Monthly Archives: February 2015

GOLD Elliott Wave Technical Analysis – 27th February, 2015

Upwards movement was expected, with Friday’s session completing a green candlestick which fits the Elliott wave count. I have a new main and alternate Elliott wave count for you to end the week, and I am more satisfied that the subdivisions and ratios are a better fit.

Continue reading GOLD Elliott Wave Technical Analysis – 27th February, 2015

GOLD Elliott Wave Technical Analysis – 26th February, 2015

A new high above 1,211.96 invalidated the main hourly Elliott wave count and confirmed the alternate.

Continue reading GOLD Elliott Wave Technical Analysis – 26th February, 2015

GOLD Elliott Wave Technical Analysis – 25th February, 2015

Downwards movement was expected, with a short term upwards correction to end just above 1,210.44 before the downwards trend resumes.

Continue reading GOLD Elliott Wave Technical Analysis – 25th February, 2015

GOLD Elliott Wave Technical Analysis – 24th February, 2015

Downwards movement and an increase in momentum were expected. Price remains within the lower half of the channel on the hourly chart, but has not managed to make a new low.

Continue reading GOLD Elliott Wave Technical Analysis – 24th February, 2015

GOLD Elliott Wave Technical Analysis – 23rd February, 2015

A new low below 1,201.61 invalidated the main hourly Elliott wave count and confirmed the alternate. At that stage more downwards movement was expected.

Continue reading GOLD Elliott Wave Technical Analysis – 23rd February, 2015

GOLD Elliott Wave Technical Analysis – 20th February, 2015

Upwards movement was expected, but this is not what happened. We have a small red doji completing for Friday’s session.

Continue reading GOLD Elliott Wave Technical Analysis – 20th February, 2015

SILVER Elliott Wave Technical Analysis – 20th February, 2015

A new low below 17.322 and then 17.201 has invalidated both my alternate Elliott wave counts for Silver (I only published one). This leaves just one Elliott wave count now for Silver.

Click chart to enlarge.

Silver daily 2015

Minor wave 1 has a good fit. There is perfect alternation between the zigzag of minute wave ii and the flat of minute wave iv. Minute wave iii is 0.180 longer than 4.236 the length of minute wave i, and minute wave v is just 0.04 longer than 0.618 the length of minute wave iii.

Minor wave 2 is a double zigzag. The best fit channel about minute wave y is clearly breached now by downwards movement, and the lower trend line is providing resistance to upwards movement.

Minute wave i subdivides reasonably well as a five wave impulse.

I expect minute wave iii has begun. Within it minuette wave (i) may be complete. If this is correct then I would expect some more upwards movement for minuette wave (ii) which should be a deeper correction than it is so far.

At 11.52 intermediate wave (C) would be 0.618 the length of intermediate wave (A). At 5.309 intermediate wave (C) would reach equality in length with intermediate wave (A).

GDX Elliott Wave Technical Analysis – 20th February, 2015

A slight new low below 20.42 is enough to invalidate the alternate Elliott wave count. For GDX I now have only one Elliott wave count.

Click charts to enlarge.

GDX does not appear to have sufficient volume for Elliott wave analysis of this market to be reliable. It exhibits truncations readily, and often its threes look like fives while its fives look like threes. I will let my Gold analysis lead GDX, and I will not let GDX determine my Gold analysis for this reason.

GDX monthly 2014

I have learned the hard way, specifically with AAPL, that in a market with insufficient volume (even at a monthly chart level) if a movement looks like a three or a five that this apparent clear structure may not be relied upon.

For GDX this downwards movement looks like a developing five as an impulse. The final fifth wave for intermediate wave (5) looks like it is underway.

The channel drawn here is a best fit. The upper edge has recently provided resistance again.

At 14.13 intermediate wave (5) would reach equality in length with intermediate wave (1). However, so far in my analysis of GDX I have noticed it does not reliably exhibit Fibonacci ratios between its actionary waves. This makes target calculation with any reliability impossible for this market. The target at 14.13 is indicative only of a somewhat likely point for downwards movement to end.

Within intermediate wave (5) minor wave 2 may not move beyond the start of minor wave 1 above 27.78.

GDX daily 2014

So far within the new downwards movement of minor wave 3, I have tried to see this as either a series of overlapping first and second waves or a completed diagonal. The diagonal has a better fit.

This wave count expects some upwards movement for minute wave ii. Second wave corrections following leading diagonals in first wave positions are often quite deep, at least to the 0.618 Fibonacci ratio and sometimes deeper. I would expect minute wave ii to move higher to 22.13 or above.

Minute wave ii may not move beyond the start of minute wave i above 23.22.

GOLD Elliott Wave Technical Analysis – 18th February, 2015

The main Elliott wave count expected a strong upwards day for Wednesday, but this is not what has happened.

Continue reading GOLD Elliott Wave Technical Analysis – 18th February, 2015

GOLD Elliott Wave Technical Analysis – 17th February, 2015

I had expected a downwards day for Tuesday which is what has happened. The depth of this downwards movement may be surprising, but it fits the wave count nicely.

Continue reading GOLD Elliott Wave Technical Analysis – 17th February, 2015

GOLD Elliott Wave Technical Analysis – 16th February, 2015

The consolidation continues, but I had expected a short term drop within it.

Summary: This correction is incomplete. I expect it to continue with sideways movement for another two days. In the short term I still expect a downwards day for a B wave within this fourth wave correction.

Click on charts to enlarge.

Main Daily Wave Count

Gold Elliott Wave Chart Daily 2015

At this stage I judge this main wave count to have an even probability with the alternate below. I will let the structure of downwards movement, and momentum, tell us which wave count is correct over the next few weeks. At this stage they both expect more downwards movement so there is no divergence in the expected direction.

This wave count sees a five wave impulse down for cycle wave a complete, and primary wave 5 within it a completed five wave impulse. The new upwards trend at cycle degree should last one to several years and must begin on the daily chart with a clear five up.

The first five up may be a complete leading expanding diagonal. Within leading diagonals the second and fourth waves must subdivide as zigzags. The first, third and fifth waves are most commonly zigzags but they may also be impulses. This wave count sees minor waves 1, 3 and 5 as zigzags.

Leading diagonals are almost always followed by deep second wave corrections, sometimes deeper than the 0.618 Fibonacci ratio. This wave count expects a big deep correction downwards, and it should subdivide as a clear three on the daily chart (the alternate below expects a five down).

My biggest problem with this wave count, and the reason I will retain the alternate, is the structure of intermediate wave (2) within primary wave 5. This is a rare running flat but the subdivisions don’t fit well. Minor wave C should be a five wave structure, but it looks like a clear three on the daily chart. If you’re going to label a running flat then it’s vital the subdivisions fit perfectly and this one does not. This problem is very significant and this is why I judge the two wave counts to be about even in probability.

Intermediate wave (5) looks like a zigzag rather than an impulse, and has a corrective wave count. This is also a problem I have with this wave count.

Intermediate wave (2) is most likely to subdivide as a zigzag, which subdivides 5-3-5 at minor degree. When this 5-3-5 is complete then how high the following movement goes will tell us which wave count is correct.

It is possible to move the degree of labelling within intermediate wave (2) all up one degree and see it as over. However, I will not publish this idea as it is extremely unlikely and publishing it would give it undue weight. That would see intermediate wave (2) as far too brief and too shallow in comparison to intermediate wave (1). Only if price breaks above 1,251.97 will I seriously consider this idea.

Intermediate wave (2) of this new cycle degree trend may not move beyond the start of intermediate wave (1) below 1,131.09.

From January 23rd onwards, since the expected trend change, volume is highest on down days. This supports the idea that we may have seen a trend change and the trend is now down. Volume for Silver is even clearer, with a big spike on the down day there for 29th January. Although Silver has moved strongly higher today, volume for both markets is low for Friday.

GOLD Elliott Wave Chart 2015

At the daily chart level this third wave for minute wave iii looks like a very clear five wave impulse, which is typical for Gold. This wave count has the right look.

Minute wave ii was a double zigzag and 0.61 the depth of minute wave i lasting a Fibonacci three days on the daily chart. I would expect minute wave iv to be a sideways more time consuming structure, and shallow in relation to minute wave iii.

Because minute wave iv is least likely to be a zigzag I do not think that this five wave up movement is minuette wave (a) because minuette wave (a) is least likely to subdivide as a five wave structure. Minuette waves (a) is most likely to be a three wave structure if minute wave iv is a flat, combination or triangle.

Minuette wave (a) may be an incomplete zigzag. An expanded flat or running triangle may include a new low below 1,216.57 for its minuette wave (b).

Draw a channel about this downwards impulse: draw the first trend line from the lows labelled minute waves i to iii, then place a parallel copy on the high labelled minute wave ii. In this case I would expect minute wave iv to find resistance at the upper edge of this channel if it gets that far, and if it does it would be very likely to end there.

Because minute wave iii is shorter than 1.618 the length of minute wave i it is very likely that minute wave v to come may be a strong long fifth wave, typical of commodities. The trend channel will most likely not be redrawn, and minute wave v may have the strength to break below support at the lower trend line.

Minute wave iv may not move into minute wave i price territory above 1,251.97.

Alternate Daily Wave Count

Gold Elliott Wave Chart Daily Alternate 2015

The maroon channel about cycle wave a from the weekly chart is now breached by a few daily candlesticks, and is now also breached on the weekly chart by one weekly candlestick. If cycle wave a is incomplete this channel should not be breached. For this reason and this reason only this wave count, despite having the best fit in terms of subdivisions, only has an even probability with the main wave count. It will prove itself if we see a clear five down with increasing momentum on the daily chart.

Draw the maroon trend line on a weekly chart on a semi-log scale, and copy it over to a daily chart also on a semi-log scale (see this analysis for a weekly chart).

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.

Intermediate wave (2) is an expanded flat correction. Minor wave C is a complete expanding ending diagonal. Expanded flats are very common structures and ending diagonals are more common than leading diagonals.

This wave count has more common structures than the main wave count, and it has a better fit.

For this alternate wave count the diagonal is an ending diagonal for minor wave C. Within an ending diagonal all the sub waves must subdivide as zigzags. The fourth wave should overlap first wave price territory. The rule for the end of a fourth wave of a diagonal is it may not move beyond the end of the second wave.

Although Gold almost always adheres perfectly to trend channels, almost always is not the same as always. This wave count is still entirely possible. The trend channel breach is a strong warning that this wave count may be wrong and we need to heed that warning with caution at this stage. For this wave count once minor waves 1 and 2 are complete (which would be labelled minor waves A and B for the main wave count) minor wave 3 downwards should be very strong and extended, and would probably take price below 1,131.09.

A new low below 1,131.09 would confirm that a third wave down is underway.

At 956.97 primary wave 5 would reach equality in length with primary wave 1.

Intermediate wave (2) may not move beyond the start of intermediate wave (1) above 1,345.22. If this invalidation point is passed this wave count would be fully invalidated.

The short to mid term outlook for both wave counts is identical. The structure and labelling on the hourly chart is identical, so I will publish only the one hourly chart while the wave counts do not diverge.

This analysis is published about 04:29 p.m. EST.