Gold finished the Micro degree wave 1 up within an extending Minuette v up on May 12th at $730.40. The correction since is a Submicro degree zigzag {a}-down, {b}-up, {c}-down, with wave {c} down in process. Once Micro 2 down completes, Gold should rally into Micro 3 up of v. Unless Gold drops below $450, this wave count labeling holds up. Where it breaks down is if the correction underway Drops below the Minor degree wave 3 top from December 2004. In that case, the labeling would change to consider the May 12th top as the top of Intermediate degree wave 1 that started back in August of 1999, and the correction as Intermediate 2 down, a large degree correction. We do not see that happening in this monetary inflating environment.

Should the alternate labeling be occurring, a Fibonacci .382 retrace target for Intermediate 2 down would be $550ish, and a deeper .618 retrace would take Gold down to 435ish. Any way you cut it, we remain in a major long term Bull market in Gold.

Silver finished its Minor degree wave 1 up, and the first leg of 2 down, wave "a" down. Wave b up is underway, and the first two sub-waves of that, Micro a-up and b-down look complete. Next should be c-up of b-up, then a final decline into a wave 2 bottom, wave c-down. A Fibonacci .382 retrace would take Silver back down to $11.93, and down to $9.91 if a .618 retrace of 1 up occurs.

An alternate to consider for Silver is shown at the top of the next page, where all waves since last July are a degree higher than labeled, suggesting primary degree wave (1) up has just completed and a powerful correction, primary wave (2) has started. We find this scenario implausible as there is just too much monetary inflation going on right now.

Check out our Free Sample issue at www.technicalindicatorindex.com. You can receive a Free 30 day Trial Subscription by simply going to www.technicalindicatorindex.com, and clicking on the "Free 30 Day Subscription" button at the upper right of the Home Page. Once subscribed, you will have access to our remarkable buy/sell signals on the blue chip Dow Industrials and S&P 500, NASDAQ 100, or HUI Amex Gold Bugs Index. A subscription also gains you access to our daily Market Analysis Newsletters, Traders Corner, Guest Articles, and our Archives.

"Jesus answered them, "These things I have spoken to you,
that in Me you may have peace. In the world you have tribulation,
but take courage, I have overcome the world."
John 16:31, 33

The Da Vinci Code: A Quest for Answers is available at www.davinciquest.org.

Here's the color coded, legend we use for our Elliott Wave count symbols, starting from the largest degree waves to the smallest: