Gold has rallied to an ATH on uncertainty in the markets extending the bear market rally...


The price of gold got a big boost in March at the time Corona virus was being unleashed on the country, and world. The markets hate uncertainty more than anything else and the virus along with economic ramifications has definitely created uncertainty. This is why people flocked into gold!

Even with this event taking place it didn't do very much to effect the long term chart patterns other than to extend price and time. Fundamental events never start a new trend....they only help the current wave formation that is already being played out.

The last updates we did on the long term gold chart showed that we were watching a large "intermediate" degree wave (C) rally that when complete would finish the "primary" wave [B] that began in December 2015.

The decline from the all time high in 2011 counted at the time as a perfect five waves. In late 2014 and early 2015 an "ending diagonal" as wave (5) of [A] competed and started a very expected large three wave corrective rally within a new bear market that started from the 2015 top.

The third leg of this rally began from the low made in August 2018. It looked complete as five waves early this year to end the five year long correction. Then we started hearing about Corna and price started extending higher.

So, what does this do to the original scenario...in a video on our channel we noted that if the extended rally made a new all time high that it would change the decline from 2011 to 2015 to three waves and not five. This new count is shown on the chart now as (W) (X) (Y) instead of five to end wave [A].

Under the original wave count the five waves down wouldn't allow for a new high during the bear market rally, but three waves does. Now, we can count this new high as an "irregular" wave [B] that will eventually be part of a "running flat" or "expanding flat" formation once the next leg down completes.

The weekly chart shows two wave [C]'s on the right. The pending decline can retrace most of the five year rally but, not go below the wave [A] low in 2015... this would form the "running flat."
The lower wave [C] would move below the wave [A] to form the "expanding flat" formation.

Once the move down starts we'll be able to follow the sub-divisions form a five wave structure which is required

The daily chart shows how the short term sub-waves are unfolding. From the March low price started another impulse five wave rally with wave [iii] making a new all time high this week. But, from there price reversed and fell over 200 dollars....the new highs made traders nervous.

Technically, although very large, the price drop didn't do any technical damage or violate the short term count. So, for now, we've labeled the drop as wave [iv] that will lead to another rally as wave [v] to complete five waves of C of an A-B-C for wave (Y) to further complete wave [B] from 2015.

The only alternate scenario is that it's possible to count the move already complete at the high. The alternate counts shown on the chart that a double three formation labeled W-X-Y to complete (Y) is already in place. This would be confirmed if price declines further from here and over-laps the top of [i] indicated by the horizontal red line and the down arrow.

In summary; watching for another rally to marginal new highs again to complete the long bear market rally...or a decline now to validate the top and start of a large five wave move down. This move down will wash out all the bulls that have invested to early and set up social mood for the next real bull market as a "cycle" wave III begins



Follow the Trend
and
"Trade Safe"

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