Downwards movement for the short term was expected to 1,177. Price moved lower to reach 1,178.59.
Downwards movement was again expected.
Downwards movement was expected. Friday closed with a small red candlestick fitting both Elliott wave counts nicely.
Upwards movement was expected, but the target at 1,204 was comfortably exceeded by 15.99.
Summary: I expect a short term correction for the main wave count; minor wave 2 may have begun and the target is at 1,172. This trend change is unconfirmed though, so the channel on the hourly chart must be breached to have confidence in this trend change and the target. The alternate wave count requires strong downwards movement to begin now for a third wave within a third wave. If downwards movement breaks below 1,142.82 the alternate wave count should be seriously considered, and the main wave count would be invalidated at the hourly chart level. A new low below 1,131.09 would provide full invalidation of the main wave count and confirmation of the alternate.
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Main Daily Wave Count
There are more than thirteen possible corrective structures that cycle wave b may take. At this stage it is unclear what degree to label this big movement. I will leave labelling as is at primary degree, but it is equally possible that this degree may be moved down one level and primary wave A is an incomplete zigzag.
Cycle wave b may be a single zigzag as labelled, but may also be a double zigzag with the first zigzag unfolding as labelled. It may be a triangle with only primary wave A zigzag incomplete, or a double combination within a zigzag for primary wave W incomplete. It may be a flat correction with primary wave A as an unfolding zigzag. All these structures are equally likely. Of all Elliott waves, B waves exhibit the greatest variety in form and structure and are the hardest to label correctly as they unfold.
When the big zigzag labelled primary waves A-B-C is complete I will have alternate wave counts to manage the various possibilities for cycle wave b. When the big zigzag is complete that does not mean that cycle wave b must be complete, and only means that if cycle wave b is a single zigzag it would be complete there. All other possibilities will remain open.
A new high above 1,308.10 would invalidate the alternate and confirm this main wave count at primary and cycle degree.
The upwards wave labelled primary wave A fits only as a five wave structure, a leading expanding diagonal. Within a leading diagonal the first, third and fifth waves are most commonly zigzags, and the fourth wave should overlap first wave price territory. I have tried to see this movement as a three; if it is a three then wave A would end at the high labelled intermediate wave (3) within primary wave A. That would see wave A a leading contracting diagonal, but within it the third wave would be longer than the first. This violates the rule for wave lengths of contracting diagonals so that idea is not a viable wave count. This leads me to the conclusion that primary wave A is a five wave structure and cannot be seen as a three.
Because primary wave A subdivides as a five, primary wave B may not move beyond its start below 1,131.09.
At 1,320 primary wave C would reach equality in length with primary wave A. This would complete a 5-3-5 zigzag trending upwards. At that stage alternate wave counts would be required to manage the various possibilities for cycle wave b.
At 1,429 primary wave C would reach 1.618 the length of primary wave A.
Because primary wave A is a diagonal then it is highly likely primary wave C will be an impulse in order to exhibit alternation. Primary wave C may end about the upper edge of the channel drawn about cycle wave b.
This wave count sill has problems of structure within primary wave 5 of cycle wave a:
– within primary wave 5 intermediate wave (2) is a running flat with its C wave looking like a three and not a five.
– within intermediate wave (5) the count is seven which is corrective; either minor wave 3 or 5 will look like a three wave structure on the daily chart where they should be fives.
It is for these reasons that I will retain the alternate until price confirms finally which wave count is correct and which is invalidated.
Minute wave v passed the target and equality in length with minute wave i. It has most likely ended with no Fibonacci ratio to either of minute waves i or iii.
Minute wave v exhibits a short sharp increase in upwards momentum, with an increase in volume on the daily chart for this session. This looks like a fairly typical “blow off”, a fifth wave typical of commodities. I had not expected to see this after a fourth wave triangle, but it is still typical behaviour for Gold.
The fifth wave overshoots the Elliott channel which also looks typical.
MACD shows persistent divergence: while price trends higher MACD trends lower. This supports the idea of a trend change, but it is not definitive.
This trend change is unconfirmed. The channel needs to be breached before confidence may be had in this change. Depending on your risk appetite you may also want to wait for a new low below 1,186.78 before you have confidence in this trend change and the target.
1,186.78 is the end of minute wave iv and the start of minute wave v. When price moves below this point it may not be a second wave correction within minute wave v, and so at that point minute wave v must be over.
Minor wave 1 lasted seven days, one short of a Fibonacci eight. Minor wave 2 would most likely last either two or three days, and at the most it may last a Fibonacci five. It is most likely to be a zigzag or multiple zigzag, and it is most likely to end about the 0.618 Fibonacci ratio at 1,172.
There is no upper invalidation point at the hourly chart level for minor wave 2. It may be a flat or combination, which may include a new high above its start at 1,219.99. Although this is possible it is less likely.
Minor wave 2 should see MACD return to the zero line. It should be a clear corrective structure, a clear “three”.
Minor wave 2 may not move beyond the start of minor wave 1 below 1,142.82. If this invalidation point is breached in the next few trading days, by any amount at any time frame, this wave count would substantially reduce in probability at the daily chart level.
Alternate Daily Wave Count
This alternate wave count sees Gold as still within a primary degree downwards trend, and within primary wave 5 intermediate wave (3) has begun.
At 956.97 primary wave 5 would reach equality in length with primary wave 1. Primary wave 5 may last a total Fibonacci 55 weeks. So far it is now in its 36th week.
The maroon channel about cycle wave a from the weekly chart is now breached by a few daily candlesticks and one weekly candlestick. If cycle wave a is incomplete this channel should not be breached. The breach of this channel is a warning this wave count may be wrong.
This wave count still has a better fit in terms of better Fibonacci ratios, better subdivisions and more common structures within primary wave 5, in comparison to the main wave count above.
Within intermediate wave (3) minor wave 1 is a long extension. Within minor wave 1 minute waves iv and ii are grossly disproportionate, with minute wave iv more than 13 times the duration of minute wave i. This also reduces the probability of this wave count.
Although the invalidation point is at 1,308.10, this alternate wave count should be discarded long before that price point is reached. If the maroon channel is breached again by one full daily candlestick above it and not touching it then I would discard this alternate wave count.
A new low below 1,131.09 would confirm that intermediate wave (3) down is underway.
This alternate sees upwards movement as a completed zigzag. Unfortunately, sometimes waves are ambiguous: they are not clearly either threes or fives. With the many subdivisions within this upwards movement it is possible to see it as both a three and a five.
This alternate also expects downwards movement from here. Minor wave 3 should show a clear strong increase in downwards momentum. This is a third wave within a third wave which should gather momentum over the next few days. At 1,055 minor wave 3 would reach equality in length with minor wave 1. This target expects minor waves 1 and 3 to be both extended, so minor wave 5 to end should be shorter.
This wave count also requires confirmation of a trend change in the short term with a breach of the channel about minor wave 2 before any confidence can be had that minor wave 3 has begun.
For this alternate downwards momentum should be strong; MACD should cross well below the zero line. If this wave count is correct then we should see it confirmed within one or two weeks most likely.
While the trend change is unconfirmed it must be allowed for that minor wave 2 could move higher. If it does it may not move beyond the start of minor wave 1 above 1,308.10.
This analysis is published about 03:52 p.m. EST.
The small triangle completed, as expected, and was followed by more upwards movement as expected. I can now calculate a final target for you.
The target for upwards movement in the short term, expected to be reached today, was 1,203 – 1,205. Price has only managed to move very slightly higher to 1,195.12.
I have a new Elliott wave count for Silver which is in line with Gold. I will let the Gold analysis lead Silver and GDX, not the other way around, so the new wave count is the main wave count.
Charts only today.
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Main Wave Count
If cycle wave a is over and Silver, Gold and GDX have all recently seen cycle degree trend changes, then importantly for Silver cycle wave a subdivides as a double zigzag.
A double zigzag is a multiple, and the maximum number of corrective structures in a multiple is three. Any wave count which labels W, Y or Z as W-X-Y within them is invalid. W, Y and Z waves may only be simple corrective structures labelled A-B-C (or A-B-C-D-E in the case of a triangle).
Super Cycle II may not be a multiple and must be a flat correction. Within a flat correction the A wave must be a three, and a double zigzag is classified as a three.
Within a flat correction cycle wave b must retrace a minimum 90% the length of cycle wave a at 46.279. This would suggest a higher target for Gold should be calculated.
Within a flat correction cycle wave b may make a new all time high above the start of cycle wave a, as in an expanded flat.
The most likely structure for cycle wave b to take price that high is a zigzag.
If cycle wave b is unfolding as a zigzag then within it primary wave A should be a five wave structure, either an impulse or a leading diagonal.
It is very difficult to see the first upwards movement as a five, but it can be seen as a three. Within a leading diagonal sub waves 1, 3 and 5 are most commonly zigzags. Primary wave A may be unfolding as a leading diagonal.
Intermediate wave (2) is 0.72 of intermediate wave (1), nicely within the common depth for a second or fourth wave of a diagonal of between 0.66 to 0.81.
Intermediate wave (3) must move above the end of intermediate wave (1) above 18.486. It is most likely to unfold as a zigzag.
If intermediate wave (2) continues lower it may not move beyond the start of intermediate wave (1) below 14.077.
Alternate Wave Count
This was the prior only wave count for Silver. At the weekly chart level minor wave 2 does look to be too large.
Minute wave ii may not move beyond the start of minute wave i above 18.486.
Targets remain the same. At 11.52 intermediate wave (C) would reach 0.618 the length of intermediate wave (A). At 5.309 intermediate wave (C) would reach equality in length with intermediate wave (A).
I have a new bullish Elliott wave count for GDX for you. The bearish Elliott wave count will be an alternate, in line with Gold.
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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.
Main Wave Count
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 five wave impulse which may be complete. This wave count would required a clear breach of the channel before I have confidence in it.
If primary wave A is a five then primary wave B may not move beyond its start above 64.05.
Primary wave A lasted 38 months.
B waves exhibit the greatest variety in form and structure. Primary wave B may be a quick movement, or it may take longer. At this stage there are multiple corrective structures it may be unfolding as.
If primary wave B has begun then it may be unfolding as a double zigzag (as labelled), or a single zigzag with a leading diagonal incomplete for primary wave A, or a double combination or a triangle. All possible corrective structures are still open.
Because the downwards wave labelled intermediate wave (X) is less than 90% the length of intermediate wave (W), this cannot be a flat correction unfolding and may only be a double zigzag or double combination.
The second corrective structure may be either a zigzag, flat or triangle, and can make a new low below the start at 16.45. There can be no lower invalidation point.
The only thing I am reasonably confident of for this main wave count is that overall GDX should be in an upwards trend for the next several weeks.
Intermediate wave (W) lasted 51 days and intermediate wave (X) lasted a Fibonacci 34 days. Intermediate wave (Y) may be expected to most likely last a Fibonacci 55 days.
Alternate Wave Count
This was the only wave count up until today. I am letting Gold determine the wave count for GDX.
It is possible that intermediate wave (5) is incomplete. At 14.13 intermediate wave (5) would reach equality in length with intermediate wave (1). Within it minor wave 2 may not move beyond the start of minor wave 1 above 27.78.
Minor wave 3 must move below the end of minor wave 1 at 16.45.
There is no Fibonacci ratio between minute waves i and iii.
The target for upwards movement to end was at 1,191 – 1,193. So far price has reached up to 1,191.72.
Upwards movement was unexpected. The second wave correction is continuing higher.
A little more upwards movement to the upper blue trend line was expected. Price has moved higher, but falls slightly short of this trend line.
A big fourth wave correction is unfolding as expected from last Elliott wave analysis. Now there there is more structure to analyse a better target may be calculated.
Summary: I expect either some upwards movement to end 59.07 – 61.57 to be reached in about six weeks, or sideways movement for a big triangle which may last another 21 weeks. I do not expect US Oil to move above 91.76.
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Intermediate wave (4) may not move back into intermediate wave (1) price territory above 91.76.
Draw a channel about this downwards movement using Elliott’s first technique: draw the first trend line from the ends of intermediate waves (1) to (3), then place a parallel copy on the high of intermediate wave (2). I would expect intermediate wave (4) to find resistance at the upper edge of the channel, and it may end there.
Intermediate wave (2) was a deep 78% double combination. Given the guideline of alternation I would expect intermediate wave (4) to be more shallow. It may be a zigzag, flat or triangle most likely. If it is an expanded flat or running triangle it may include a new low below its start at 43.58.
Intermediate wave (4) would be most likely to end at either the 0.236 or 0.382 Fibonacci ratios of intermediate wave (3).
Intermediate wave (4) may be unfolding as a single flat, triangle, double flat or combination. A single flat or triangle are most likely to provide structural alternation with the double combination of intermediate wave (2).
If intermediate wave (4) is a flat correction then within it minor wave C is a 115% correction of minor wave A so this would be an expanded flat. Minor wave C would reach 1.618 the length of minor wave A at 59.07. A single flat correction may end more quickly, in maybe another six weeks for intermediate wave (4) to complete in a total Fibonacci 13 weeks.
If intermediate wave (4) is a triangle then it would be moving into minor wave C of a five wave regular contracting triangle. Minor wave C may not move beyond the end of minor wave A above 54.11. If we see movement above this price point in the next few weeks then intermediate wave (4) would most likely be a single flat. If price does not move above this point in the next few weeks then intermediate wave (4) may be a triangle which may be expected to be longer lasting with very choppy sideways movement in an ever decreasing range. It may end closer to the 0.236 Fibonacci ratio and it may take another 21 weeks to unfold.
Overall the consolidation phase for US Oil is not over. I expect more upwards and / or sideways movement. When it is done the breakout should be down for intermediate wave (5).