Loading the Cannon - Gold Positioning for Major Rally
Updated
Over the past few weeks gold has been in a corrective phase following the Brexit wave, which in our counts has reached the top of a 5 wave impulse cycle. This five wave cycle is, at the highest cycle levels, corrective in structure following the long descent of the past 6 years. This corrective structure indicates to us there is a high likelihood for the near to medium term to see bearishness in the market. However, it is important to remember that we are VERY BULLISH on gold in the long term, and we see a large bat pattern forming. We expect a return to 1260 over the next few weeks or months, and after that we do expect to resume the rise. We would not be surprised if the elections and the bear market we expect to come soon in stocks to affect this rise in gold.
It is possible that when we break the trend resistance line we will see a considerable drop, far below 1260. This is due to the corrective structure at the highest cycles. Please trade safely and remember to control your risk.
It is possible that when we break the trend resistance line we will see a considerable drop, far below 1260. This is due to the corrective structure at the highest cycles. Please trade safely and remember to control your risk.
Note
We have wandered farther than we expected, but we also have noticed the bears still have not recognized the market is going down. They are buying as the moving averages pass by the market, causing false rallies. Yesterday before the FOMC the bottom was dropping out of the market, but the news released by the Fed delayed the move for a day or three. We have now officially closed outside the triangle in a bearish direction. We should see confirmation on Monday and/or Tuesday. We closed at major resistance, however, so Sunday evening I expect a short rally.We have rode this bucking bronco for longer than previously expected, but that's okay because we are finally (hopefully) beginning to see the payoff for our patience.
Note
Nailed this one, but a few weeks later than expected. :-)
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