Precious Metals, December 31, 2010

Quick Takes:

• I think gold and silver are in the process of topping a Minute wave 5 of Minor wave 3
• I think gold and silver will soon correct in a Minor wave 4 that would cause an OEW mid-term trend change
• I may be wrong :-D
  

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We have been enjoying a really good ride in gold and silver. We have been in an uptrend since August. During this time, silver has been on a rocket ride up.

As we went through the process of following and charting Gold and silver prior to the takeoff of August, there were periods when we thought we were seeing conflicting counts between the two metal. Those conflicting wave messages got resolved as uptrend unfolded.

Right now we have counts on GLD and SLV that are in agreement as far as wave degrees go

This is SLV weekly

This is SLV daily

If correct, we may not be far from a conclusion to Minute (green) wave 5 = Minor (dark blue) wave 3.

This is GLD weekly

This is GLD daily

Silver has been the outperformer and its current Minute 5′s internal count looks cleaner than Gold.

Assuming that my counts are correct, I am looking for a top to happen and lead to an OEW trend change to give me Minor (dark blue) wave 4. If I get that, I will be looking to for signs of a bottom to start planning new purchases.

What if I am wrong and this is going to the moon with an extended wave? Well, I have a core position that I am comfortable with right now and it will make money.

What if I am wrong and the top happens but, instead of giving me a wave 4, it gives me a far deeper decline? Well, at some point, I will finally get a wind of my mistakes and exit my position. Let’s get the OEW mid-term trend change, and we’ll see what sort of downtrend we are dealing with.

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