Today's decline is close to completing 5 waves down from Friday's high. There is the slight possibility that could be the end of the correction, but all of the other evidence is pointing to more downside. We should, however, see a small bounce before the downtrend continues.
Gold may rally from here before the downtrend continues, but expect downside surprises. A continuation in the decline to the 900 level from here will solidify the downtrend and point to very much lower prices in the future.
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Yesterday, i commented "IF we were to rally up in a choppy manner like we did last Thurs thru Fri on the hourly charts TIL Weds Fed minutes, that would be very bearish for the next move down."
From the 6/11 high that would have looked like a wave 1 followed by an "abc" on the hourly charts.
With yesterday & today's decline, instead it looks like wave 1; wave 2 (last Thurs thru Fri); followed by a subwave 1; followed by a subwave 2.
Either scenario puts us into a wave 3. The difference is earlier or later in wave 3.
This would also be suggested by yesterday/today's low being confirmed by RSI & ROC on daily charts.
More importantly, there has been technical damage done on weekly charts. This damage can be reversed by a strong rally since it is still early in the week.
Regards,
dave
The wave count could very well be 1,2,i,ii.
I think the thing we need to be cautious about, and what I have been waiting for, for weeks, is that this could be wave c of B, C of X, depending on how you count it.
If wave iii down is next, it will be probably mark the majority of the down move as waves iv, v, and 4,5 will probably be choppy and only marginally lower.
That, in my mind, will be the time to buy the "Summer Rally".
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