As described on the chart, the wave picture looks unfinished to the upside for Gold . Eventually, I'm looking for a move above 1300 and possible as high as 1450. This would result in a larger degree of trend 3 wave move higher that began from the Nov 2014 low. So far, we appear to have A-B in place. We may be in the midst of circle C higher.

If that is the case, we should be able to stay above 1190 on price. However, a retest below 1160 means circle B is continuing to grind lower. There is a false breakout zone from 1060-1131 which means so long as prices hold above 1060, this wave counts suggests the possibility for 1300-1450. So the deeper Gold drives, the better risk to reward ratio trade there is.

It is possible the high in Jan 2015 was high enough to call an end to the correction and serve as our A-B-C, but the timing of the correction higher doesn't line up with the length of the down trend. Therefore, I am discounting that as a higher probability count. Bottom line, there is likely some unfinished business to the upside over the coming months/year.

If that is the case, we should be able to stay above 1190 on price. However, a retest below 1160 means circle B is continuing to grind lower. There is a false breakout zone from 1060-1131 which means so long as prices hold above 1060, this wave counts suggests the possibility for 1300-1450. So the deeper Gold drives, the better risk to reward ratio trade there is.

It is possible the high in Jan 2015 was high enough to call an end to the correction and serve as our A-B-C, but the timing of the correction higher doesn't line up with the length of the down trend. Therefore, I am discounting that as a higher probability count. Bottom line, there is likely some unfinished business to the upside over the coming months/year.

That is a smaller degree of trend wave high. Once you start getting overlap of waves, that is indicative of a corrective pattern which is likely retraced. Since this would be an upward correction, that means a continuation downward.

So, triangles are a great place to start. They are one of the 3 patterns I look for to help me get started in a count. The reason is that once you find a legit EW triangle, it tips its hand to where you may be in the wave sequence. So, for Gold, I have updated the chart to include more labels going back to the triangle.

Triangle appear in the wave sequence prior to the LAST actionary wave. So once you see a triangle, then you have 1 more wave in the direction of the trend until a larger retracement is underway. In the case of Gold, that last move took place down to the Nov 2014 low. Since the whole move down was 5 waves, then we need a 3 wave upward counter trend bounce. That upward bounce could have ended in Jan 2015 as my notes indicate. However, the length of the 5 wave down trend was 38 months. The length in time of the 3 wave bounce higher was 3 months. Though possible, that is quite short in time. I would anticipate a counter trend bounce in time to take 1/3 to 2x the length of the down trend.

So, with the first leg higher clearly being 3 waves...the Jan 2015-Mar 2015 leg lower is clearly 3 waves, that means we are likely still working an A-B-C (flat or expanded flat) higher. Or, we are working a W-X-Y higher.

To your point, the wave count that suggests further downside would be if we are still in a "B" wave of the expanded flat...this suggests we stay above 1060. Or, it is possible we are still in the last actionary wave (or the circle 5th wave) lower. Though possible, the latter 5th wave is lower probability.

Continue to ask questions Welsman.

Also, see the EURUSD 60 min chart ("EURUSD Triangle Thrust Before FOMC") & USDJPY daily chart ("How Much Juice is Left for USDJPY Bulls") for other triangles.

However, if the 1190 level held, then prices could have been carving out a sequence of 1-2 then i-ii higher which means we embark upon wave iii of 3. Since 1190 is broken, that count is off and we look for continued grind lower.

Let's see how this plays out.