There is not a lot to add in this mid-week update.
As you saw from the charts over the weekend, we were looking for a bounce in the market, especially since the GLD struck the 1.236 extension to the downside, which is the standard target for wave (iii) of iii. Therefore, my ideal count was looking for a wave (iv) bounce within wave iii down in the GLD. Today, we saw that bounce.
As you also saw, the resistance zone we identified on our GLD chart had the upper most resistance at 115.20. Today, we challenged that resistance. And, quite simply, as long as this resistance holds, then I am looking for wave (v) of iii to the downside, into the 112 region. Moreover, should we continue targeting the standard targets to the downside, we will likely see a double bottom in the GLD in the 109-110 region for all 5 waves down.
However, if the GLD is unable to hold this resistance, then it puts us into a bit of a mess. A further rally can either suggest that this downside structure is morphing into an ending diagonal for this last 5th wave, or it can set up a rally back up towards the 118.25 region for a bigger 4th wave, or it can suggest we have already bottomed in the GLD.
I would rather not have to address any of these alternatives, but my suspicion would be that we are dealing with an ending diagonal to the downside if we were to break this immediate resistance region.
I also want to point out the silver chart, as we seem to need at least one more micro 5th wave to complete this long term pullback. Once we see an impulsive structure through the 15.25 region (as noted by the lowered resistance region on the chart), then we have a strong indication that this market has finally bottomed, and a major rally is in progress.
The only other specific issue I want to address this evening is the ABX. It invalidated the IMMEDIATE set up for the 15 region when it broke below 12.32. However, as I noted in an update this week, even though it invalidated the immediate set up, the current structure may be a 4th wave consolidation, and we may see another set up develop for a 5th wave higher. As it stands right now, I do not have such a set up in place. So, at least for now, I have to assume we are in wave (ii).