After posting a medium term TA that was rather bearish, I have done a very fine-grained look at the current down-move in gold. Based on my count (feel free to disagree), gold has just completed wave (3) down and is now bouncing (after reaching very low RSI numbers) to complete wave (4) of the 5 wave move down into the high $1100s.
I have two scenarios (if wave (b) doesn't retrace >100% of wave (a), both short-term bullish but my analysis remains strongly bearish.
1. Wave (a) (and possibly wave (b) as well) has completed after the wave (3) low. Wave (a) has 5 very small sub-waves present (and there so not seem to be any impulse wave failures within that move). The bounce may be as small at a 1:1 extension of wave (a) (shown by the red dashed line), but I would be surprised if we get a simple abc correction with no wave (c) extension, or a combination that will see a significant bounce up when aggregated. This is based on: wave (2) correction was shallow and only retraced short of the 0.382 fib level. Also, given the steep decline of late, a healthy wave (4) retracement could well be on the cards.
2. The current corrective wave labelled (a) in purple may turn out to be the first sub-wave a larger 3 or 5 wave correction of wave (A) - if sub-wave (b) doesn't retrace >100% of wave (a) it could be provisionally labelled as a potential smaller degree wave 2 or ii or whatever scale you decide. This would point to a larger correction in play, right up to the lower trend-line of the wedge / triangle (in black).
Corrections can be complex and difficult to play, so I am a little on the fence on this one and might stay out to trade wave (5) down later on.
I have two scenarios (if wave (b) doesn't retrace >100% of wave (a), both short-term bullish but my analysis remains strongly bearish.
1. Wave (a) (and possibly wave (b) as well) has completed after the wave (3) low. Wave (a) has 5 very small sub-waves present (and there so not seem to be any impulse wave failures within that move). The bounce may be as small at a 1:1 extension of wave (a) (shown by the red dashed line), but I would be surprised if we get a simple abc correction with no wave (c) extension, or a combination that will see a significant bounce up when aggregated. This is based on: wave (2) correction was shallow and only retraced short of the 0.382 fib level. Also, given the steep decline of late, a healthy wave (4) retracement could well be on the cards.
2. The current corrective wave labelled (a) in purple may turn out to be the first sub-wave a larger 3 or 5 wave correction of wave (A) - if sub-wave (b) doesn't retrace >100% of wave (a) it could be provisionally labelled as a potential smaller degree wave 2 or ii or whatever scale you decide. This would point to a larger correction in play, right up to the lower trend-line of the wedge / triangle (in black).
Corrections can be complex and difficult to play, so I am a little on the fence on this one and might stay out to trade wave (5) down later on.
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Sorry to double post. I had an outage and wasnt sure if it had loaded the first time.