Gold gets a small boost as modeled.

Check this last gold update out where I modeled one last little blip up in gold before it turns back down.  This morning it looks like we got that blip.  So now it is crunch time for the gold model.   The market will either confirm or deny the model very quickly now.   Remember, that down sloping line I drew was only based on 1 point.  In other words, totally an educated guess based on:

1. The 3 wave stutter of the chart since June.
2. The theory that this will result in an ending diagonal.
3. The fact that the current wave is also probably going to be an A-B-C and that C is almost complete.

Models do not truths make.  They are just things to be on the lookout for so that there is no surprise when they occur.   They also allow the setting of trigger levels such that, if exceeded, action can be taken with a higher confidence than someone just trying to follow the squiggles and applying gut feeling or, even worse, fake, Ponzi pumped "fundamentals".

Now, back to the charts. In the last chart there is an embedded note that says if the chart breaks out above the old high that the odds of the ending diagonal model start to go down.  While that is still true, "odds start to go down" is not the same thing as "model is bust". 

While the original assumption was that the 5th of C in these ending diagonals usually has a declining double top, that is not a strict requirement.  It is actually more correct from a pure EW perspective to have the fully expressed 5 waves up.   Here's the recent bounce since December.  The heavy red line was my model.  I expected a failed 5th wave into blue C.  Instead, because of the Crimea situation, we have a slightly higher value of $129.88.  That is not a breakout by any means, not yet.  The horizontal grey lines indicate the length of the 1st of C.  When the 3rd wave is extended in a wave (as it was in this C wave), the lengths of wave 1 and 5 are supposed to be approximately equal.  So, the GLD price is right now almost exactly at that EW guideline level.    If it goes past perhaps 131 then it starts to get quite distorted and if it gaps up from here then the ending diagonal model begins to fall apart very, very quickly.

Because of all this, GLD is at a critical level which will likely set its direction for the next month.  I'm still modeling that the ending diagonal holds but we have to go where the chart takes us.  A couple more points on GLD and it's going to get away from the gold bears.