Volatility Ahead Prior to Explosive Move Higher

Nothing is guaranteed, but when extremes and divergences are crystal clear across multiple tools, you can have a high degree of success in picking peaks and troughs, such as the bottom in Gold in October and the peak on Monday. This is what my FIPEST process is all about. Whereas trying to determine the next direction in between such extremes is more difficult, with the aid of Elliott Waves, this is my expectation for Gold next.

Gold Price

Gold is wave (3) of 5 now. We just completed wave i at 2151 on Monday, and now we’re waiting for the bottom of wave ii. Corrections such as this are typically in three major waves: A down, B up, and then C down to complete wave ii.

I believe wave A has completed at 2018. Next is wave B, which is somewhere between 2070-2100. From my perspective, it doesn’t really matter where B peaks because my focus is on the bottom in wave C or ii. Once we have the peak in B, I can provide specific targets on the downside. For now, somewhere between 2000 and the 200-day moving average around 1960 is a highly probable target. But depending on where B tops out, it could be lower.

The importance of the bottom in wave ii cannot be overstated because what follows is wave iii of (3), the money wave. The wave ii low is where I plan to load up. You don’t want to miss that train.

Silver Price

The overall picture in Silver is more or less the same as that in Gold, unsurprisingly. Silver just completed its wave i at 26.34, and now it is heading down in wave ii.

Silver has hit a low of 24.21. I’m not sure if Silver has bottomed in wave A yet, but if it hasn’t, there’s only a few pennies left on the downside. Next comes wave B up to a peak somewhere between 24.80-25.00, best guess. Once we have the actual peak in B, we can provide more concrete targets on the downside in C. Best guess right now is somewhere between 23-24, perhaps even a 22 handle, for the bottom in C / ii. Then get ready for liftoff, imho.

FUNDAMENTALS

There are several key data points in the next six days that could act as catalysts for the peak in B, drop in C, and blast off in iii of (3):

Anything significant from the FOMC will likely be in the conference call because there is a 99% probability that the Fed does not change interest rates next week:

Going to be a volatile week or two prior to the takeoff in the metals. Fun times ahead.