It is always a good idea to look back in time, to see how things fit together from the larger perspective. In this case I am showing you a perspective from a Cycle degree linear chart setting. This shows that the 2011 peak may be a Primary degree wave 3 top, and the bear market which will be about 5 years long this fall, would be an “ABC” crash with and ending diagonal. Our present rally from late 2015 would be a diagonal wave 3-4 in Minor degree with one more diagonal wave 5 to go. Ending diagonals, develop on the tips of “C” waves, so that would also be a fitting pattern to the end of a bear market. Ending diagonals are real confidence boosters for me, but we have to be very careful so not to be too subjective.
I look at everything from a Cycle degree perspective, and hunting the 5 waves in Cycle degree is my sole purpose as without them being confirmed, “no” SC or GSC degree wave count can exist on this planet!
Gold would have to suffer through one more decline with a length impossible to count out at this time, but any new low below $1050 would help to confirm it. As I have mentioned many times the pattern changed in mid 2013 which would be the beginning of the ending diagonal. The late 2015 bottom didn’t stop anywhere important as it didn’t even stop at a potential previous 4th wave dip. Gold is declining as I post and I would expect it to still swing widely as job reports come out.
I scratch my head all the time as the world brags that commodities run on supply and demand yet they act the complete opposite at the extremes. In 1980 they said gold was going to $2000 yet it crashed to $300 a few years later. Then when everybody was dumping gold in 1999 gold turns and goes on a massive bull market defying all logic.
All the banks and countries were selling gold, and funds were unloading gold stocks as fast as they could, yet a gold bull market was born.
Then in 2011 when all the banks and investors have been buying and told gold is going to $5000 or $10000, it turns and starts on a major bear market. Now the whole situation may become reversed one more time if the ending diagonal gets confirmed. Contrarians know this is how the markets work and they don’t need any Elliott Wave to tell them so. Some of the gold stock ETFs have seen 100% gains in just 4 months or so. I bet very few Elliottitions saw it coming and were in position before it surged.
Short term I am very bearish, but with the potential of this wave count we can see a bull gold party coming. It still may take 2016 to play out, but it will be a new story once this bear market has completed.