Per our discussion in Monday's STU, [Gold] is tracing out five waves down from the $1255.61 high on October 21. Today's sharp drop to $1137.65 either marks the end of wave v (circle) of 1 or prices will end this wave with one more modest new low. The key point is that the completion of five waves down will lead to the largest countertrend rally since the July 10 high at $1345.30. It will be a rally of at least $40 and could be upwards of $100 or more. The Daily Sentiment Index (trade-futures.com) has been below 10% bulls for four straight days and the 5-day average is now 7.6%, its lowest level since near the end of wave iii (circle) in early October. Wave iv (circle) was a $72 rally to the October 21 high. If prices do have one more decline to complete the impulse pattern, the next target range is $1105-$1121.