Gold: Is The Reaction Over?

Gold:

Update & Tactics:

Wave ^iv^ continues to develop although we have now dropped below our 50% retracement level which is:

50%= 1874.80.

The drop from the 2077.90 high to the current low of 1851.00 is clearly a corrective pattern, but it might not be a wave ^iv^, due to the depth of the retracement.

It looks more like a wave $ii$.

We have shown a possible very bullish alternate count for gold that is suggesting that we are still rallying in a subdividing wave ^iii^ where only wave $i$ ended at the 2077.90 high and we are now falling in wave $ii$, which has the following retracement levels:

50% = 1826.70;

61.8% = 1767.70.

For the time being will stay with our current count that is suggesting that wave ^iv^ should be ending very soon, if it has not already done so at the 1852.00 low.

A break and close above the wave $a$ low of 1874.20, would be a first good sign for the bulls.

After wave $c$ and all of wave ^iv^ ends we expect gold to start rallying again in wave ^v^. Should gold drop then we will likely move to our alternate count.

Wave ^v^ and all of wave *iii* have a current projected endpoint of :

*iii* = 1.618*i* = 2306.30.

We have higher projections also.

Trading Recommendation: Go long gold. Use puts as stops.

Active Positions: We are long, with puts as stops!

Silver:

Update & Tactics:

We are having some doubts as to whether the current correction is wave -iv- of (i), due to the depth of the retracement.

We are now starting to think that we are still rallying in wave -iii- and that within wave -iii- we completed wave *i* at 29.91, and perhaps all of wave *ii* at the 21.51 low.

If that is the case then our retracement levels for wave *ii* would be:

50% = 22.24;

61.8% = 20.42.

We have now entered that retracement zone!

The other option could be that all of wave (i) ended at the 29.91 high and that we are now falling in wave (ii). In this count our retracement levels for all of wave (ii) are:

50% = 20.78;

61.8% = 18.62.

For the time being we will stick with our current analysis and suspect that all or most of this deep wave -iv- correction is complete or almost complete at the 21.81 low.

If that is the case then we should soon start to rally higher in wave -v- of (i).

A break and close above the wave *a* low of 23.58 would be a first good sign for the bulls.

Trading Recommendation: Go long, using a put as a stop.

Active Positions: Long, using a put as a stop!

S&P500:

Update & Tactics:

Longer term we continue to rally in wave (iii), which has an initial projected endpoint of :

(iii) = 1.618(i) = 4001.14.

Within wave (iii), it looks we completed wave .iii. of -iii- of  (iii) at the 3568.88 high and we are now falling in wave .iv., although this retracement has now exceeded 50% which is pretty deep for a wave .iv. correction.



We cannot drop below the wave .i. high of 3153.55 for our current analysis to remain valid, so we need to continue to move higher.

Wave .iv. could still become more complex… and perhaps form a bullish triangle.

Our projected endpoint for all of wave -iii- is:

-iii- = 1.618-i- = 3710.44.                                                 

Trading Recommendation: Flat.

Active Positions: Flat!

Free Offer For 321Gold Readers: Please send me an Email to [email protected] and I’ll send you our free GDX & Key Miners Blastoff” report. We highlight bullish wave counts for GDX with some surprising upside targets!

email: [email protected]
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