I’ve made some adjustments to the wave count at this time. The big question is, “Is this rally a Bear Rally”? I like to think it is but only time can answer that question. A Gold crash below $1160 would give us an answer.
First gold has to show us what the $1200 price level will do, as even numbers seemed to be a crowd psychology thing. Crossing the $1200 price level could get the gold bulls very worried and a new rush of protective sell stops could get triggered.
At the $1350 price level another right shoulder will form and if there still is a big bullish gold price move, then the right shoulder will not hold. In the last few years, we’ve had a few H&S patterns and they all have pushed gold prices back down. Last week commercials made some bullish moves but they are still net short by a wide margin.
In little over 5 months, gold moved up $175, but they are forgetting that gold has an ugly history of crashing $100-$200 as well.
If investors are running to gold for a safe-haven to hide in, then that’s an emotional move, not a logical move.
Gold has also come to a screeching halt as it bounces around the 50-day MA line. Gold is still under the influence of a golden cross and gold would have to crash through the $1240 price level for us to witness a new death cross.
On a weekly chart, the new death cross is only about $20 apart!