Monthly Archives: December 2014

GOLD Elliott Wave Technical Analysis – 31st December, 2014

The alternate Elliott wave count was confirmed with a new low below 1,190.96. The main Elliott wave count was invalidated, and will now be discarded.

Continue reading GOLD Elliott Wave Technical Analysis – 31st December, 2014

GOLD Elliott Wave Technical Analysis – 29th December, 2014

Downwards movement was not expected and has invalidated the hourly Elliott wave count. The Elliott wave count is changed slightly, but the mid term picture and target remains the same.

Continue reading GOLD Elliott Wave Technical Analysis – 29th December, 2014

GOLD Elliott Wave Technical Analysis – 26th December, 2014

Upwards movement was expected. The main Elliott wave count is confirmed, and the alternate Elliott wave count which was judged to have a very low probability was invalidated.

Continue reading GOLD Elliott Wave Technical Analysis – 26th December, 2014

GOLD Elliott Wave Technical Analysis – 24th December, 2014

Christmas Eve was quiet, as expected, with a small red candlestick. Price remains above the invalidation point on the main hourly Elliott wave chart, which has increased in probability.

Continue reading GOLD Elliott Wave Technical Analysis – 24th December, 2014

GOLD Elliott Wave Technical Analysis – 23rd December, 2014

Sideways movement is completing a small red doji for Tuesday’s session. Downwards movement fell 8.83 short of the target.

Summary: It is most likely a third wave up has just begun. First confirmation will come with a clear breach of the orange channel on the hourly chart. Thereafter, price confirmation would come with a new high above 1,198.24. The target is at 1,278. Alternatively, a new low below 1,170.83 would indicate downwards movement may continue further to a target at 1,140, but not below 1,131.09.

Note: Tomorrow’s analysis must be prepared by me during my Christmas Day (my time zone is +13GMT). Because it’s Christmas I’ll prepare text and charts only. There will be no video tomorrow. I expect the markets will be very quiet during Christmas Eve anyway. Merry Christmas everyone!

Click on charts to enlarge

Gold Elliott Wave Chart Daily 2014

Primary wave 4 is complete and primary wave 5 is unfolding. Primary wave 5 may only subdivide as an impulse or an ending diagonal. So far it looks most likely to be an impulse.

Within primary wave 5 intermediate wave (1) fits perfectly as an impulse. There is perfect alternation within intermediate wave (1): minor wave 2 is a deep zigzag lasting a Fibonacci five days and minor wave 4 is a shallow triangle lasting a Fibonacci eight days, 1.618 the duration of minor wave 2. Minor wave 3 is 9.65 longer than 1.618 the length of minor wave 1, and minor wave 5 is just 0.51 short of 0.618 the length of minor wave 1. I am confident this movement is one complete impulse.

Intermediate wave (2) is an incomplete expanded flat correction. Within it minor wave A is a double zigzag. The downwards wave labelled minor wave B has a corrective count of seven and subdivides perfectly as a zigzag. Minor wave B is a 172% correction of minor wave A. This is longer than the maximum common length for a B wave within a flat correction at 138%, but within the allowable range of twice the length of minor wave A. Minor wave C may not exhibit a Fibonacci ratio to minor wave A, and I think the target for it to end would best be calculated at minute degree. At this stage I would expect intermediate wave (2) to end close to the 0.618 Fibonacci ratio of intermediate wave (1) at 1,283.27.

Intermediate wave (1) lasted a Fibonacci 13 weeks. If intermediate wave (2) exhibits a Fibonacci duration it may be 13 weeks to be even with intermediate wave (1). Intermediate wave (2) is now in its tenth week.

So far within minor wave C the highest volume is on three up days. This supports the idea that at this stage the trend remains up.

See the most recent Historic Analysis to see the long term channel about this whole downwards movement. The channel does not copy over to the daily chart when I put the daily chart on an arithmetic scale, so this channel must be drawn on a weekly chart on a semi log scale. The upper edge of that channel may be where intermediate wave (2) finally ends. I would not expect the upper edge of this channel to be breached.

The target for primary wave 5 at this stage remains the same. At 956.97 it would reach equality in length with primary wave 1. At this stage because primary wave 5 is taking its time it may not be a typical short brief fifth wave following a triangle, and so I have a little more confidence in this target.

Within minor wave C minute wave i subdivides perfectly as a leading contracting diagonal. When leading diagonals unfold in first wave positions they are normally followed by very deep second wave corrections. There is a nice example here on the daily chart: at the top left of the chart minor wave 1 was a leading contracting diagonal and it was followed by a deep 65% zigzag for minor wave 2. Minute wave ii is now deep, just below the 0.618 Fibonacci ratio of minute wave i. Minute wave iii has most likely now begun.

I do not think that minor wave C is complete at the high of 1,238 as an ending contracting diagonal for three reasons:

1. Intermediate wave (2) would be a very rare running flat correction.

2. Minor wave C would be substantially truncated, by $17.

3. This structure does not subdivide well as an ending diagonal because the third and fifth waves do not fit well as zigzags. Within an ending diagonal all the sub waves must be zigzags.

Minute wave ii may not move beyond the start of minute wave i below 1,138.19.

Intermediate wave (2) may not move beyond the start of intermediate wave (1) above 1,345.22. I have confidence this price point will not be passed because the structure of primary wave 5 is incomplete because downwards movement from the end of the triangle of primary wave 4 does not fit well as either a complete impulse nor an ending diagonal.

To see a prior example of an expanded flat correction for Gold on the daily chart, and an explanation of this structure, go here.

I do not want to publish a wave count which sees primary wave 5 complete at the low of 1,131.09. This downwards movement does not fit well at all as a complete five wave impulse. There would be inadequate alternation between the single zigzag of the second wave and the double zigzag of the fourth wave correction, and there would be no Fibonacci ratios between the first, third and fifth waves within it.

Main Hourly Wave Count

GOLD Elliott Wave Chart 2014

Minute wave ii may have ended very close to the 0.618 Fibonacci ratio of minute wave i, falling short of the target. There is no Fibonacci ratio between subminuette waves a and c within this second zigzag in the double for minute wave ii. Minute wave ii is now a complete structure.

Draw a channel using Elliott’s technique about this zigzag. When the upper orange trend line is clearly breached by at least one full hourly candlestick above it and not touching it, that would be first confirmation that minute wave ii is over and minute wave iii is underway. Price confirmation would come with a new high above 1,198.24.

Minute wave iii must subdivide as an impulse. It must move above the end of minute wave i at 1,238.38. At 1,278 minute wave iii would reach equality in length with minute wave i. This target fits nicely with the higher target for minor wave C to end at 1,283.

Minute wave iii should show a strong increase in upwards momentum beyond that seen within minute wave i.

No second wave correction may move beyond the start of minute wave iii below 1,170.83.

My only small cause for concern about this wave count today is the count of the first move up from the low, because it has a cursory count of seven which is corrective. It may be as labelled though, with a first wave impulse to be followed by a combination or double flat, and with the first structure within subminuette wave ii an expanded flat. On the five minute chart this wave count fits perfectly: importantly, sub micro wave (B) upwards subdivides very clearly as a three, and subminuette wave ii would probably extend sideways in very choppy overlapping movements, taking up time.

Alternate Hourly Wave Count

GOLD Elliott Wave Chart 2014

If this wave count is confirmed with a new low below 1,170.83 I would expect three more days overall of downwards movement. That would see minute wave ii last a total Fibonacci 13 sessions and have a 0.618 duration to minute wave i.

At 1,140 subminuette wave c would reach 1.618 the length of subminuette wave a.

Minute wave ii may not move beyond the start of minute wave i below 1,131.09.

This wave count does not have quite as good a fit on the five minute chart, but on the hourly chart the upwards wave labelled micro wave 2 does have a corrective count of seven. Sideways movement since then though is unconvincing as the start of a third wave, even one of a low degree like this.

Micro wave 2 may not move beyond the start of micro wave 1 above 1,198.24. If the orange channel is breached this wave count would decrease substantially in probability before it is invalidated.

This analysis is published about 3:21 p.m. EST.

GOLD Elliott Wave Technical Analysis – 22nd December, 2014

As expected price broke out of the sideways range with a downwards thrust. The target can now be calculated.

Continue reading GOLD Elliott Wave Technical Analysis – 22nd December, 2014

GDX Elliott Wave Technical Analysis – 18th December, 2014

I have a new alternate for GDX for you. It fits perfectly with Gold’s Elliott wave analysis today.

Click charts to enlarge.

Main Wave Count

GDX daily 2014

This main wave count has an even probability with the alternate below.

Both wave counts are identical to the end of minor wave 1. Thereafter, they see minor wave 2 differently.

This main wave count sees the first wave up within minor wave 2 as a five wave structure. Within minute wave a there is a truncation at the end of minuette wave (ii), or this structure could be a combination. It would be most likely that minuette wave (iv) is a triangle, so there is no truncation there.

For this main wave count minor wave 2 is a zigzag which subdivides 5-3-5.

This possible truncation at the end of minuette wave (ii) has meant that I have considered the alternate. I do not know how readily this market exhibits truncations, but from my experience with GDX so far it does seem to sometimes exhibit truncations. I have noticed so far that its waves do not seem to be as textbook perfect as Gold, and maybe this is because it does not have as high a volume as Gold.

If minute wave a subdivides as a five then minute wave b may not move beyond its start below 16.45. This means that it is very likely that minute wave b would be over now, and has almost no room for downwards movement left. At 23.50 minute wave c would reach 1.618 the length of minute wave a, and minor wave 2 would reach up to the 0.618 Fibonacci ratio of minor wave 1 at 23.45.

Minor wave 2 may not move beyond the start of minor wave 1 at 27.78.

Alternate Wave Count

GDX daily 2014

It is also possible to see minute wave a as a three wave structure. Now the truncation is avoided. There is no Fibonacci ratio between minuette waves (a) and (c) within minute wave a, but then so far I have noticed that GDX does not exhibit reliable Fibonacci ratios. This does make target calculation more difficult.

For this alternate wave count minor wave 2 is a flat correction which subdivides 3-3-5.

If minute wave a subdivides as a three, then minute wave b may move beyond its start. The lower invalidation point does not apply for this idea. In fact, minute wave b is very likely to move below the start of minute wave a at 16.45 as in an expanded flat correction, because those are very common structures indeed.

Within minute wave b minuette wave (c) will reach 1.618 the length of minuette wave (a) at 16.44.

Within minuette wave (c) the structure must be a five wave structure. So far it looks like subminuette waves i through to iv would be complete within an impulse. Subminuette wave iv may not move into subminuette wave i price territory above 18.86.

If we see a new high above 18.86 and we do not see a new low below 16.45, then the main wave count will be most likely and I would expect that GDX is in an upwards trend to the target about 23.45.

Alternatively, if price does not break above 18.76 in the next day or so and we see a new low then I would expect this alternate wave count is most likely. There is no downwards invalidation point for this wave count; minute wave b can move substantially below 16.45.

The overall picture is still the same though: the structure of minor wave 2 for both wave counts is incomplete and the final target is mostly the same.

Second Alternate Wave Count

GDX daily 2014

This is the other alternate wave count which remains viable for GDX and Gold, but it is invalidated for Silver. Because of that, I consider this to have a very low probability. I probably will not publish this idea again.

For Gold this idea has a horrible look, so much so I don’t want to publish the equivalent wave count for Gold.

Any movement at all at any stage above 20.42 would invalidate this wave count for GDX. I expect this wave count will be invalidated within one or two weeks.

Minor wave 2 is far too brief and shallow to be complete.

GOLD Elliott Wave Technical Analysis – 18th December, 2014

Downwards movement was expected, but this is not what happened. However, upwards movement was allowed for and has not breached the invalidation point on the hourly Elliott wave chart.

Continue reading GOLD Elliott Wave Technical Analysis – 18th December, 2014

GOLD Elliott Wave Technical Analysis – 17th December, 2014

A new low below 1,187.25 has invalidated the first alternate and confirmed the main Elliott wave count. I will not again publish the second alternate wave count because its probability is too low.

Continue reading GOLD Elliott Wave Technical Analysis – 17th December, 2014

GOLD Elliott Wave Technical Analysis – 16th December, 2014

A little more downwards movement takes this move into its fifth day. I am swapping the Elliott wave counts over. Yesterday’s alternate is now the main preferred wave count. This is in line with GDX and Silver.

Continue reading GOLD Elliott Wave Technical Analysis – 16th December, 2014