Stay Long Gold As Bond Yields Rise
Apr 15, 2019
Despite Thursday’s “pullback”, “takedown”, or whatever analysts want to call it, the Captain’s view is that wave !iv! is complete at the 1279.50 low and that our wave !v! rally higher is now underway.
As you can see on our “Daily Gold Chart”, we need to strongly break and close above our red trendline that connects the three recent highs in this market.
Once that red line is broken we will have our confirmation that all of wave !iv! is complete at the 1279.50 low.
We will provide projections for the end of wave !v!, when we are sure that all of wave !iv! is complete.
Our initial projection for the end of all of wave $iii$ is:
$iii$ = 4.25$i$ = 1412.10.
Long term, our first projection for the end of wave .iii. is:
.iii. = 1.618.i. = 1447.20.
We do have higher projections. Of course, wave .iii. will subdivide into a 5 wave impulsive sequence in its journey higher.
Trading Recommendation: Go long gold. Use puts as stops.
Active Positions: We are long, with puts as stops!
As you can see on our “Daily Silver Chart” it looks like wave .ii. has become a double 3 wave pattern, with the second wave ^c^ possibility being complete at the 14.85 low.
Once wave .ii. ends we should expect a very sharp rally in wave .iii., to be the next big event in this market.
As with gold, our confirmation will come when we break and close above our red trendline that connects the recent highs, as shown on the chart.
We will provide our initial projections for the end of wave .iii. when we are sure that all of wave .ii. is complete.
Trading Recommendation: Go long silver. Use puts as a stop.
Active Positions: We are long, with puts as stops!
Wave *b* should rally all the way back to the start of the correction, which is 3.248%. Wave *b* could also become a bearish triangle.
In the very short term we likely completed a small 5 wave impulsive sequence from the 2.356% low to the current high of 2.544%.
If that is the case, then we likely completed our small correction at the 2.463% level and should therefore be moving higher again.
Our alternate count is that all of wave (ii) is complete at the 2.356% low. If this is the correct count, then we should also expect this market to start to rally sharply higher in wave (iii).
The 10year bond yield reached a historic low of about 1.336% on July 06, 2017 and it has started to rally higher.
We expect that in the coming years the US 10year bond yield will rally back to at least the 15.84% level that was reached in September of 1981!
Trading Recommendation: Go long, risking to 2.350%.
Active Positions: Long, risking to 2.350%!
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