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Gold: Setting Near-Term Price Targets

Gold: Setting Near-Term Price Targets
This was our "initial upside target" -- which has now been exceeded. What's next?

By Elliott Wave International

Around the first week of the year, the outlook for gold was not looking promising, at least according to this Jan. 5 headline (Reuters):

Gold set for weekly decline as dollar, yields climb

The rally in gold which started in early October continued to struggle for much of the rest of January.

Even though the mainstream media was looking to so-called fundamentals -- such as the action of the dollar or bond yields -- Elliott Wave International focused on the patterns of investor psychology -- as reflected by Elliott waves.

Indeed, on Jan. 24, the U.S. Short Term Update, a thrice weekly Elliott Wave International publication which focuses on major U.S. financial markets, said:

Spot [Gold] made its lowest close since January 17 today. Still, prices remain above $1972.89, which keeps the short-term bullish potential dominant. The [unfolding Elliott wave] should carry gold well above $2250 as the rally's pattern progresses.

Keep in mind that when this analysis was offered more than two months ago, the price of gold was trading around $2013 -- a far cry from our price target above $2250.

Now, fast forward to April 1 and this headline (CNBC):

Treasury yields jump to start second quarter

As you'll recall, rising bond yields were mentioned in the media as a negative for gold back in January.

But what did gold do on April 1? Correct -- it hit another all-time high.

Not only that, April 1 was the day that our price target was reached.

Here's a quote from the April 1 U.S. Short Term Update:

The initial upside target for [Gold] was "above $2250," which we first stated in the January 24 Short Term Update and reaffirmed throughout February and March. Gold hit this target today when spot prices pushed to $2263.64 intraday.

On April 2, gold traded even higher.

Remember, Elliott Wave International doesn't make forecasts for financial markets -- like gold -- based on common beliefs about "fundamentals" which investors cannot count on.

Instead, we arrive at price targets based on Elliott wave analysis.

If you'd like to learn more about Elliott wave analysis, read Frost & Prechter's Wall Street classic, Elliott Wave Principle: Key to Market Behavior. Here's a quote from this "must read" book:

When after a while the apparent jumble gels into a clear picture, the probability that a turning point is at hand can suddenly and excitingly rise to nearly 100%. It is a thrilling experience to pinpoint a turn, and the Wave Principle is the only approach that can occasionally provide the opportunity to do so.

If you'd like to learn about the Wave Principle, know that you can gain complimentary access to the entire online version of Elliott Wave Principle: Key to Market Behavior for free.

Just follow the link and you can have the Wall Street bestseller on your computer in moments: Elliott Wave Principle: Key to Market Behavior -- get free and instant access.

This article was syndicated by Elliott Wave International and was originally published under the headline Gold: Setting Near-Term Price Targets. EWI is the world's largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.

GameStop (GME): 88% Shellacking Yet No Lesson Learned

GameStop (GME): 88% Shellacking Yet No Lesson Learned
"Every major peak gets cinematic treatment"

By Elliott Wave International

Back in early 2021, the meme stock craze was going strong.

As you'll recall that craze was all over the news and revolved around favorite stocks promoted by largely novice traders via social media. This January 27, 2021 New York Times news item sums up the frenzy surrounding one of those stocks:

'Dumb Money' Is on GameStop, and It's Beating Wall Street at Its Own Game

GameStop shares have soared 1,700 percent as millions of small investors, egged on by social media, employ a classic Wall Street tactic to put the squeeze -- on Wall Street.

A few days later, after GameStop shares had fallen hard, the February 2021 Elliott Wave Financial Forecast, a monthly publication which provides analysis of major U.S. financial markets, offered this warning:

Every major peak gets cinematic treatment and the current one is no exception. ... The Wall Street Journal reported, "Netflix, MGM Race to Produce Projects About GameStop Saga."

After that big decline in Gamestop shares in late January and early February 2021, the share price did bounce back, but has since fallen dramatically. Even so, some traders are not fazed, which is testimony to the high degree of overall optimism toward financial markets.

The recently published February Elliott Wave Financial Forecast provides an update with this chart and commentary:

The sustained public tolerance for falling prices is well illustrated by the resilience of retail demand for GameStop shares. GME is down 88% from its intraday high of $120.75 on January 28, 2021. But the faith in GME as a vehicle for wealth continues. ... On January 22, TheStreet's "meme maven" columnist added a host of "Reasons to Buy GameStop." There's just no quenching the demand for GME shares.

Again, this speaks to the high degree of optimism toward the market as a whole and our latest analysis of the main U.S. stock indexes is something you need to see for yourself.

As you might imagine, the main way Elliott Wave International analyzes financial markets is by employing the Elliott wave model.

If you'd like to learn the details of the Wave Principle, read Frost & Prechter's definitive text on the subject, Elliott Wave Principle: Key to Market Behavior. Here's a quote from this Wall Street classic book:

In the 1930s, Ralph Nelson Elliott discovered that stock market prices trend and reverse in recognizable patterns. The patterns he discerned are repetitive in form but not necessarily in time or amplitude. Elliott isolated five such patterns, or "waves," that recur in market price data. He named, defined and illustrated these patterns and their variations. He then described how they link together to form larger versions of themselves, how they in turn link to form the same patterns of the next larger size, and so on, producing a structured progression. He called this phenomenon The Wave Principle.

Would you like to read the entire book for free?

All that's required for free access to the online version of the book is a Club EWI membership. Club EWI is the world's largest Elliott wave educational community and is free to join. Members enjoy complimentary access to a wealth of Elliott wave insights regarding financial markets, investing and trading.

Follow this link to read the book for free: Elliott Wave Principle: Key to Market Behavior.

This article was syndicated by Elliott Wave International and was originally published under the headline GameStop (GME): 88% Shellacking Yet No Lesson Learned. EWI is the world's largest market forecasting firm. Its staff of full-time analysts led by Chartered Market Technician Robert Prechter provides 24-hour-a-day market analysis to institutional and private investors around the world.