I may have to drop this wave count degree level down by one, and I also doubled the “Custom Bars” to 1000. During July I thought I would get a set of 5 waves but now even an extreme diagonal 4th wave is being pushed to the extreme.
Friday the USD dropped like a rock but at the same time we could end up with a huge open gap! The zigzag bullish run could be a bear rally and usually, any Elliott Wave bear market rally gets retraced by 100% or more.
In order for gold to keep soaring the USD has to backslide. Combine that with still horrible commercial hedger positions, we could see the USD twist and turn, up or down!
For now, the trend still seems down as some key support price levels could get trashed.
GDX has been on a wild bullish ride that many gold investors have been hoping for. What is important is the 2015-2016 gold-stock bottom as the majority thinks we are in a huge bull market that still has a long way to run.
I think we are in a “C” wave bull market and it could be a complete set of 5 waves in Minor degree. It’s still a bear market rally from an Elliott Wave perspective and the entire time investors will get convinced to jump onto the gold stock bandwagon!
When wave 3 comes then all these “New Riders” will get thrown off when the 4th wave bearish phase becomes obvious. The 4th wave could also end up being a triangle which dictates the coming end of a this Minor degree run.
The Fibonacci $34, $55 price levels will supply resistance levels with $65 being a possible maximum.
The Gold/GDX ratio sits at 50.1 which should continue to compress as this bullish cycle keeps going. 50.1 is the most expensive ratio this year with 30:1 being the most extreme reading I have recorded.
GDX is in a bullish mood as solar cycle 24 is still crashing and the start of solar cycle 25 can cause all gold and gold stocks to reverse and crash. If this invisible 5 wave sequence comes true, then I think the impending bear market would be another 5 waves down in Intermediate degree.
I have a few penny stocks with exposure to gold and they have acted very bullishly, which also helps to confirm the bigger bullish trend!