Well, although I had seen the possibility that would gold would not rally to the highs before going lower, I didn't give it enough of a probability.
Gold, in fact, has slid lower and is not showing much life and so I've reassessed the wave count to this W-X-Y.
Three waves down (W), then a sideways triangle (X), and now we're in the midst of (Y).
Y will likely...
To be very candid, the snap back rally that I had envisioned has not yet materialized and it makes me question my previous wave count.
Quite frankly, if gold doesn't have a strong move today over $1,500 then its not likely to happen.
The first encouraging sign would be gold touching $1,481...
IF we are still in an a-b-c rally, then we've just set the b wave.
C wave coming??
Not that the a rally was only 2 trading sessions (from Oct. 1 - Oct. 3), meaning that the move higher could be swift and strong!
Well, its been a challenging few days for metals bulls the past few sessions but I believe we have encouraging signs, as indicated by SILVER.
As you can see, silver has come back above the critical channel support line.
I still see a solid push coming in the next several trading sessions to form Wave X.
Cross your fingers metals bulls.
OK gang, the gold triangle that I posted earlier this morning has clearly been invalidated but I still maintain that we're going to attack the highs next week.
I refer you back to the 7-wave move off the Oct. 4 lows. This was not impulsive and indicates that there is one more high coming.
Hold on to your long and average down if you can.
And cross your fingers!
If gold is just finishing its triangle continuation pattern and ready to move higher, then NEM is a great buy!
Any options in the $39-$40 level expiring next week should do excellent, if that is the case.
I was a bit premature in predicting the next GOLD rally but, as you can see, we have now hit 2 critical support trendlines:
1) the mid-channel downtrend support line (dashed green line); and
2) the rising channel trendline (purple lines)
Now its make or break time for GOLD!
My long term projection (see previous post on Crude this past weekend) is that we are in have been in a sideways triangle ever since the collapse during the financial crisis. My wave analysis is that we're working on the (c) wave, which will likely top in the next year or so.
In the short-term, I believe we should be completing the B wave of this move...
I wanted to take a moment to show why I don't believe that GOLD is ready to breakout into new highs just yet, and why we are more likely to see further consolidation to the downside after a coming retest of the $1,556 highs.
For all of you who are well-versed on Elliottwave principles, you know that an impulse wave can only be either 5 waves or 9...
When looking at the crude oil market, one thing that seems quite evident (in Elliottwave perspective) is that the rally from the FEB 2016 lows are NOT impulsive. The bounce back clearly has been choppy and no 5 wave impulse is clear.
With that in mind, how are we to make sense of the MACRO direction for OIL?
My analysis leads me to view this large and extensive...
GOLD had an impressive consolidation day today. Even though technical indicators (MACD, RSI, Bollinger Bands) show that its overbought, it didn't give much on the downside and is now showing strength as the session closes.
I'm still anticipating an attack on the highs in the first few days of next week... (green channel indicates projected route).
Gold bulls (and short-covering) sustained the attack after the FED announcement yesterday and now seem to have the momentum.
I believe we are on the way to testing the $1,556 high next week. My prediction is that gold fails to reach new highs and falls back down to the $1,400 region in coming weeks...
GOLD did exactly what it was supposed to do... should continue overnight and into tomorrow.
Still anticipating the gold will NOT reach new highs but will be rebuffed next week in a B wave high.
Thereafter, we would see a 5-wave C move.
This would be a FLAT CORRECTION if it plays out...