Make Some Sense of Today’s Gold Market

The following video takes a look at gold over the coming weeks, and what we can expect from the medal.  Gold finished up about 1 % today so we shall see if Adam’s analysis holds up.  Ultimately, there are several very interesting concepts which are discussed in this video.  One is Donchian Channels – a price overlay which can be applied to charts.  Many traders are unfamiliar with this indicator, and this video shows one way it can be used.

I don’t generally use overlays, except my own markings, but I do actually like the Darvas Box overlay.  Since I try to keep my analysis very simple based on support and resistance levels, as well as trendline line levels, many of these are marked by the Darvas Box overlay.  So it often compliments my methods, although I don’t use it all the time.  It is worth reading up on though as Nicolas Darvas became a very rich man using this indicator he created.

Another interesting point is using previous “legs” of the trend to predict futures movements.  Adam shows the first leg down is 18 days, and the second leg down is 24 days.   From this he takes the average of these and states the next leg down is likely to be about 21 days.  This method can also be used for the actual price movement as well to predict likely price targets.

The tenet comes from the principle in Elliot Wave Theory (as well other theories which tangent the idea) that the second leg of a trend is often the strongest, and the first and third legs are not as strong as the second.  Elliot Waver’s will understand what I am saying if instead I say wave 3 is the longest in a 5 wave trend….but since I would never inflict actual Elliot Wave on an unsuspecting audience, we shall just call these legs down…and Adam is calling for at least three of them.

All this should make more sense after watching the free gold analysis video….

http://www.ino.com/info/530/CD3784/&dp=0&l=0&campaignid=3

Cory Mitchell, CMT

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