Weekly Digger - Tues. May 31 to Fri. June 3,'05

[aureleus]

here are two very good links to keep up to date re politics.

 

eu-vote (world government I)

gary north

(I think gary north is too optimistic about the negative votes. the EU will just keep putting the vote to all states until the treaty is ratified, IMO. main problem is that european citizens are socialists and socialists love big government, i.e. the voters are inherently masochistic.)

 

2nd front by neocons (world government II)

sandersresearch

(This one is hardcore scary. and makes perfect sense. I couldn't figure out why they sent wolfowitz to world bank, find out in the article.)

 

regards

[bearvest]

Solver:

 

As expected, silver broke out of the triangle.

 

It is now encountering resistance, also as expected.

 

Target remains $8.00.

[bearvest]

Bearvest if you get a chance could you comment on Ed Gofsky's article over at Gold Eagle on the current state of affairs in the mining sector? Does your count agree with his ? Thanks.

<{POST_SNAPBACK}>

 

Trader:

 

His long count on $XAU is wrong. It is an ABC. Wave 4 can't overlap 1.

 

Getting the count right isn't that important to a trader. What matters is getting the direction right. If you're long an impulse wave, whether it's wave 1 in a supercycle wave or wave A of a supercycle correction really doesn't matter---yet. We're still working our way up from the 1982-2000 decline.

 

As the second chart, for HUI, indicates, it has a bullish count. There was no overlap.

 

Regarding HUI, Feedfool has posted his count on LOB. He's a brilliant Elliottician. He subscribres to the count that says wave 1 ended in late 2003. I have it as wave iii of 3, primarily on my belief that that is where bullishness hits its extreme.

 

The message from these charts is that a top was in in late 2003 and it's been corrective since then---irrespective of the precise count.

[bearvest]

O.K., so much for the history lesson.

 

Where are we now?

 

I can't agree that we're in a wave 2 flat, despite what I said earlier.

 

A flat MUST have a 5 wave count for its C wave. The chart below says it's an abc 3 wave count due to the overlap indicated in red.

 

A 3-3-3 pattern in a correction may be the first 3 waves of a triangle. This, incidentally, is Feedfool's analysis. (As an aside, this supports my long HUI count as triangles are much more likely to occur in 4th waves than 2nd waves).

 

If so, it's a very narrow triangle--more in the nature of a rectangle.

 

As I say, trading Elliott is not so much getting the count right, as getting the direction right.

 

On the hourly chart, we likely have 5 waves up--so the trend is up, but a correction is imminent. It's unlikely that that it's little more than the b wave of the next abc in the rectangle.

 

When it completes, trade long the C wave. Elliott traders always trade the impulses and stand aside the corrections---trading waves 3 and 5 and c.