In keeping in lieu of our gold bear position, we are looking to go short some gold miners.
Above is a chart of ABX,. Quite a few of the miners have a similar picture.
According to our labelling, ABX is in a 'C' wave which should take ABX below $17 over the next few months. The top in feb looks like a 'B' wave. Since then ABX has fallen in 5 waves and risen in 3, clearly showing a pattern of lower highs. We fully believe the lower low will ensure.
The more compelling evidence to short ABX is the "alignment of the stars" as we call it, is about to occur i.e 50d > 20d> 5d and all three with negative slopes. In elliot terms this means the 3rd of 3rd in the C wave is about to commence. We believe ABX will see a very sharp drop in the next few weeks.
We should have shorted this earlier, but did not find time to scan charts the past couple of weeks.
Our trade is to short ABX first thing monday morning. The stop loss is a close above 34$. It is a bit far away but we shall risk 10% on this trade, as we believe ABX will eventually come down below 17$ in the coming weeks and months and the reasons are quite compelling (atleast to us).
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