Short Term Update:
Gold was sharply lower in yesterday’s day session and that trend lower has continued in the overnight session as we have reached a low of 1788.40!
We continue our long correction in our wave -iv- bullish triangle as shown on our Daily Gold Chart.
Within wave -iv- we completed all of wave .c. at the 1675.90 low and we are now rallying in wave .d.
Wave .d. cannot rally above the wave .b. high of 1919.20 for this current triangle pattern to remain valid.
Remember that legs of triangle formations are full of overlapping waves, so the internal wave structure is sometimes difficult to analysis in real time.
In a surprising but very bullish development it now looks like all of wave .d. is complete at the 1879.50 high. You may recall that last week we had suggested that a possible projection for the end of wave .d was:
^c^ = ^a^ = 1882.10.
It appears that wave .d. ended at 1879.50
Why would we say that gold dropping $50 is a bullish development?
The reason is that with wave .d. not ending much sooner than we had thought we are now falling in wave .e., which is the final leg is this long drawn out wave -iv- correction.
After wave .e. and -iv- end we can expect a huge thrust higher in wave -v-, which will take gold to all time new highs.
Wave .e. has already satisfied its minimum condition so we need to be on guard for the completion of this wave -iv- bullish triangle at any time now. Bulls should be using the setback to add or go long gold.
Another plausible possibility is that all of wave .d. ended at 1836.90 and all of wave .e. at 1721.10. This would mean that all of wave -iv- is complete and that the next rally in gold will be a substantial thrust higher in wave -v-. This would create a very non-symmetric triangle, although triangles do not have to look pretty. This will be our alternate count for now.
Trading Recommendation: Long gold. Use puts as stops.
Active Positions: We are long, with puts as stops!
Grüße
PS Ich bin nicht abgeneigt, demnächst Jamie Dinamo zu folgen.
Die Entscheidung hierzu steht Kurzfristig an.
