Gold Monthly One of the interesting things about commodities, making them different than equities, is the tendency C?

to make large moves as “corrections,” or ABC patterns. This is in contrast to the stock market which 1005
will unfold in large five wave patterns higher over many decades and centuries. Why is this? I believe
this occurs because the stock market produces “yield” and is an expression of mankind’s continuing
A evolution, whereas commodities have ZERO yield. This means commodities will always be
873 “correcting” previous emotional extremes. This is not to suggest that commodities won’t trend higher
over decades and centuries, only that they will do it in a much different fashion than stocks.

This whole pattern smacks of a massive three wave move beginning with the 101
low in 1976. The A-Wave was a 772 dollar move. The C-Wave target of A = C was
1025, a level that has so far been huge resistance. The implications of decisively
taking out 1025 could be quite dramatic. The 161.8% of A = C target is 1502!

<B>

<A> The 78.6%* retracement of the

A-Wave was 266, which held
almost perfectly.
REPRINT 6/16/09 253
<C>
B
101 Gold begins to freely trade
in U.S. in 1976 *78.6 = Sq. Root of 61.8

Andy’s Technical Commentary__________________________________________________________________________________________________

 Gold Monthly (Log Scale)

Because Gold has decisively taken out the the A=C target of $1,025, this
model gains in viability. The targets are either $1,502 for a 162% of A=C,
or $2,187 for an A=C in % terms. The higher target would coincide with a
multi-decade long trend channel (log scale). 2187

C
1502
A
873
~ 38 months

Channel connected
through monthy closes.

~234 months
253
B

One high probability timing target for this C-Wave

would be December 2010 for (A+B)/2 = C-Wave
101 Gold begins to freely trade
duration, or 136 months.
in U.S. in 1976

Andy’s Technical Commentary__________________________________________________________________________________________________

 Gold (Daily) - An “Irregular” Correction

-B-
(C)

Completed
MOVE
1034
(A) “b”
“d”

“e”
(B)
“c”

“a”

As was highlighted on 9/14/09, this is the only realistic bearish case

for Gold. It would be that Gold did complete the C-Wave at 1034,
and now we’re at the tail end of an “Irregular” correction. If this is the
case, then $1,117 and $1,169 are resistance targets for the -B-
Wave. Under this model, Gold should not get above $1,169.

681
-A-

Andy’s Technical Commentary__________________________________________________________________________________________________

 Gold (Daily)

This would be the count that justifies the “Irregular” model of the previous page--that we’re
seeing an “impulsive” (C)-wave that is concluding the largest -B- Wave. In this model, waves
“1” and “3” are the same size, which means the final wave “5” is the “extended leg.” The “5”
main targets of this move would be $1,155 for a fifth wave that would be equal to the first
three waves. Another target would be $1,169 for the Wave “5” to be 162% larger than Wave
“3.” Those levels are consistent with the higher “Irregular” price objectives from the previous
page.

“3”

“1”

“4”

“2”

(B)

There is one issue with this model. The second and fourth waves look
very similar. There is supposed to be “alternation” between these waves--
one of them should be larger and more complex than the other. So, this
brings up another possible interpretation 

Andy’s Technical Commentary__________________________________________________________________________________________________

 “5”
Gold (Daily) “3”
5

This would be the outcome that would set the stage for much higher prices into late
2010--that we’re just in the middle of an impulsive wave that is subdividing higher.
3
The implications here are that the triangle formation merely finished a complex
Wave <IV> that looked some think this….
“4”

“1”

“2”

< IV >

Andy’s Technical Commentary__________________________________________________________________________________________________

 Gold (Daily) - A Double Triangle Wave <IV>?
It’s been noted that markets are witnessing an increasing number of “odd” formations. This would certainly
qualify. I’ve never seen anything like this before, but it would be the best explanation of the price action and
would support a move to $1,500+. The move down from the 1034 highs in March 08 has been best counted as
an “expanding triangle.” The subsequent sharp move was always “corrective” in nature, not impulsive. Then, -I-
we get a “contracting” triangle. So, we’ve basically seen three corrective structures in a row. The best
explanation must be (ABCDE)-X-(ABCDE) for a “Double Triangle.” If this is what’s going on, the recent advance
is most likely just Wave -I- of <V>.

< III >

-X-
(B) (B) ( D)

(D)
(E)
-Y-
(C)
< IV >
(A)
Contracting Triangle
(A)

Expanding Triangle

Clear “corrrective” move

(C)

(E)
-W-
Andy’s Technical Commentary__________________________________________________________________________________________________
 Gold Weekly (Log Scale)
C
<V>
This is an update to the longer term count first presented on 6/16/09. If we don’t see a
dramatic reversal before $1,169, then this would have to be the model. Notice that the larger
degree Wave <IV>, while odd, is somewhat similar to the lesser degree Wave -IV-, which was
also counted as Double that ended with a contracting triangle (fractal?). This wave count
would likely mean higher prices through 2010. Given the similarity between the higher degree < III >
wave-4s here, it wouldn’t surprise to see a Wave <V> that has the same size and scope as -V- -X-
the lesser degree Wave -V-.

-Y-
< IV >
- III -
(X)
-W-
(Y)
- IV -
(W)

-I-

<I> - II -

Back in June, I had thought that the -X- wave here was the final Wave
<V>, believing it to be a terminal fifth (corrective pattern). This ended up
being an incorrect interpretation. The good news is we knew that idea
< II > was wrong when the market lapsed into a triangle.
B

Andy’s Technical Commentary__________________________________________________________________________________________________

 C?
Gold Weekly (Log Scale) < III > <V>
-V- 1005

This is a less “conventional” Elliott Wave count. It suggests that the gold move
completed with $1,005/oz. peak in Feb 2009. There’s a tendency for most
Elliotticians to begin counts at the highest or lowest point on the chart, which is
usually not the actual finishing point of very large patterns. In several ways this
is a more satisfying count than the more “conventional” model presented on the - III -
next page. (V)
(X)

< IV >
(Y)
( III ) - IV -
“Expanding Triangle”
(W)
Wave < IV >? Triangles
( IV ) typical precede final
“Double Combination” fifth waves.
(I) Wave - IV -. “Looks” like
a triangle but I don’t think
(B) it is one.
Notice the long period
of congestion here. The -I- ( II )
longer the congestion, the (V)
more powerful the next move
will be. Indeed! (C)
<I> ( III ) - II -
REPRINT 6/16/09
(A)
(I)
( IV ) “Inverted running correction” that
presaged the powerful third waves
that were ahead.
( II )
< II >
253
B

Andy’s Technical Commentary__________________________________________________________________________________________________

 C
Gold Weekly <V>
(Log Scale) 1033

This is the model that supports a completed move in March 2008 at 1033. This is
the “conventional” count that most Elliotticians might see. Whether or not this is
the correct accounting or it’s the one on the previous page, it makes little < III >
difference. The bottom line is that if we did finish a major move from the 253, it -V-
was completing a 32-33 year pattern beginning with the 101 low in 1976. This
means that the next move down will be a large correction targeting 456, the 61.8%
retracement. If that seems like a ridiculously low level, it’s worth pointing
out Gold was just there less than four years ago! 456 also coincides with the level
where gold “broke out” and went parabolic. There’s a strong tendency for
parabolic markets to completely retrace back to their “break out” levels. < IV >

- III -
Gold went parabolic here.
- IV -

<I>
REPRINT 6/16/09
-I-

- II -
< II >
253
B

Andy’s Technical Commentary__________________________________________________________________________________________________

 Gold (Daily) - An “Irregular” Correction

REPRINT 9/14/09 -B-

Completed
MOVE

a
(W)
“b”
“d”

“e”
(X)

“c”

“a”

This is the Bullish model reworked a bit. The model that best fits with this
obvious triangle formation is that the 1034 high from last year completed
the move and we are now in the middle of an “Irregular” correction that can
take us to $1,117 - $1,169 as the 123.6%/138.2% of - A - = - B -. The
$1,117 level better fits the “thrust” targets coming out of the triangle. The
implications of the triangle pattern here still suggest upside targets between
$1,058 - $1,128 with a mid-October conclusion.

681
-A- A move below 950 NEGATES this bullish model

Andy’s Technical Commentary__________________________________________________________________________________________________

 DISCLAIMER WARNING DISCLAIMER WARNING DISCLAIMER

This report should not be interpreted as investment advice of any kind. This report is technical
commentary only. The author is NOT representing himself as a CTA or CFA or Investment/Trading
Advisor of any kind. This merely reflects the author’s interpretation of technical analysis. The
author may or may not trade in the markets discussed. The author may hold positions opposite of
what may by inferred by this report. The information contained in this commentary is taken from
sources the author believes to be reliable, but it is not guaranteed by the author as to the accuracy
or completeness thereof and is sent to you for information purposes only. Commodity trading
involves risk and is not for everyone.

Here is what the Commodity Futures Trading Commission (CFTC) has said about futures trading:
Trading commodity futures and options is not for everyone. IT IS A VOLATILE, COMPLEX AND
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