Coming into this week, I had wanted to see the metals spend more time in this consolidation to develop a better bottoming set up. And, thus far, that is what they have been doing.
So, I am going to keep this update rather simple. As you can see from the attached 8-minute GLD chart, I am still counting this consolidation as a wave iv in the 5th wave of the final c-wave of wave 2. That count is applicable to all the charts we follow, so it seems the complex is pretty much aligned at this point.
While the GLD can still spend even more time in this wave iv, I think we have enough structure and time for an appropriate wave iv of this degree. Moreover, enough action has developed to provide us with a nice positive divergence lower low in the technicals we follow. And, as I discussed over the weekend, the resistance region noted on the GLD represents a 4th wave within an ending diagonal, which is why it has come up this high relative to the rest of the structure.
It will still take an impulsive rally through 118.30 to give us a better indication that this longer term correction has finally run its course. But, until then, nothing has changed from my detailed weekend update, and I am still expecting another drop in the coming week or so.
The one thing that has changed is the ABX. The deeper drop in the ABX has left very little room for the current count. In fact, while I can accept just a few cents lower to complete this deeper c-wave, if we see much more than another small drop – which should be followed by a strong reversal - then it starts becoming likely that there is a lower low sitting out there for wave ii. However, based upon this current downside structure, it does not look like any lower low will be more than a nominal lower low before this reverses strongly.