Buy the Dip above $1248.
As stated before, if Gold holds in the $1214 area, and especially if it spends little time below $1248, the $1550 target is firmly in play. We'd be happy with $1367, but so far the patterns Enda has laid out are sticking.
Previously stories on May 17th and June 6th laying out the Wave Counts
- Mystery Solved? Gold Over $1214 Gives $1550 as Target
- Why Gold is Up and Why $1550 is Still The Target.
My Bias: Long towards 1550 Wave Structure: ZigZag correction to the upside. Long term wave count: Topping in wave (B) at 1550 Important risk events: USD: Building Permits, Housing Starts, Prelim UoM Consumer Sentiment.
As I read it, GOLD is now sitting at a turning point to remember! Despite another decline today, I am more certain then ever of the larger bullish pattern. I can see a bullish technical picture, A bullish momentum picture, And most of all, an extremely bullish wave count. At this point, I am beginning to think that my upper target of 1550, might be too conservative!
You might be asking, what the hell are you talking about Enda! And rightly so! Consider this; Three higher lows over a 6 month period, With the wave count calling for an acceleration phase. And an incomplete pattern on the daily chart devoid of a serious impulse move for over a year at this stage. The rally I am looking for is overdue in the extreme.
In the short term I am happy for the price to decline into 1245, which marks the 61.8% retracement level of the previous wave 'i' brown. Although we are so close to that point now, I think it is wise to focus higher immediately.
For the next few days watch 1245 for support, and a rally into resistance at 1280.
Gold Now:
GOLD
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live prices HERE
Daily
EURUSD
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My Bias: short in wave 3 blue. Wave Structure: downward impulse wave 1, 2 blue Long term wave count: lower in wave 3 blue Important risk events: EUR: Final CPI y/y, ECOFIN Meetings. USD: Building Permits, Housing Starts, Prelim UoM Consumer Sentiment.
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EURUSD made all the right moves today, which is a start and serves to bring the price away from the upper invalidation line at 1.1369. But, we are not out of the woods just yet.
Todays action again registered an RSI sell signal on the 4hr chart. And we now have in place a series of three lower highs on the 4hr RSI chart. It is now much more likely that the momentum switches seriously negative as part of the momentum cycle.
On the short term chart I read 5 waves down off the recent high. This completes wave 'i' pink. What we need now is a three wave recovery into resistance at 1.1230. At that point we will have an elliott wave sell signal in place. For tomorrow and possibly Monday, Watch for a corrective rise in wave 'ii' pink. It is then game on for EURUSD.
GBPUSD
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My Bias: short below parity. Wave Structure: continuing impulsive structure to the downside in wave (5) Long term wave count: decline in wave (5) blue, below parity Important risk events: GBP: N/A. USD: Building Permits, Housing Starts, Prelim UoM Consumer Sentiment.
For the last week, we have had a sideways corrective movement in cable which has so far traced out a pretty clear flat correction wave 'ii' pink.
The decline off wednesdays high at 1.2818 shows five waves down again, labelled wave '1' grey. And right now wave '2' grey is possibly complete, we will see in the overnight session if there is one more high left in wave '2'.
The wave count now calls for a significant decline as part of wave 'iii' of (iii), And this portion of any wave count is known as the acceleration phase. The price should advance quickly now and achieve much of the decline within this part of the structure.
For tomorrow, watch for 1.2818 to hold, and a break of the low at wave '1' grey.
USDJPY
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My Bias: LONG Wave Structure: rally in wave [C] Long term wave count: wave [C] is underway, upside to above 136.00 Important risk events: JPY: BOJ Policy Rate, BOJ Press Conference. USD: Building Permits, Housing Starts, Prelim UoM Consumer Sentiment.
USDJPY rallied today in what looks like a minor third wave. WE were looking for a recoil higher to break 110.80. And we got it! The price is up about 150 points off the low. After todays rally, I am much more confident in the overall bullish wave count.
I have labelled the structure off the low as an ongoing five wave rally in wave 'i' brown. We should get a sideways correction in '4' pink and then a further rise in wave '5' pink. If that happens, wave 'ii' should follow and that should find support at about 110.30 again.
The most significant resistance level ahead lies at 111.72. The previous wave (b) green. A break above that level will set in motion a sustained run higher, Given the current wave count. This wave structure has the potential to take the price up into 119.00 without much hassle!
For tomorrow, Watch for that correction in wave '4' pink. This should be followed by another rise into resistance.
DOW JONES INDUSTRIALS
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My Bias: market topping process ongoing Wave Structure: Impulsive 5 wave structure, possibly topping in an all time high. Long term wave count: Topping in wave (5) Important risk events: USD: Building Permits, Housing Starts, Prelim UoM Consumer Sentiment.
Stocks seem to have risen in a corrective fashion today. I have labelled the rise as wave 'b' blue in a three wave decline in wave 'c' pink.
Support for wave 'c' pink lies at 21130, the previous wave 'a' pink. The price must not decline below 21070, This is the previous high at wave(i) grey shown on the 4hr chart. Remember waves (i) and (iv must not overlap.
I urge you to look at the momentum situation on both the 4hr and daily charts, it is turning very ugly, very quick. We have a flat lining RSI on the daily chart, and a lower high off an extreme reading on the 4hr chart. The upside potential is diminished by this setup. I always take note of a correlating momentum situation, But given the extended high we are now sitting at right now, it carries significantly more weight this time. This is worth keeping an eye on.
For the next few days I am still expecting wave (iv) grey to complete, and the final rally in wave (v) grey.
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