Gold had created one wild ride up and not has started to decline. In a few weeks or so nobody will remember why gold shot up so fast. Can you nail the exact fundamental reason why gold shot up?
Your answer may be in Europe, but it is not something you can count on.
If gold retraces this entire 5th wave move than any so called fundamental reason was completely irrelevant.
At this time it looks like a very good impulse decline and we have to see if the next leg down develops. The $1262 price level would be critical support, but price is not as important as the pattern is. Any 5th wave that may develop could have an extension in it which most of the time is impossible to know beforehand. It is only when wave 1 and wave 3 are about the same length, then the 5th wave has the biggest odds of extending.
The gold bull market had an ugly start, which means that the impulse wave structure starting out just sucked! Unless this decline starts to do wild moves to the side and falls out of character to the impulse, I have to keep a potential impulse decline as my main wave count. We could get a
zigzag thrown in for good luck, but only more time will clear that up.
I will try and explain what to expect most of the time, even if I end up being wrong, because it helps to recognize something early when it does veer off course too much. It is all about the process of elimination, and most of the time we have to run with a wave count to trash it.
I did not start this blog to give you mindless trade setups, but I like to catch turnings that force all the players to bail out.
At anytime there are a minimum of 5 probabilities, specific to the degree that the markets can move in and it feels like as soon as 4 have been eliminated another 4 pop up.
As I post gold has already crashed down to the $1256 price level!