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2/12/2017: gold/silver index update and bull trend forecast

By Seed

The following chart is the gold/silver index vs US dollar chart. Since the index bottom out in Jan 2016, its price move back up violently. It seems the bull trend has already finished the wave 1 up and wave 2 down, is on the way of wave 3 up. The following projection is based on the bull trend (there are definitively some cases that the bull trend need to be scratched)

  • Assume this is a new uptrend with five waves up
  • wave 1: [0.385 , 1.199] (finished)
  • wave 2: [1.199, 0.696] (right on 0.382 fib, finished)
  • wave 3 is projected  [0.696, 1.51] (1.618 fib) or  [0.696, 2.01] (2.618 fib)
  • wave 4’s projection is better to wait for wave 3’s finish
  • same for wave 5’s projection
In what scenario, the bull trend should be scratched?
  • The price break down 0.696, the wave 3 is invalid, then it may be still in the corrective wave of previous down trend from 2011’s top.
  • The price break down 0.385, it is definitely sill in the corrective wave of previous down trend from 2011’s top.
In summary, this future price projection is based on Elliott wave pattern. So far the upo wave 1 and corrective wave 2 are line up for fib retracement. Let’s see how the projected 3rd wave up perform. Usually the 3rd wave up is strongest thrust wave. However, the up wave has smaller sub-waves, do not expect up wave will go up straightly. There will be corrective waves within 3rd wave up. The key is can this 3rd wave up take out wave 1 high 1.199. If not, this bull trend theory is invalid. If yes, stay with your trade on course for the target 1.51 or 2.01. When the 3rd hit the target, wave 4 projection will be updated.

2/7/2017: stock picks and update By SEED

Today’s one of hot stock definitely is Advanced Micro Device (AMD). The post earning continuous push ups made price high at $14.27, then reverse back to give back all gain to close lower at $13.29. This price action showed the RSI daily divergence. If tomorrow price continue to pull back, the divergence start to work. Note, with this divergence, there is no chase even the price does not immediately pull back.

  • 2 buy levels: $12.5: the break out level, $11.5: one of transaction congestion area
  • upside target is measured move $15.42
There are two recommendations are following. They are both fiver optics stocks. The first one is Finisar (FNSR). The price comes out from short term MAs resistance and get to 50 days MA. All technical indicators run positively. I believe the price will overcome this resistance without much effort.
  • buy entry 30~30.8
  • upside target : 33, 35, 37
The second stock is LITE. The price shoot up with huge buying volume after earning post. All technical indicators are positive. All short term MAs are lined up for support.
  • Buy entry 39~40
  • upside target the top trend line around 43~44.
In summary, no chase on AMD since the RSI daily top divergence. Buying dip on AMD is still good. Lite and FNSR are good buys. It even is ok to chase with small premium.

ITA components

$ITA defence sector ETF breakout

$ITA 国防板块ETF日线图。收盘价 144.44,正突破平台。11月以来的交易量持续增加。趋势看涨。

Is it the time to short the market?

When to short the market? Review the history!

Chart Contributed by SEED.