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In my last note, we looked at the move up from 19 to 26 June (circled in chart) and noted that it was a three wave structure and as such was likely to be countertrend. In other words, it was likely not an impulsive start to a meaningful upside reversal. Because a big move cannot start with a three wave correction, it must be five waves.
Price tapped out at the down sloping internal trendline on 8 July and over the weekend, it started falling back to the top of the early May downtrend line and the local uptrend line from 19 June. So technically, there is still some potential support just lower and the big bullish engulfing candle is still a meaningful roadblock to runaway downside, but if there is a break below c. US$1,110 here then we must expect a challenge to the previous US$880 handle.
