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Stocks Up, Gold Up. Stocks Up, Gold... Down? AaaaAaaaAaaa!
How EWI's Metals Specialty Service helps you get through the maze of the mainstream views on the correlation between stocks and gold
By Nico Isaac
Thu, 07 Jun 2012 17:15:00 ET
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Over the last week, gold prices have seen more up-down-up-down swings than an espresso-drinking Tarzan. To wit: On Friday (June 1), gold prices skyrocketed over 4% to their highest level in a month -- only to turn right back around on June 7 in an intraday 3%-plus freefall.

It doesn't help matters that the same extreme volatility is also alive and well in the mainstream media reports on gold. Here, the recent news items below capture the wild flights of "fundamental" fancy:
 
  • Gold and stocks are inversely correlated: "US Stock Rally Unlikely To Last: Buy Gold" (Associated Press) 
  • Then, gold and stocks are positively correlated: "Gold Hits One-Month High As Stocks Rally" (CNBC) 
  • Nope, inversely: "Fear Is Here! Gold Soars as Stocks Plunge." (Market Watch) 
  • Oh, but wait: Gold and stocks move in tandem: Gold Edges Lower As Equities Fall" (Christian Science Monitor)
Pardon my "Tarzan" but, "AaaaAaaaAaaa!"
 
The fact is this: With "fundamental" analysis, price action leads -- and the analysis follows. First the market moves, and then comes an explanation of what just happened.
 
With Elliott wave analysis, however, objective indicators -- such as wave structure, Fibonacci price targets, daily sentiment, and technical momentum signals -- call all the shots. The result is a much clearer picture of potential near- and long-term trading opportunities.
 
Like the chart below of gold prices versus the Relative Strength Index since May 2012. It was published today, June 7, in our Metals Specialty Service intraday analysis of gold. And the message was consistent:
 
Extreme high RSI readings have coincided with near-term peaks, while extreme low RSI readings have signaled near-term lows.
 
 
 
The June 7 Metals Specialty Service intraday analysis also shows you where the RSI reading stands now, alongside this very urgent message:
 
            "With gold's sharp decline today, we are now at a critical juncture."
 
Metals Specialty Service then outlines the exact path gold prices must take to confirm a meaningful trend change.
 
Stop pounding your fists on your chest AND get the full story today with a subscription to the premier, trader-focused Metals Specialty Service.
 
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GOLD: Where Do Your Opportunities Lie at This Critical Juncture?

Let an Elliott Wave Expert Help You Turn Today's Volatility into Tomorrow's Probabilities
 
Metals Specialty Service Editor Mike Drakulich uses the Wave Principle and 30 years of market experience to help you replace the endless market possibilities with higher-confidence probabilities.
 
Subscribe today to get Mike's expert intraday and daily Elliott wave forecasts complete with key price levels, targets and valuable insights for gold, silver and other major metals.


Learn more about EWI's Metals Specialty Service now >>

Tags: Elliott wave, Elliott Wave trading, Fibonacci, fundamental analysis, Gold, precious metals, Relative Strength Index (RSI), silver, technical indicators, U.S. STOCK MARKET
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