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Precious Metals and the U.S. Dollar (DXY):I keep thinking that the 3% plunge in Gold (GLD) and the near 5% plunge in Silver (SLV) are a liquidation event into the end of the quarter in reaction to last week's parabolic spike in 10-year YIELD from 4.93% to 5.23%. A risk-off reflex action ahead of the start of Q4...That said, however, I also think that Wednesday's PCE Inflation report for August is the next significant headline risk (reward) for precious metals. If PCE comes in cooler than expected, then YIELD and the Dollar should moderate and the PMs should catch a bid.
Today the market moved higher only to move back lower in the afternoon session. That move up and then back down left us with three waves off of yesterday's low, so we still do not have confirmation that a bottom is in place for all of wave b. The move down off of today's high also counts best as three waves on the smaller timeframe, which does not yet confirm a local top either.This leaves us trading in a bit of no-man's-land on the smaller timeframes.
With today’s drop to lower lows during this pullback, I think the market is taking the ending diagonal path to complete the c-wave of the (y) wave in a bigger b-wave pullback. Yes, I know, this structure has gotten quite complex.But, even within this complex structure, the ideal path suggests one more low to the 7632-7643ES region. Let me explain.If this is indeed an ending diagonal for the c-wave of the (y) wave, today we bottomed at the 1.236 extension of waves i-ii in that structure, which is typical for wave iii in a diagonal.
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