Tuesday, February 23, 2010


I've been racking my brain tonight trying to decide if gold is still in a C-wave or whether a D-wave has managed to sneak right past me without me ever noticing.

On one hand the C-wave never really generated the kind of excessive speculation we normally see at C-wave tops. The silver gold ratio never spiked, miners never even got to normal valuations much less expensive, which is what would be expected as gold fever hits hard at C-wave tops.

The massive year and a half consolidation only spawned a meager 190 point new high? That doesn't sound like a C-wave top to me. We had the most powerful A-wave, along with the weakest B-wave of the entire bull market so far and all it could gain was 190 points above the old highs? Hard to believe.

Trillions and trillions of dollar printed and thrown at the market and all we got was 190 points? Again hard to believe.

We even have a broken trend line.

Despite a very strong dollar gold is still holding well above the lows.

Everything seems to be saying this is still a C-wave...except the miners.

The HUI should have broken through the 420 resistance like a hot knife through butter. It should be breaking the down trend.

It hasn't done either. Instead it immediately turned tail as soon as it got short term overbought and has now closed back below the 200 DMA.

We have two lines in the sand. If gold can break the pattern of lower lows and lower highs by moving above $1161 then the odds are the C-wave is still intact. If however it moves back below the Feb. low we are almost positively caught in a D-wave.

Which ever way gold breaks out of the box should tell us were we stand. I will say that if this is a D-wave we should be getting close to the bottom. I would expect a test of the 65 week moving average and the $1000 mark will probably be about it before the next A-wave gets underway.

Remember the A-wave should test but probably not exceed the highs.

So at the moment we just have to wait and see which line gets broken first.