The usual then, then and now charts;
The ideal target seems to be about $9/$10. The A and B should ,perhaps, be just a little to the left as shown in the second chart. Wave 4 is, as always, the target par excellence. In this case all the more so as this is the starting point of the extended 5th wave on the way up. It is also where the correction retraces about 62%. The beige arrows show roughly what should be expected in the next little while. All these charts are still available in this blog.
Then – July 6th, 2014 – and now, as usual;
It is not quite there yet but nevertheless getting very close, just 7 points away! At the rate that it is dropping we could be there any day. We could go beyond 60, perhaps something like 45 or so but in the BIG PICTURE gold stocks are at a level where they might actually are becoming a buy for the first time in a long time. It stands to reason that if the stock market turns as a result of QE etc. being stopped, gold might paradoxically turn at roughly the same time. Here is the big picture again;
With the exception of 2001 and 2002 , gold stocks have not been this low for a very long time. Moreover the C of the “flat” has done the requisite 5 waves (even though one could argue that we are only completing 3). In any event a rebound to about 110 ( the top of the triangle) is very probable. That could easily mean a doubling of bad gold stocks like ABX, shown below on a longer scale;
The 5th wave does not yet appear to be complete but somewhere here between C$13 and $5 this stock is going to be a buy of a lifetime (27 years). If wave 5 equals wave 1, a normal relationship when wave 3 is extended, the perfect target would be about $10 or so. Keep an eye on the Swiss referendum as that may provide a boost to gold/ gold stocks if passed at the end of next month.
Nice 5 waves down making the recent rise wave 2. Waves 2 can go almost all the way back up but the 10700 level does form a cluster so it may stop there. Time will tell.
Then – Aug. – and now charts, as usual;
Timing is everything where stocks are concerned. When it comes to options timing is absolutely everything. It looked like a sure thing back in August as everything suggested a wave b or 2 was about to complete. Not so. First we needed a new high courtesy Mrs. Yellen at Jackson Hole. Our Sept. put with a strike of 585 at $4 with a target of $560 would have done just great if it had not expired! The November option with the same strike is presently trading above $30. It can be terrible frustrating when you are right (which we were not) and you still lose money, that is why you should be prepared to do many options.