Gold Still In Corrective Mode

With gold following through to the downside in what seems like the (d) wave of a b-wave triangle (in purple), we are still well within the parameters of an ongoing wave [4].  In the micro structure, it does seem as though a higher of a bounce would be likely to complete the b-wave of that [d] wave, the main point is that as long as we remain below last week’s high, I am seeking a conclusion to this b-wave triangle as outlined on the 60-minute GC count.   Once that does complete, I will be looking for an initial 5-wave decline to make it likely that the c-wave down in wave (4) has begun.  And, yes, I would consider protection once we get that set up.

As of now, I am viewing the purple count as the primary, with the green count as a close alternative.   I am not seeing the yellow count as a high probability at this time, but will continue to watch for clues as to whether we break out to the upside sooner than I currently expect. For now, I still think more action and lower levels are going to be seen before wave (4) is done.

As far as silver is concerned, while I have been looking for more of a (c) wave decline in that count as well, the initial decline off last week’s high at best counted as a leading diagonal.  And, I said that I would consider adding protection on silver if we saw a convincing 5 wave decline.  Needless to say, and as I explained to my live video members earlier this week, a leading diagonal is just not convincing enough for me to short silver in any way – especially considering its upside potential.   Moreover, with the rally thereafter being so deep for a potential 2^nd wave, it does concern me about silver ability to see more of a pullback.   But, it has not invalidate the potential pattern.   We would need to breakout over last week’s high to invalidate that potential.

With that being said, I still may consider it if the decline we are seeing from the overnight high takes shape as a 5-wave decline for a potential wave i down in the 3^rd wave of the (c) wave.  As I write this on Thursday morning, we only have 3 waves down from the clearest perspective to me (as you can see on the 8-minute chart). While I can certainly “force” a 5 wave count for that decline, I do not intend to force any shorting potential on silver.  Rather, if we do indeed head lower with this set up without giving me a confident potential to hedge my positions beforehand, I will simply add to my long positions.  

GDX still needs to provide to me an impulsive break down below the 55 region to suggest that its c-wave of wave 4 is in progress.   And, again, I am still unsure whether this extension is a continuation of wave 3 or simply an expanded b-wave in an ongoing wave 4.   We will see how we break down below 55 to make that determination.  

I also want to add that the wave 5 target will likely be raised, especially based upon the size of waves (1) and (2) after we complete wave 4.

For now, I am still of the opinion that more of a correction can still be seen in the complex.  But, due to the significantly variable nature of corrective structures, we are still trying to nail down how that completion will take shape.  Yet, with silver, I am very much on my toes regarding whether it has completed its 2^nd wave, especially considering its upside potential in the next run.   And, that is why you see the green wave (2) at the last low.   But, to be honest, my preference would likely be another decline to be seen.   Yet, without solid evidence of that potential YET, and with a healthy respect for silver's upside potential, I am simply going to be holding my positions as I have them now, and will consider adding more aggressively only with another decline for the deeper (2).