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Daily Digger - Thursday Feb. 24, '05


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Bearvest,

 

Many thanks for sharing your knowledge and charting skills with us.

This TA novice does not understand what you mean with 'the 5th likely to diverge negatively'.

Please explain.

Thanks.

 

OldMan

 

XAU:

 

Seems like 4 waves complete with the 5th likely to diverge negatively.

 

OldMan:

 

Regrettably, we share something in common. Age. But we have solice in the fact that it brings knowledge.

 

My thesis is that the terminus of 3rd waves is best represented, in all time frames, by MACD, a trend indicator, or RSI, an overbought/ Dover Sole indicator. The MACD or RSI will reach its extreme at the end of wave 3 in an impulse or wave c in a correction.

 

Corrections are tricky. Extreme trend and overbought/Dover Sole levels correspond with price. There is usually no divergence.

 

In 3rd wave extensions, in impulses, the 3rd of the 3rd will evidence the MACD extreme, and a double divergence will occur.

 

Thus, the 5th wave, in impulses, which sets up the new price high or low, will be unconfirmed by MACD or RSI.

 

After 3 waves up, you have to be cautious. The prior count will give you guidance as to whether the 3 waves will morph into 5, or reverse direction. But at that point, you must exercise caution.

 

Never trade a 4th wave. You may hold if you've been lucky enough to have captured the 3rd wave. But trading should be restricted to when you have a completed pattern on the 4th, such as an ABC zigzag or an ABCDE triangle (a falling or rising wedge).

 

Hope this helps.

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World Gold Council issued a report on gold supply / demand - demand up in 04 but may not continue in 05 (report provides many details of 04 demand but only makes a brief general statement about 05):

WORLD GOLD COUNCIL REPORTS STRONG CONSUMER DEMAND FOR GOLD IN 2004 (PDF file)

Figures published today by the World Gold Council (WGC) reveal that the last quarter of 2004 represented the fourth successive quarter of strong net consumer demand for gold, with quarterly rises of 6% in tonnage terms (18% higher in dollar terms) compared with the same period in 2003. In 2004 as a whole, a higher gold price did not deter buyers, with net consumer demand 7% higher than 2003 in tonnage terms and 20% in dollar terms.
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The World Gold Council is a complete farce according to Murphy - more interested in gold as jewelry than as currency.

 

I'm going to put my order in for DROOY at .36 Yahoo's book value on the stock.

 

Moon - I can't even find that symbol quoted on Yahoo, which was where the article you posted came from.

 

NEM is the leader. As long as it moves forward I think the miners are going to be okay - except for the disasters in crap like DROOY.

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I second VS's call on Gammon Lake Resources.(Amex:GRS TSX:GAM) It's one of the few silverstocks which hasn't leaped firmly from the lows. Perhaps because it didn't print a large inverted hammer below support, like some of the other stocks have done recently. Anyway, me thinks look good.

 

Re DROOY, I always think there is enough time to pick up that stock. Personally, I like to trade it late® in the rally....

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