Let us check the "King's" chart first to see what's happening.
I switched to a smaller time frame to focus on the current leg down, as we saw on the chart before.
The U.S. dollar index (DXY) is building a slightly up-sloping sideways consolidation (orange channel). I think we can see another leg up to touch both the upside of the orange channel and the trendline resistance of the black dashed downtrend. This area around 91.5 would offer double resistance.
Once this consolidation completes, we could see the downside's continuation, as shown with the red zigzag down. The target area remains intact in the valley of the last large leg down at 88.25. Let us see if the power of trends could contain the current move down until the very end.
It is time to get to the "main dish" as it is almost ready. I am talking about gold, of course.
Gold has booked the first strong move up, and now we see a retracement, which could give an excellent chance to join the bulls. I think we have the first leg down of the corrective structure (red "1"). Now the market builds the junction between leg 1 and upcoming leg 2 within a sideways consolidation. We could see another spike higher in the $1850-1860 range before the move down resumes.
The Fibonacci retracement area (blue box) could help us pinpoint a buying opportunity area. The 61.8% sits at $1807, and the next 78.6% is located at $1788. The former coincides with the area where leg 2 is equal to leg 1, and this is how the magic of reading the structure works.
Why then should we consider the lower retracement level of 78.6%? The thing is that the finishing legs are quite often rapid, scary, and impulsive by nature. The so-called "whales" could take this chance to wash out "weak hands," forcing them to quit while buying their liquidation lower. Be careful.
The size of the risk of buying on the dip is equal to the distance between the entry-level in the blue box and the invalidation point, which is located in the valley of the growth point ($1765). Mind this before entry.
Cautious traders could enter only when the price will cross the peak of the former move up beyond the $1875. Those who will buy earlier on the dip should consider moving the stop loss to the valley of leg 2 to decrease the risk.
Most of your votes on the possible target area were split evenly between the old target of $2152 and the new Pitchfork based aim of $2400. It looks like you are ultra-bullish.
Now, let us see the updated silver chart.
Silver could be either a "dark horse" or a "wounded horse" as the structure was not properly completed. It could follow gold or build a Bearish scenario until the next structure emerges. Therefore, I will show you both paths on the chart.
To elaborate on the bigger map with the Bearish scenario that I shared with you last time, I switched to a smaller 4-hour time frame. Sideways consolidations are typical, and quite often, the structure of the legs could repeat. That is why I cloned the green rectangle area of the first leg up to the right in a green bar pattern considering the time elapsed in leg 2.
The final point is located around $26.3. It means that we should watch closely how the price would behave in the area between $26 and $26.5 to see if this would be an end of consolidation or we will see the continuation beyond this area. If the price fails to overcome that barrier, then another leg down to tag the valley of $21.64 and complete the correction could start.
I saw that most readers think that silver will go hand in hand with the mighty gold. For that reason, I added the same buy setup as I prepared on the gold chart. The "buy on dip" area is located between $22.5 (78.6%) and 23.00 (61.8%). Consider cutting the risk below the former valley of $21.64.
INO.com Contributor, Metals
Disclosure: This contributor has no positions in any stocks mentioned in this article. This article is the opinion of the contributor themselves. The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. This contributor is not receiving compensation (other than from INO.com) for their opinion.