up, possibly up towhere it started to gap at 333-334. Butwe also have to put our channel backin to see where we are. If we have athrow-under on the channel at the endof the triangle, most likely we’re goingto have a throw-over in wave 5.Figure 2-20The heavy green dotted line is ourtarget, based on the post-triangle thrustmeasurement. And you can see that wehave some resistance up there at aboutthe 350 level, so we want to be a littlecautious. We want to be quick to closethe position, but we should also givethis move a chance. Let’s check to seewhere we are on our channel.Learn more and put the power of the Wave Principle to work for your portfolio. Go to: http://www.elliottwave.com/wave/MetalsSS.To return to Club EWI for more free resources, go to: www.elliottwave.com/clublibrary© 2011 Elliott Wave International — www.elliottwave.com 12
  • 13. Section 1 — Excerpt from How to Trade Triangles and the Thrust that FollowsFigure 2-21As you can see, prices haven’t evengotten to the top of the channel, andthey are starting to gap up. Let’s waituntil we get to the top of or above thatchannel.Figure 2-22Prices have now traveled above thechannel, up to about 365. Though thereis a high probability that this wave willbe extended, prices have exceededthe post-triangle thrust measurementguideline and gone above the trendline.So we have a throw-over. We have anice profit, so we’re going to get outhere at about 365. That’s a profit of $39per contract.Learn more and put the power of the Wave Principle to work for your portfolio. Go to: http://www.elliottwave.com/wave/MetalsSS.To return to Club EWI for more free resources, go to: www.elliottwave.com/clublibrary© 2011 Elliott Wave International — www.elliottwave.com 13
  • 14. Section 1 — Excerpt from How to Trade Triangles and the Thrust that FollowsFigure 2-23You can see that prices actually did gohigher. There was a gap, probably anexhaustion gap, and the price movefinished at about 384. We did go beyondour target, but we were successful in thetrade. We can be confident that wave5 is complete, because now we have areversal. Prices have come back downinto the channel, and it looks like wave(4) of Intermediate degree is starting.Figure 2-24You can see now that the entire impulsewave was complete at that top at ap-proximately 384.Learn more about the independent analysis in the Financial Forecast Service. Go to: http://www.elliottwave.com/wave/FinancialForecastService.To return to Club EWI for more free resources, go to: www.elliottwave.com/clublibrary© 2011 Elliott Wave International — www.elliottwave.com 14
  • 15. Section 1 — Excerpt from How to Trade Triangles and the Thrust that FollowsFigure 2-25Let’s review. We had the A-C and B-Dtrendlines, which helped us to define theboundaries of the triangle. That helpedus to determine the termination point ofwave e, where the post-triangle thrustbegan. You also can see how wave 4, atits maximum retracement, entered theprice territory of the previous fourthwave of one lesser degree, and wherethe extension started in Minute wave0, within Minor wave 3.Figure 2-26You can see how helpful the channellines were in guiding us to find thebottoms of waves a and c, and evenwave e to some extent, although theA-C trendline was already in place bythen. But, more importantly, the chan-nel helped us to see the throw-under inwave 4 and the throw-over in wave 5,which gave us a signal that it was timeto close out our long position.Learn more about the independent analysis in the Financial Forecast Service. Go to: http://www.elliottwave.com/wave/FinancialForecastService.To return to Club EWI for more free resources, go to: www.elliottwave.com/clublibrary© 2011 Elliott Wave International — www.elliottwave.com 15
  • 16. The Financial Forecast Service delivers the most insightful market analysis you can buy — period The Financial Forecast Service is the most insightful U.S. market service in the world. Boldly independent and refreshingly contrary, it equips you to think, trade and invest independently from the crowd. You’ll get revealing charts and unique analysis of U.S. markets, gold, silver, and more from our three most popular publications: Bob Prechter’s monthly Elliott Wave Theorist, the monthly Elliott Wave Financial Forecast and the 3-times-per-week Short Term Update. Learn more about the independent, insightful analysis you’ll get with the Financial Forecast Service http://www.elliottwave.com/wave/FinancialForecastServiceLearn more about the independent analysis in the Financial Forecast Service. Go to: http://www.elliottwave.com/wave/FinancialForecastService.To return to Club EWI for more free resources, go to: www.elliottwave.com/clublibrary© 2011 Elliott Wave International — www.elliottwave.com 16
  • 17. Section 2 — Triangle / Thrust in SilverI’m Beginning To See A Pattern HereThe Elliott Wave Principle helps identify structures — regardless of the market, the news, or theopinions of “experts.”By Jill NobleThu, 13 Jan 2011 15:00:00 ETPity the poor fundamental analyst, who must always pay attention to what the Fed says… or to which politicalparty takes charge… or to what new product a company develops.And what about the economic reports that come out a month after the fact, only to be “revised” a month later?Then there are interest rates... and costs of production... and purchasing power... and so on. It’s a lot to keepup with.Not to mention, fundamental analysts have to figure out what all those reports mean to the markets. We’ve allseen that sometimes good numbers turn out “bad” and bad numbers turn out “good”— What a headache!If you follow the Elliott Wave Principle, the analysis gets a lot easier.Our analysts use the Wave Principle and other technical tools to cut through the fundamentals and replacepossible market outcomes with probable market outcomes.This past December, our Metals Specialty Service published a forecast for subscribers based solely on ElliottWave analysis. (Frequent readers of this column will note that earlier this month we highlighted the subsequentreversal in silver based on the pattern below.)Here’s what we published: As long as prices remain above the 28.31 low, we’ll stick with the view of a fourth-wave triangle that expects a new high… the push above 29.36 likely means that the final thrust has begun… it seems that the highest probability goes to the fourth wave triangle complete scenario. This view calls for a thrust to a new high with prices remaining above 28.74. There should be nothing holding back silver, and metals in general, from higher levels over the next several days.Learn more about the independent analysis in the Financial Forecast Service. Go to: http://www.elliottwave.com/wave/FinancialForecastService.To return to Club EWI for more free resources, go to: www.elliottwave.com/clublibrary© 2011 Elliott Wave International — www.elliottwave.com 17
  • 18. Section 2 — Triangle / Thrust in SilverThis forecast anticipated a textbook example of a Contracting Triangle pattern, shown here in Elliott WavePrinciple (originally published in 1978): A triangle appears to reflect a balance of forces, causing a sideways movement that is usually associated with decreasing volume and volatility. The triangle pattern contains five overlapping waves that subdivide 3-3-3- 3-3 and are labeled A-B-C-D-E. A triangle is delineated by connecting the termination points of waves A and C, and B and D. Wave E can undershoot or overshoot the A-C line, and in fact, our experience tells us that it happens more often than not.Next you can see the resolution of this pattern, as forecast in the Metals Specialty Service:This is indeed about as close to a textbook example as you’ll find.Learn more and put the power of the Wave Principle to work for your portfolio. Go to: http://www.elliottwave.com/wave/MetalsSS.To return to Club EWI for more free resources, go to: www.elliottwave.com/clublibrary© 2011 Elliott Wave International — www.elliottwave.com 18
  • 19. Section 2 — Triangle / Thrust in SilverThere are countless ways to look at the markets. But our expert analysts carefully scan the charts until theycan say, “I recognize THAT pattern.” In turn, they notify subscribers with informed, methodical and useablealerts.For our metals analysts, the benefit of the Wave Principle is its ability to identify a structure that can beforecast — regardless of the market, the news, or the opinions of “experts.”Learn more about the independent analysis in the Financial Forecast Service. Go to: http://www.elliottwave.com/wave/FinancialForecastService.To return to Club EWI for more free resources, go to: www.elliottwave.com/clublibrary© 2011 Elliott Wave International — www.elliottwave.com 19
  • 20. Section 3 — Triangle / Thrust and Subsequent Move in GoldThar’s Gold In Them Thar Charts!Elliott Wave patterns abound in the Gold marketBy Jill NobleThu, 20 Jan 2011 14:30:00 ETWe’ve all heard the expression “feast or famine.” It applies to many areas of life, and Elliott Wave marketanalysis is no exception.There are times when even the most accomplished Elliottician pores over charts, awaiting a clear-cut pattern.In those times patience is a virtue.But there are bountiful times — when the market hits a groove and textbook patterns unfold like they were,well, straight out of a textbook!For the past month, gold has been a “textbook” market. • First came the contracting triangle that ended in late December: it prompted our Metals Specialty Service to forecast a rally — which happened. • Next came the five-wave structure of the rally: this allowed us to forecast an impending top and decline — which also happened. • Then a clear five-wave drop led to yet another in-house forecast, namely a countertrend rally — which brings us to our most recent outcome.EWI Precious Metals analyst Mike Drakulich provided his Metals Specialty Service subscribers with agreat wave count in February Gold last week, forecasting a likely wave 2 target at around 1390. Goldturned at 1392.90.Drakulich did this by a careful read of the charts, which at the time showed a classic five waves down, threewaves up pattern: Elliott Wave Principle, p.24 Figure 1-3 (inverted)Learn more and put the power of the Wave Principle to work for your portfolio. Go to: http://www.elliottwave.com/wave/MetalsSS.To return to Club EWI for more free resources, go to: www.elliottwave.com/clublibrary© 2011 Elliott Wave International — www.elliottwave.com 20
  • 21. Section 3 — Triangle / Thrust and Subsequent Move in GoldMike has used the Elliott Wave Principle in his market analysis for over twenty years. And with nearly 30 totalyears of experience in the business, he understands the importance of catching every relevant detail, to helpminimize potential risks.Elliott waves and technical indicators are key to his success.Here’s the chart Mike showedsubscribers. Note his count of fivewaves down, three waves up — themost basic pattern — to forecast acorrective rally in gold.Drakulich called this chart “an Elliottwave thing of beauty.”Experience in analyzing the charts— and using the Wave Principle toanticipate market moves — allowsanalysts like Drakulich to make effectivemarket forecasts.Learn more about the independent analysis in the Financial Forecast Service. Go to: http://www.elliottwave.com/wave/FinancialForecastService.To return to Club EWI for more free resources, go to: www.elliottwave.com/clublibrary© 2011 Elliott Wave International — www.elliottwave.com 21
  • 22. Get Professional-Grade Analysis for the World’s Metals Markets Whether you’re a long-term investor or an active day trader, EWI’s Metals Specialty Service delivers intensive intraday to long-term coverage of all major metals including gold, silver, copper and more. Senior Metals Analyst Mike Drakulich draws from nearly thirty years of market experience to help keep your finger on the pulse of today’s prime metals with concise forecasts and analysis across all time frames. Learn more and put the power of the Wave Principle to work for your portfolio here: http://www.elliottwave.com/wave/MetalsSSLearn more and put the power of the Wave Principle to work for your portfolio. Go to: http://www.elliottwave.com/wave/MetalsSS.To return to Club EWI for more free resources, go to: www.elliottwave.com/clublibrary© 2011 Elliott Wave International — www.elliottwave.com 22

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