Gold had rallied during CNY, hitting as high as 900++ before moving south. A pivot as been formed around 912. From Elliot Wave point of view, Wave 1 is now completed, we should see price to move between 858 - 912. I believe the next entry point should be around 835-858.

Commodities and futures pivot points

Last updated with closing prices on Wednesday, 28 January 2009
	Brent	Gold	Silver	Gas Oil	Heating Oil	Rbob Blendstock	WTI Crude Oil
Open	44.20	900.2	12.060	434.75	1.3810	1.2056	42.21
High	46.19	903.1	12.060	459.00	1.4432	1.2056	43.60
Low	43.76	882.0	11.959	434.75	1.3810	1.2056	40.60
Close	44.90	888.3	11.959	443.75	1.4116	1.2056	42.16

Standard Pivots
	Brent	Gold	Silver	Gas Oil	Heating Oil	Rbob Blendstock	WTI Crude Oil
R3	48.62	924.2	12.161	483.25	1.5054	1.2056	46.60
R2	47.38	912.2	12.094	470.08	1.4741	1.2056	45.12
R1	46.14	900.3	12.026	456.92	1.4429	1.2056	43.64
PIVOT	44.95	891.1	11.993	445.83	1.4119	1.2056	42.12
S1	43.71	879.2	11.925	432.67	1.3807	1.2056	40.64
S2	42.52	870.0	11.892	421.58	1.3497	1.2056	39.12
S3	41.28	858.1	11.824	408.42	1.3185	1.2056	37.64

Fib Pivots
	Brent	Gold	Silver	Gas Oil	Heating Oil	Rbob Blendstock	WTI Crude Oil
FIB R3	47.36	912.0	12.093	469.84	1.4735	1.2056	45.09
FIB R2	46.46	904.2	12.055	460.87	1.4505	1.2056	43.98
FIB R1	45.87	899.2	12.031	455.05	1.4356	1.2056	43.26
FIB PIVOT	44.95	891.1	11.993	445.83	1.4119	1.2056	42.12
FIB S1	44.03	883.1	11.954	436.62	1.3883	1.2056	40.98
FIB S2	43.44	878.1	11.930	430.80	1.3734	1.2056	40.26
FIB S3	42.54	870.2	11.893	421.83	1.3504	1.2056	39.15

article from : Gold: Volatility 2009 (freelist@goldforecaster.com)
...................
..........1. Is the world going to experience deflation from here onwards? Or, do we believe that deflation will be defeated by inflation? This conclusion is the foundation of our investment policy for 2009 / 2010. Whatever our course on this is, will take us to success or failure.
2. In deflation cash is king and asset values decline. However, this leaves a twilight zone for gold, which in deflation is a haven from uncertainty and is a form of extreme-times cash. Its performance in the recent months has testified to this, as it dropped back somewhat but nowhere nearly as much as equities or commodities. Indeed, in currencies that experienced weakness against the U.S.$ gold has hardly fallen at all and in some has risen soundly.
3. In inflation asset values rise and cash value declines taking the value of savings with it. Debt loses its sting and the velocity of money accelerates as people run from cash into assets as fast as they can. Again, gold has to be separated from paper cash as it sits in its twilight zone again, as an asset that is unprintable, has no counterparty, while remaining a form of cash? As we watched the consumer bubble rise and house prices seemingly sailing up unstoppably, gold rose as if to warn of the coming credit crunch. It thus served as an excellent haven from the unreality of the seemingly endless rosy future that house prices had discounted.
4. These two points show us that our investment decisions need not be one or the other, but that desirable place of both, taking us to a safe place. How much better the helm feels when one can be sure of this direction. How much firmer our grip on our investments when we be certain of preserving and increasing real wealth this way?

Commodities and futures

Commodities and futures pivot points

Last updated with closing prices on Wednesday, 14 January 2009
	Brent	Gold	Silver	Gas Oil	Heating Oil	Rbob Blendstock	WTI Crude Oil
Open	47.62	821.9	10.446	479.25	1.4460	1.1677	38.85
High	48.58	829.4	10.527	484.75	1.4631	1.1677	39.39
Low	46.19	806.5	10.424	452.25	1.4370	1.1677	35.50
Close	47.62	808.5	10.446	463.25	1.4631	1.1677	37.28

Standard Pivots
	Brent	Gold	Silver	Gas Oil	Heating Oil	Rbob Blendstock	WTI Crude Oil
R3	50.97	852.3	10.630	517.25	1.4892	1.1677	43.28
R2	49.85	837.7	10.569	499.25	1.4805	1.1677	41.28
R1	48.74	823.1	10.507	481.25	1.4718	1.1677	39.28
PIVOT	47.46	814.8	10.466	466.75	1.4544	1.1677	37.39
S1	46.35	800.2	10.404	448.75	1.4457	1.1677	35.39
S2	45.07	791.9	10.363	434.25	1.4283	1.1677	33.50
S3	43.96	777.3	10.301	416.25	1.4196	1.1677	31.50

Fib Pivots
	Brent	Gold	Silver	Gas Oil	Heating Oil	Rbob Blendstock	WTI Crude Oil
FIB R3	49.83	837.5	10.568	498.93	1.4802	1.1677	41.24
FIB R2	48.95	829.0	10.530	486.90	1.4706	1.1677	39.80
FIB R1	48.37	823.5	10.505	479.10	1.4643	1.1677	38.87
FIB PIVOT	47.46	814.8	10.466	466.75	1.4544	1.1677	37.39
FIB S1	46.56	806.1	10.427	454.40	1.4445	1.1677	35.91
FIB S2	45.98	800.6	10.402	446.60	1.4382	1.1677	34.98
FIB S3	45.10	792.1	10.364	434.58	1.4286	1.1677	33.54

Elliott Wave Theory

http://www.acrotec.com/ewt.htm

Elliott Wave Theory interprets market actions in terms of recurrent price structures obedient to the Fibonacci sequence. Basically, Market cycles are composed of two major types of Wave : Impulse Wave and Corrective Wave. For every impulse wave, it can be sub-divided into 5 - wave structure (1-2-3-4-5), while for corrective wave, it can be sub-divided into 3 - wave structures (a-b-c).

Surfer's Waves within Wave

An important feature of Elliott Wave is that they are fractal in nature. 'Fractal' means market structure are built from similar patterns on a larger or smaller scales. Therefore, we can count the wave on a long-term yearly market chart as well as short-term hourly market chart.

See waves within wave:

Rules for Wave Count

Based on the market pattern, we can identify ' where we are' in term of wave count. Nevertheless, as the market pattern is relatively simplistic, there are several rules for valid counts:

1. Wave 2 should not break below the beginning of Wave 1;
2. Wave 3 should not be the shortest wave among Wave 1, 3 and 5;
3. Wave 4 should not overlap with Wave 1, except for wave 1, 5, a or c of a higher degree.
4. Rule of Alternation : Wave 2 and 4 should unfold in two different wave forms.

Wave forms in Impulse Wave

There are three major types of wave form in Impulse Wave:

(a) Extended Wave

Among Wave 1, 3 and 5, only one should unfolded into extended wave. 'Extension' means the wave is elongated in nature and sub-waves are conspicuous in relation to waves of higher degree.

See extension pattern:

(b) Diagonal Triangle at Wave 5

Sometimes, the momentum at Wave 5 is so weak that the 2nd and 4th sub-waves overlap with each other and evolved into diagonal triangle.

(c) 5th Wave Failure

In some other circumstances, the Wave 5 is so weak than it even cannot surpass the top of the wave 3, causing a double top at the end of the trend.

See diagonal triangle and failure fifth pattern:

Wave Forms in Corrective Wave

Corrective Wave forms are rather complicated, but basically we can categorize them into six major wave forms:

1. Zig-Zag : abc pattern composed of 5-3-5 sub-wave structure.
2. Flat : abc pattern composed of 3-3-5 sub-wave structure, with b equals a.
3. Irregular : abc pattern composed of 3-3-5 sub-wave structure, with b longer than a.
4. Horizontal Triangle : 5-wave triangular pattern composed of 3-3-3-3-3 sub-wave structure.
5. Double Three : abcxabc pattern composed of any two from above, linked by x wave.
6. Triple Three : abcxabcxabc pattern composed of any three from above, linked by two x waves.

See Six Corrective patterns:

Conclusion

The attractiveness of Elliott Wave Analysis is : Three impulse wave forms and six corrective wave forms are conclusive. All we have to do is to identify which wave form is going to unfold in order to predict future market actions. This is a bold statement, needless to say, knowledge of market historical wave patterns and experiences in wave count are of paramount importance.

a letter written to editor of

http://news.goldseek.com/GoldSeeker/1231822800.php

“Dear CIGAs,

With crude oil getting whacked and the Dollar having another one of those “let’s get out of risky trades” rallies, gold had as much chance as a snowball at one of Al Gore’s global warming symposiums (Note to Al – look out the window every now and then if you want to learn something – that white stuff that is everywhere is called ‘snow’). It collapsed through downside support near $840 and continued lower driven by sell stops until it breached the $830-$828 support level. If gold cannot recapture that $830 level and hold above it, technically-related selling pressure will increase. Support now emerges near the 40 day moving average at $814 with the 100 day moving average just beneath that at $810. Should gold move down into that region, it will be critical from a technical standpoint for the market to attract quality buying or face a much greater exodus of longs that could bring the market down to $800 or below. First resistance is back near $840 and then at today’s high. Above that is $880 which is the level capped by the bullion banks. Last Friday’s release of the Commitment of Traders data proved that it was that same crowd which once again stymied gold’s forward advance, much to the chagrin of the newsletter writers and hedge fund ninnies who were again made fools of as they chased prices higher only to have their pockets summarily picked by these vultures.

Note to the fund managers – this is not the soybean market – if you wish to make money playing the paper gold game against the bullion banks then have the good sense to alter your losing strategy and begin accumulating gold on weakness instead of the brain-dead and discredited method of chasing momentum higher. That will not work for gold. It has not worked for 8 years – why should things be any different in 2009?

Judging from the open interest readings, there are a large number of new speculative short positions being placed in this market. The bullion banks use this selling to cover existing shorts as the markets moves lower in addition to that of exiting longs. Over the last eight years, spec selling into weakness has not proved to be a profitable strategy either. The only way to have consistently made money in the gold market has to buy into weakness and sell into strength – the EXACT OPPOSITE of what these tech driven funds practice.

As a further point of note – the index funds spent the entire portion of their day today running out of all the various commodity markets that they had just run into over the past week as they rebalanced their portfolios. The commodity circus continues…. Corn went limit down, soybeans were beaten back and wheat puked – deflation is back in vogue where last week it was inflation. Copper in particular was mauled which it should have been after the stupid index fund buying of last week. Don’t like the current psyche – stick around another week or so; next week it will probably be hyperinflation only to be followed by a return to the barter system the week after that, and then a round circle back to deflation once again. Don’t feel bad if you cannot understand what the markets are saying right now – the market itself has no idea what it is saying – maybe it is attempting to get in touch with its inner child or some other sort of nonsense. Thanks fund managers for clearing things up for us all….

The impetus for knocking the grains lower was the USDA report this morning which came in with a bearish slant to it. Even at limit down corn is still 75 cents above its low made late last year and it still appears to me that prices went as low as they are going to go in that particular pit. Let’s continue to monitor both the grains and the crude oil to get some clues as to gold’s performance. Crude could not hold above $40 so a test of the low near $35 is right around the corner. What it does with that level will tell us whether a bottom is in this market as well or we are going to try for $30 before bottoming. Stay tuned.”-

Dan Norcini, More at JSMineset.com

Fibonanci Support & Resistence Fib Pivots
	Brent	Gold	Silver	Gas Oil	Heating Oil	Rbob Blendstock	WTI Crude Oil
FIB R3	53.32	879.9	11.204	543.71	1.6652	1.0764	51.28
FIB R2	51.20	868.1	11.148	529.83	1.6311	1.0764	48.82
FIB R1	49.82	860.4	11.112	520.83	1.6089	1.0764	47.23
FIB PIVOT	47.64	848.3	11.055	506.58	1.5739	1.0764	44.70
FIB S1	45.47	836.1	10.997	492.33	1.5388	1.0764	42.17
FIB S2	44.09	828.4	10.961	483.33	1.5166	1.0764	40.58
FIB S3	41.97	816.6	10.905	469.46	1.4825	1.0764	38.12

Where will gold be heading next??
Before we can predict where gold price will be going, lets look at the current Gold chart/ Crude Oil & Currency Trade.
1) Gold has been making some new higher highs and higher lows since 24 Nov, gold is once again entering some consolidation phase. (trading between 840-880)
2) Negative Divergence spotted for MACD histogram even though price movement make a new high between 17-22 Dec. (the MACD histogram is unable to exceed its previous high of 10++)
3) a cross-over of MACD indicates a price reversal is happening now. This could bring to a further price drop as indicated by the cross over in EMA20 days. However 10 min tick data is showing a strong support 840 level.
4) The drop in gold price (Aug) happened at the same time when Crude Oil starts its steep descent
5) The drop in gold price (Aug) happened a few day after the drop in EURO$ vs US$

With this informations, can we summarise price movement in gold is due to impact from Crude oil & currency trade (especially EURO vs USD) ??
.Resistance at price of 48....


Another resistance for EURO vs USD currency trade....


Gold dropped to 840 level at NYMEX trading. What is next?
The next few days will be crucial as it will reveal my entry price, either 840 or 820.

Happy trading.