The price of gold is in rally mode in the charts

As the counter-trend rally in gold has shown, Elliot wave theory is indispensable in finding turns in the market, says John C Burford.

In Friday's post, I suggested that gold was poised for a counter-trend rally. One of the main clues was the five-wave count of the wave down from the October 30 high.

When we see a clear five-wave pattern, we should always expect a counter-trend move. That is one of the basic rules of EWT (Elliot wave theory).

Subscribe to MoneyWeek

Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE

Get 6 issues free
https://cdn.mos.cms.futurecdn.net/flexiimages/mw70aro6gl1676370748.jpg

Sign up to Money Morning

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter

Sign up
Swipe to scroll horizontally
(Contracts of 100 troy ounces)Row 0 - Cell 1 Row 0 - Cell 2 Row 0 - Cell 3 Open interest: 386,436
Commitments
134,546111,85524,091190,092212,391348,729348,33737,70738,099
Changes from 11/26/13 (Change in open interest: -7,996)
1,1324,996-2,955-5,919-11,856-7,742-9,815-2541,819
Percent of open interest for each category of traders
34.828.96.249.255.090.290.19.89.9
Number of traders in each category (Total traders: 265)
9485655753185178Row 8 - Cell 7 Row 8 - Cell 8

John is is a British-born lapsed PhD physicist, who previously worked for Nasa on the Mars exploration team. He is a former commodity trading advisor with the US Commodities Futures Trading Commission, and worked in a boutique futures house in California in the 1980s.

 

He was a partner in one of the first futures newsletter advisory services, based in Washington DC, specialising in pork bellies and currencies. John is primarily a chart-reading trader, having cut his trading teeth in the days before PCs.

 

As well as his work in the financial world, he has launched, run and sold several 'real' businesses producing 'real' products.