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Another small inside day fits both Elliott wave counts, but price behaviour is pointing to one scenario more strongly than the other.

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

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

The first daily chart will not be published today. The idea is still just valid, but price behaviour strongly suggests it is wrong.

SECOND DAILY CHART

Gold Elliott Wave Chart Daily 2016
Click chart to enlarge.

This main wave count expects that Gold remains in a bear market. Downwards movement is seen as an unfolding impulse for primary wave 1 or cycle wave c.

If an impulse is unfolding lower, then there is a problem of proportion between the correction labelled minute wave ii and the two earlier corrections labelled minor wave 2 and intermediate wave (2). Minute wave ii is much longer in duration than second wave corrections one and two degrees higher. This reduces the probability of this wave count.

Also, this wave count must ignore what looks like a fairly obvious triangle early on in this downwards movement; a triangle may not be the sole corrective structure of a second wave.

Intermediate wave (3) has no Fibonacci ratio to intermediate wave (1). It is more likely then that intermediate wave (5) will exhibit a ratio to either of (1) or (3). At 1,116 intermediate wave (5) would reach equality in length with intermediate wave (1).

Ratios within intermediate wave (3) are: minor wave 3 has no Fibonacci ratio to minor wave 1, and minor wave 5 is 1.27 longer than 0.146 the length of minor wave 3.

Ratios within minor wave 3 are: minute wave iii has no Fibonacci ratio to minute wave i, and minute wave v is 2.97 longer than 0.618 the length of minute wave i.

Ratios within minute wave v of minor wave 3 are: minuette wave (iii) is 2.65 longer than 1.618 the length of minuette wave (i), and minuette wave (v) has no Fibonacci ratio to either of minuette waves (i) or (iii).

Within intermediate wave (5) so far, minor wave 3 is 3.31 shorter than 1.618 the length of minor wave 1. Minor wave 5 may not exhibit a Fibonacci ratio to either of minor waves 1 or 3.

While price remains within the best fit yellow channel, it should be expected that the downwards trend remains intact. This wave count expects one more low and then a trend change for Gold.

Minor wave 4 may not move into minor wave 1 price territory above 1,151.95. At any stage, a new high above this point and above the yellow channel would indicate a trend change for Gold.

HOURLY CHART

Gold Elliott Wave Chart Hourly 2016
Click chart to enlarge.

At this stage, it looks like a regular contracting triangle is unfolding. This wave count expects it is at minor degree.

All sub-waves fit perfectly within the triangle. Minute wave a fits as a double zigzag. All other waves must be simple A-B-C corrections.

Only the final small wave up for minute wave e is required to complete the triangle. It is most likely to fall short of the A-C trend line. If it does not end there, then it may end with a small overshoot of the A-C trend line.

Minute wave e may not move beyond the end of minute wave c above 1,136.95.

Minute wave d, currently ending, may not move beyond the end of minute wave b below 1,125.80 for a contracting triangle.

Minute wave d, for a barrier triangle, should end about the same level as minute wave b at 1,125.80 so that the B-D trend line is essentially flat. In practice, this means that minute wave d may end slightly below the end of minute wave b at 1,125.80. This invalidation point is not black and white; this is the only Elliott wave rule which has any grey.

Gold often has surprisingly short fifth waves out of its fourth wave triangles.

When minor wave 5 is complete, then this wave count expects a primary degree trend change for Gold. The next wave up for primary wave 2 is expected to be deep and last several weeks.

ALTERNATE ELLIOTT WAVE COUNT

The first alternate daily chart will also not be published today. Price behaviour does not support it at this stage.

SECOND DAILY CHART

Gold Elliott Wave Chart Daily 2016
Click chart to enlarge.

This alternate wave count expects that a zigzag is unfolding downwards within a larger continuing bull market for Gold. When primary wave X or 2 is complete, then this wave count expects the bull market to resume for Gold to new highs.

This triangle resolves the problem of proportion that the main wave count has. It sees a triangle unfolding early on in this downwards movement as intermediate wave (b).

Within intermediate wave (C), minor wave 3 is 15.48 longer than 1.618 the length of minor wave 1. This is a big difference but less than 10% the length of minor wave 3, so it may be considered a reasonable Fibonacci ratio.

Ratios within minor wave 3 are: minute wave iii is 6.44 short of 0.618 the length of minute wave i, and minute wave v is just 0.34 short of 0.236 the length of minute wave i.

Ratios within minute wave iii are: minuette wave (iii) is 2.56 longer than 1.618 the length of minuette wave (i), and minuette wave (v) has no Fibonacci ratio to either of minuette waves (i) or (iii).

Within minor wave 5 so far, minute wave iii is 3.31 short of 1.618 the length of minute wave i.

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

Minute wave iv may not move into minute wave i price territory above 1,151.95.

HOURLY CHART

Gold Elliott Wave Chart Hourly 2016
Click chart to enlarge.

I have charted a possible flat correction, but it does not at this stage have the right look. If I can see an alternate structure for this fourth wave that looks right, then it will be published.

The triangle looks like an almost complete regular contracting triangle. This wave count is identical to the main wave count for this fourth wave with the exception of the degree of labelling; here, it is one degree lower.

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 pennant pattern is unfolding. These are fairly reliable continuation patterns. The breakout is most likely to be downwards.

The pattern is supported by declining volume as price moves sideways.

A target about 1,085 is calculated using the measured rule.

On Balance Volume remains constrained. A breakout may indicate the next direction for price.

The trend is down. Price is below all three moving averages and all three are pointing downwards.

The trend is extreme though. ADX is above 35 and the black ADX line is above both -DX and +DX lines.

Both Stochastics and RSI are oversold and both exhibit divergence.

The trend is nearing its end, but the pennant pattern indicates at least one more low before it turns.

GDX DAILY CHART

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

The larger flag pattern gives a target about 14.50. The breakaway gap out of the pattern is still providing resistance.

A smaller consolidation looks like it is unfolding, but this does not fit well as a flag nor pennant. The low of 20th of December is slightly below the 15th of December, and now the high for today is at exactly the same point as the 19th of December. This pattern has a very slight downwards slope.

ADX is now extreme above 35. The black ADX line is now above both the +DX and -DX lines indicating an extreme trend.

The target at 14.50 may be too optimistic.

The yellow line on On Balance Volume is slightly adjusted. This is now providing resistance. A break above either of these lines would be a bullish signal from GDX. If that happens, then a low may be in place.

This analysis is published @ 07:45 p.m. EST.