Source: thewavetrading: GOLD: Follow of the short-term EWP | The wave trading

Last Friday I posted on Twitter / Stocktwits a potential complete wedge from the October 2011 peak. Within the likely Double Zig Zag from the September 2011 top, a wedge in this case would be equal to a Leading Diagonal wave (I) since price should have bagan the impulsive wave (Y) from the October peak.

In the GLD daily chart below we can see that the wave (V) of the assumed Leading Diagonal has truncated last Friday (Not in the case of the future contract which established a lower low).

Bulls have to act decisively since they have a huge obstacle to overcome at the 200 dma which coincides with Thursday´s gap down at 161.20

If they are able to reclaim the 200 dma then the odds that the Leading Diagonal is over despite having truncated the fifth wave, will increase substantially opening the door to a Fibonacci retracement. Probably the 0.5 retracement which coincides with the upper Bollinger Band could be a likely candidate for a wave (2) rebound.

The positive divergence of the daily RSI strengthens the short term bullish scenario although if price is involved in the initial stages of a wave (2) rebound the RSI has to confirm it by breaking the trend line resistance in force since the September 2012 peak