The Ending Diagonal structure that has been unfolding since the July lows (3267). The recent spike to 4888 in Wave 5 displays classic "blow-off" behavior—vertical price action often seen right before a trend exhausts itself.
1. The Technical Setup (The "When") While the diagonal is technically valid right here, we are watching two scenarios to time the reversal:
The "One Last Push" (Extension): If Wave 5 isn't finished, its possible to reach a final extension cluster between 4935 – 4965 (where Wave 5 equals Wave 3 length or 0.618x Wave 1).
The Reversal Targets: Once the top confirms, we expect a correction toward these magnetic support zones:
~4270 (38.2% retrace)
~4080 (50% retrace)
~3887 (61.8% retrace) (weak scenario)
2. Reality Check "Why": Fundamentals are flashing warning signs that support our bearish technical view:
The "Yield" Divergence: Gold is hitting records while bond yields are spiking (10Y ~4.29%). This "Gold up, Yields up" correlation is unsustainable; typically, either yields break, or Gold snaps back violently.
Crowded Trade Risks: We are seeing "late-cycle" behavior—ETF inflows are surging (retail FOMO) while institutional positioning is already stretched. This setup (High Specs + High ETFs) often precedes a liquidity flush.
The Trigger: A stabilization in the USD or a continuation of high real yields could be the pin that pricks this momentum bubble.
1. The Technical Setup (The "When") While the diagonal is technically valid right here, we are watching two scenarios to time the reversal:
The "One Last Push" (Extension): If Wave 5 isn't finished, its possible to reach a final extension cluster between 4935 – 4965 (where Wave 5 equals Wave 3 length or 0.618x Wave 1).
The Reversal Targets: Once the top confirms, we expect a correction toward these magnetic support zones:
~4270 (38.2% retrace)
~4080 (50% retrace)
~3887 (61.8% retrace) (weak scenario)
2. Reality Check "Why": Fundamentals are flashing warning signs that support our bearish technical view:
The "Yield" Divergence: Gold is hitting records while bond yields are spiking (10Y ~4.29%). This "Gold up, Yields up" correlation is unsustainable; typically, either yields break, or Gold snaps back violently.
Crowded Trade Risks: We are seeing "late-cycle" behavior—ETF inflows are surging (retail FOMO) while institutional positioning is already stretched. This setup (High Specs + High ETFs) often precedes a liquidity flush.
The Trigger: A stabilization in the USD or a continuation of high real yields could be the pin that pricks this momentum bubble.
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The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.
Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.