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Minyan Mailbag - HUI

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Note: Our goal in Minyanville is to remove intimidation from the financial markets and encourage an interactive dialogue among the Minyanship. We share this next discussion with that very intent.

Scott,


A question that maybe can be addressed in one of your articles. Today's interpretation of the HUI coincides with another Elliott Wave analysis done by Ron Rosen who sees a large movement upwards in gold (his article presents crude oil charts but sees the same pattern in gold).

His article is on www.321gold.com. titled "The upcoming blowoff 5th wave in oil (and gold)"

I am not proficient in elliott wave methodology but use my own technical indicators, however I am curious how you both can come to different conclusions. This is especially true since I have known both yours and Ron Rosen's work to be quite accurate.


Enjoy and benefit from your work,

Minyan Loic

Minyan Loic,



The major weakness of Elliott wave analysis is that multiple, highly divergent views of the same stock or index can be concluded without ever breaking any of the 13 essential Elliott wave rules of construction. As a result, using these rules, someone can come up with a wildly bullish interpretation of a stock and someone else can come up with a wildly bearish one. All the while, the Elliott wave rules will still "prove" his/her case.

This is the main reason I use Demark trend exhaustion indicators in my work: to help me "narrow" the possibilities that Elliott wave analysis reaches. It is also the reason I also use more classic technical analysis tools like MACD and ROC. Even after marrying all of these indicators in a proprietary way, there is still room for lots of variation, but I feel the combination of them helps to get to the heart of the probability bell curve with my analysis.

Though it is possible that Gold shoots straight higher from here, it remains a small probability based on my indicators. And if new lows are seen soon beneath the May lows for these indices, then the probability that they see new highs above Jan's highs becomes even smaller. Never advice of course, but that's what my indicators are saying right here.

Best,
SR


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