XAU - - MORE CORRECTION TO GO.

A jagged stair step decline from the high (180.93) established on Oct. 14 to Thursday's low (171.18) has resulted in a 5.4 percent decline.

Friday's closing price (172.09) is at previous support, and on the two (2) prior occasions resulted in sharp four (4) to five (5) percent bounces. Another minor bounce may result from here, but the XAU appears initially headed to 167.19 where Fibonacci Cluster Support (167.19) can be found around the "89" line. (See 89 min XAU chart, http://www.feargreed.com/89xau1025.html)

However, at this point, the XAU is only about a third of the way through its correction, which could take the market to a maximum 150.30, although from our perspective 161.57 to 156.52 seems a more plausable terminal point, by the end of December. (See Daily XAU chart, http://www.feargreed.com/Dxau1025.html)

Reasons for continuing market correction now.

1. A multi week Bearish VDI has developed, as the recent market advance to new recovery highs was not accompanied by sufficient upside volume to support the advancement in price. Historically, this usually results in a correction greater than five (5) percent, and any subsequent advance to new highs needs Bullish VDI to support it.

2. The second missing ingredient for a push to new highs is for the XAU to develop Bullish Momentum Divergences, which almost always precedes a bull move. This may take several more weeks to complete.

Reasons for a "monster" move after the correction runs its course.

1. Every long term trend (Daily, Weekly, Monthly) sits comfortably above their respective "89" lines.

2. Our Weekly ADX histogram has traded to a threshold levels where big moves begin. We've seen this repeatedly in all markets once these threshold levels are met, most recently in the XAU, in a bullish move from 145.82 to 209.27 (44 percent), and a bearish move 188.73 to 63.52 (66 percent). An average long term move could take the XAU to the 240 level, comfortably surpassing the old high (209.27).