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A small downwards day fits the preferred expectations for Gold, but all Elliott wave counts remain valid. Targets remain the same.

Summary: It still looks like another new low may unfold before Gold either turns or begins a time consuming consolidation. The target is either 1,118 or 1,116 – 1,114.

New updates to this analysis are in bold.

Last monthly and weekly analysis is here, video is here.

Grand SuperCycle analysis is here.

MAIN ELLIOTT WAVE COUNT

FIRST DAILY CHART

Gold Elliott Wave Chart Daily 2016
Click chart to enlarge.

With the many corrections along the way down since the 14th of November, there are multiple ways to see this downwards movement. Both this main Elliott wave count and the alternate below will look at two different ways to see this movement.

For this main wave count, the first way to see this downwards movement is how it has been labelled as it unfolded. Within this wave down, minuette wave (iii) within minute wave v within minor wave 3 within intermediate wave (3) has a three wave look to it, but on the hourly chart fits well as a five.

Fibonacci ratios are noted on both this daily chart and the second daily chart below. There is not enough of a substantial difference in Fibonacci ratios between the two wave counts to increase or decrease the probability of one over the other.

This wave count still has a problem of proportion between minute wave ii and minor wave 2 and intermediate wave (2). Minute wave ii should be more brief than second wave corrections one and two degrees higher, and a triangle may not be seen for a second wave in this position because second waves may not subdivide as triangles.

If this wave count is correct, then there may have been a large trend change at the end of last week. Primary wave 2 may have begun. It should last several weeks and may not move beyond the start of primary wave 1 above 1,374.81.

Primary wave 2 would most likely end about the 0.618 Fibonacci ratio of primary wave 1 at 1,273.

HOURLY CHART

Gold Elliott Wave Chart Hourly 2016
Click chart to enlarge.

If a new trend upwards at primary degree has begun, then it should begin with a five up at the daily chart level. So far, at the hourly chart level, this wave count looks forced.

Minute wave i is seen as a five wave impulse. Within minute wave i, minuette wave (iii) looks like a three and not a five. This is sometimes acceptable when fifth waves within impulses extend as they force the fourth wave, which comes just before, to be more brief than their counterpart second waves giving the whole impulse a three wave look because the second wave correction is much more time consuming than the fourth wave. At the five minute chart level, this may have been what happened in this instance. However, it does look like the wave up from the low labelled minuette wave (ii) to the high labelled minute wave i should be seen as one complete five wave impulse and not two as necessary for this wave count.

Minute wave ii may be completing as an expanded flat correction. Within minute wave ii, minuette wave (b) is a 1.85 length of minuette wave (a). This is longer than the common range of up to 1.38 but within the allowable convention of up to 2.

Minuette wave (c) must complete as a five wave impulse. There are at least two ways to see this downwards movement today and this first hourly chart sees it as a complete five wave impulse.

Minuette wave (c) has no Fibonacci ratio to minuette wave (a).

A new high above 1,151.95 would add confidence in a trend change.

SECOND DAILY CHART

Gold Elliott Wave Chart Daily 2016
Click chart to enlarge.

This second idea is identical up to the spike labelled minute wave ii within minor wave 3 within intermediate wave (3). Thereafter, the subdivisions are seen differently.

Fibonacci ratios are again noted on the chart for members to compare with the first daily chart. There is no substantial difference in Fibonacci ratios between the two charts to identify one as having a higher probability than the other.

Minute wave v within minor wave 3 is seen extended; on the daily chart, seeing it this way has a perfect look. It will also fit on the hourly chart. Minute wave v now looks like a five wave impulse. This must increase the probability of this second chart over the first.

Within this labelling, intermediate wave (4) is seen over earlier. Now intermediate wave (5) is an incomplete five wave impulse, so a final fifth wave down for minor wave 5 is required.

Within intermediate wave (5), the correction of minor wave 4 may not move into minor wave 1 price territory above 1,151.95.

At 1,116 intermediate wave (5) would reach equality in length with intermediate wave (1). At 1,114 minor wave 5 would reach equality in length with minor wave 1. This gives a $2 target zone calculated at two wave degrees.

It should be expected that Gold will most likely make new lows while price remains within the yellow channel and keeps finding resistance at the upper edge. When price breaks above the channel, then Gold has most likely turned.

ALTERNATE ELLIOTT WAVE COUNT

FIRST DAILY CHART

Gold Elliott Wave Chart Daily 2016
Click chart to enlarge.

Downwards movement for primary wave X or 2 fits as a single zigzag.

Within downwards movement, this wave count sees a triangle labelled intermediate wave (B). This has a better fit than trying to see this as first and second waves (a second wave may not subdivide as a triangle). This wave count does not suffer from the problems of proportion that the main wave count does.

Primary wave X or 2 is now a very deep correction.

Two daily charts will be published for the alternate wave count, in the same way as two charts are published for the main wave count.

This first daily chart does not have as neat a fit as the second chart below. The key difference is within minute wave iii of minor wave 3 of intermediate wave (C).

Within this wave, minuette wave (iii) may be seen as over here, or it may also be seen as over at the next low (in the same way as the first chart for the main wave count). With this labelling another possibility is considered. This also fits on the hourly chart.

Now minuette wave (v) within minute wave iii within minor wave 3 does not have as good a look on the daily chart. This movement looks like a three, but it should be a five.

The second daily chart for the alternate, published below, has a slightly better fit.

The next wave up for the alternate wave count is either a third wave for primary wave 3 or a second zigzag for primary wave Y. This alternate wave count expects that Gold remains within a bull market, that the wave down from the 6th of July, 2016, is a very deep correction.

SECOND DAILY CHART

Gold Elliott Wave Chart Daily 2016
Click chart to enlarge.

If minuette wave (v) of minute wave iii of minor wave 3 of intermediate wave (C) is moved up to the prior low, now it looks like a five and not a three. This wave count for the alternate has a higher probability than the first daily chart for the alternate.

Now a final fifth wave down is required for minute wave v of minor wave 5 of intermediate wave (C). Minute wave iv may not move into minute wave i price territory above 1,151.95.

Fibonacci ratios for this idea are not as good as for the first alternate daily chart, so this reduces the probability of this wave count. Of all four daily charts, this one has the lowest probability because it has the worst Fibonacci ratios.

At 1,118 minor wave 5 would reach 0.618 the length of minor wave 1.

HOURLY CHART

Gold Elliott Wave Chart Hourly 2016
Click chart to enlarge.

If a final fifth wave down is required, then this is how it would fit on the hourly chart. This idea also works for the second daily chart for the main wave count.

Upwards movement may be a small fourth wave correction here labelled minute wave iv, which may be complete as a double zigzag.

This provides poor alternation with the single zigzag of minute wave ii.

The final fifth wave down may now be underway. Within this final fifth wave, minuette wave (iv) may be incomplete and may not move into minuette wave (i) price territory above 1,136.95.

If price does move above 1,136.95 in the short term, before making a new low, then labelling for the downwards wave of minute wave v would be relabelled to see only minuette wave (i) within minute wave v complete, in the same way as the downwards movement can be seen on the first hourly chart. The invalidation point for this idea would then move up to 1,142.11. Minuette wave (ii) may not move beyond the start of minuette wave (i).

At this stage, price remains within the channel drawn using Elliott’s technique about minute wave v. Expect that minute wave v is continuing lower while price continues to find resistance at the upper edge of this channel. If the upper edge of this channel is breached, that would be the earliest warning that labelling of minute wave v is wrong.

TECHNICAL ANALYSIS

WEEKLY CHART

Gold Weekly 2016
Click chart to enlarge. Chart courtesy of StockCharts.com.

Price continued lower last week with slightly increased volume from the week before. The fall in price has some support last week from volume, but it is still lighter than the two prior weeks.

There is no support line for On Balance Volume at this point.

Price is at a prior area of strong support.

The longer lower wick on last weekly candlestick is slightly bullish, but we have seen this before and it did not portend a trend change.

RSI is almost oversold at the weekly chart level. This should halt the fall in price here, or very soon indeed. RSI tends to not remain oversold for long at this time frame.

DAILY CHART

Gold Daily 2016
Click chart to enlarge. Chart courtesy of StockCharts.com.

A small downwards day continues to find resistance at the blue trend line. Expect new lows while price remains below this trend line.

A slight increase in volume for a downwards day is bearish. There was support for the fall in price today, but overall volume is declining.

Gold is in a downwards trend. All three moving averages are pointing lower and price is below all three.

The trend is now extreme with ADX above 35. Some signs of weakness are evident with ATR flat to declining, Bollinger Bands steady, and RSI showing divergence. Both RSI and Stochastics are oversold. This trend may end soon, and a break above the blue trend line would be a good indication it may be over.

On Balance Volume is sitting along its resistance line, now finding support there. The yellow support line is redrawn.

GDX DAILY CHART

GDX Daily 2016
Click chart to enlarge. Chart courtesy of StockCharts.com.

The gap down looks like a breakaway gap out of the bear flag pattern. Do not expect this gap to be filled short term; breakaway gaps are often not filled.

Using the measure rule, a target about 14.50 is expected.

GDX completed a downwards day with a lower high and lower low, but it closed green and the balance of volume was upwards. A slight increase in volume for upwards movement is slightly bullish.

At this stage, it looks like GDX is in a small consolidation within a larger downwards trend. The target at 14.50 will still apply.

ADX indicates a downwards trend is in place. It is not yet extreme.

ATR is now overall flat.

On Balance Volume is less clear today. The bearish signal with a break below support at the yellow line is now negated with OBV returning back above this line. A break above the purple line would be bullish.

Bollinger Bands are widening.

GDX is in a downwards trend, so I expect the target at 14.50 is fairly likely to be reached. The breakaway gap may be used as resistance.

This analysis is published @ 06:33 p.m. EST.