Good news: It looks like the technical requirements for the recent low at $1192.70 have been met. Here’s what it means for gold going forward…
Short Term Update:
Gold once again moved sideways in yesterday’s day session and in the overnight session. We are now trading at the 1210.50 level.
All of wave .ii. appears to be complete at the 1167.10 low. If that is the case then we must label our first impulsive sequence out of the wave ii low as wave $i$, which would have ended at 1220.70.
The good news is that we have also now satisfied all of the minimum technical requirements for a completed wave $ii$ at the 1192.70 low.
Our retracement levels for wave $ii$ are:
50% = 1193.90;
61.8% = 1187.60.
However, in spite of this, wave $ii$ may not be complete at the 1192.70 low, and we may need to trade back to that low one more time, to complete all of wave $ii$.
We will only be able to confirm that all of wave $ii$ is complete when we break and close sharply above the wave $i$ high of 1220.70.
We will provide and updated projection for the end of wave $iii$ when we are sure that all of wave $ii$ is complete.
We note that the “Commitment of Traders: Managed Money(Speculators)” report continues to have a record short position in gold, which is an indication for us of a coming huge rally, which is likely just around the corner!
We are still watching for the possibility that all of wave -ii- did not end at the 1124.30 low and that gold may be heading there.
For now, the good news is that will be our alternate count.
Assuming that wave .ii. ended at the 1167.10 low, our first projection for the end of wave .iii. is:
.iii. = 1.618.i. = 1447.20.
We do have higher projections. Of course, wave .iii. will subdivide into a 5 wave impulsive sequence in its journey higher.
Trading Recommendation: Go long gold. Use puts as stops. Aggressive traders should consider adding to long positions here.
Active Positions: We are long, with puts as stops!
Short Term Update:
Silver also once again moved sideways in yesterday’s day session and again in the overnight session. We are currently trading at about 14.29.
Our first attempt at closing above the 14.34 level failed, but we suspect the next attempt will be successful.
We are now waiting for confirmation that all of wave .c. and ii are complete at the 13.96 low, and a break and close above the 14.34 resistance level would be a very good signal in the direction.
Our overall analysis is not changed as we are waiting for the end of wave ii to occur, before we start to move sharply higher in wave .iii.
One more drop below the 13.96 low seems likely.
We note that the “Commitment of Traders: Managed Money(Speculators)” continue to be at a record short position in silver also!
As we also mentioned in our last End of Week Post, wave 2 in silver may now have ended at the 13.67 low and that we might be heading to that point again, before all of wave 2 ends.
For the time being this will be considered our alternate count.
Trading Recommendation: Go long silver. Use a put as a stop. Aggressive traders should consider adding to long positions here.
Active Positions: We are long, with puts as stops!
Short Term Update:
The December contract is now the front month, so on our “Daily Continuous Chart” we show a sharp drop in the USDX in yesterday’s trading session. We reached a low of 93.88. In the overnight session the USDX has marginally rallied to reach a high of 94.26.
The intraday charts are suggesting that the drop from 96.87 to 94.34 is a completed 5 wave impulsive sequence. We have labeled this drop wave $i$. We are now rallying in a corrective pattern, which is likely NOT complete at the 95.68 high, and have labeled this wave $ii$.
We have also shown a possible 3 wave irregular type corrective pattern, for wave $ii$, on the Daily USDX Chart and this pattern is suggesting one more push back to the 95.68 high to complete all of wave $ii$.
The retracement levels for this corrective pattern are:
50% = 95.60;
61.8% = 95.90.
The other option is that wave $ii$ did end at the 95.68 high, and that wave $iii$ lower is underway.
The challenge we are having with that scenario is that on the Intraday Charts the drop from 95.68 to the current low of 94.18 currently looks more corrective that impulsive which is why are still suggesting a possible rally back to the 95.68 before all of wave $ii$ ends.
The end of wave $ii$ will be followed by a sharp move lower in wave $iii$.
It looks like all of wave (ii) is complete at the 96.87 high and that we have started wave (iii) lower. Our first projections for its completion is:
(iii) = 1.618(i) = 71.52.
We expect that wave (iii) will develop into a multi-month impulsive sequence of which we are currently working on its initial stages.
Trading Recommendation: Stay short at 95.30, risking to 96.90.
Active Positions: We are short at 95.30, risking to 96.90!
Free Offer For Web Readers: Please send me an Email to [email protected] and I’ll send you my free report on GDX! I highlight both the short-term and long-term wave counts, including the key launchpad number I’m looking at to send most of the world’s gold stocks blasting higher!
Captain Ewave & Crew!
Email: [email protected]
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