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Some upwards movement was expected from last analysis. An inside day neither fits expectations nor invalidates the Elliott wave count. A new alternate is provided today.

Summary: A new high above 1,259.75 would indicate a bounce to last about two weeks has begun. A new low below 1,241.33 would indicate downwards movement is not over yet; the first target for it to end is at 1,225.

While price remains below 1,259.75 and above 1,241.33, the balance of probability will still favour a bounce in its early stages.

New updates to this analysis are in bold.

Last monthly charts and alternate weekly charts are here, video is here.

Grand SuperCycle analysis is here.

WEEKLY CHART I

Gold Elliott Wave Chart Weekly I 2017
Click chart to enlarge.

The Magee bear market trend line is added to the weekly charts. This cyan line is drawn from the all time high for Gold on the 6th of September, 2011, to the first major swing high within the following bear market on the 5th of October, 2012. This line should provide strong resistance.

At this stage, a triangle still looks most likely and has the best fit for cycle wave b.

Within a triangle, one sub-wave should be a more complicated multiple, which may be primary wave C. Primary wave C may not move beyond the end of primary wave A above 1,374.91. This invalidation point is black and white.

At this stage, it looks like primary wave C is now complete at the hourly and daily chart level. However, at the weekly chart level, it looks possible it may continue higher. This possibility must be acknowledged while price remains above 1,214.81. Within intermediate wave (Y), minor wave B may not move beyond the start of minor wave A.

Primary wave D of a contracting triangle may not move beyond the end of primary wave B below 1,123.08. Contracting triangles are the most common variety.

Primary wave D of a barrier triangle should end about the same level as primary wave B at 1,123.08, so that the B-D trend line remains essentially flat. This involves some subjectivity; price may move slightly below 1,123.08 and the triangle wave count may remain valid. This is the only Elliott wave rule which is not black and white.

Primary wave C may end when price comes up to touch the Magee trend line.

There are three alternate wave counts that have been published in the last historic analysis, which is linked to above. They are all very bullish. Members may like to review them at this stage. They will only be published on a daily basis if price shows them to be true with a new high now above 1,295.65.

DAILY CHART

Gold Elliott Wave Chart Daily 2017
Click chart to enlarge.

Intermediate wave (Y) may now be a complete zigzag if it is accepted that a triangle completed in the position labelled minor wave B. This has a perfect fit on the hourly chart.

A new low below 1,214.81 could not be minor wave B within intermediate wave (Y) and would provide strong confirmation that intermediate wave (Y) is over.

A common range for triangle sub-waves is from about 0.8 to 0.85 the prior sub-wave, this gives a range for primary wave D from 1,158 to 1,149.

If primary wave C is correctly labelled as a double zigzag, then primary wave D must be a simple A-B-C structure and would most likely be a zigzag. Within primary wave D, minor wave B may not move beyond the start of minor wave A above 1,295.64.

At the hourly chart level, intermediate wave (A) may now be complete. However, this view requires a new high above 1,259.75 now before confidence may be had in it. If intermediate wave (A) is over, then it would have lasted 10 days (not a Fibonacci number). For the wave count to have the right look intermediate wave (B) may be at least even in duration with intermediate wave (A).

Intermediate wave (B) may be any one of more than 23 possible corrective structures. It may be a swift sharp zigzag with a strong upwards slope, or it may be a shallow sideways complicated combination, triangle or flat. It is impossible until it is almost complete to know with confidence what structure it has taken. B waves exhibit the greatest variety in price behaviour and structure, so they do not present good trading opportunities.

Only the most experienced of traders should attempt to trade B waves, even at intermediate degree. If members choose to attempt to trade intermediate wave (B) upwards, it is my strong advice to reduce risk to only 1-3% of equity. It is essential that stops are always used.

Primary wave A lasted 31 weeks, primary wave B lasted 23 weeks, and primary wave C may have been complete in 25 weeks.

Primary wave D should be expected to last at least 8 weeks (but most likely longer). The next Fibonacci ratio in the sequence would be a Fibonacci 13 and then 21.

HOURLY CHART

Gold Elliott Wave Chart Hourly 2017
Click chart to enlarge.

If intermediate wave (A) is complete, then a new wave up at intermediate degree should start with a five wave structure upwards on the hourly chart. This is incomplete. While it is unfolding no second wave correction may move beyond the start of its first wave below 1,241.33.

If intermediate wave (A) is complete, then the end of minor wave A corresponds with the strongest momentum as shown by MACD. This first wave count fits better with MACD, which is why it is the main wave count.

Minor wave 5 exhibits double divergence with MACD.

A new high above 1,259.75 would invalidate the alternate hourly wave count below and provide confidence in this main wave count.

ALTERNATE HOURLY CHART

Gold Elliott Wave Chart Hourly 2017
Click chart to enlarge.

Thank you to Alan today for this idea.

It is also possible that intermediate wave (A) is incomplete and minor wave 5 is still underway.

Minor wave 3 is slightly longer than minor wave 1. Minor wave 3 may have ended with an extended minute wave v, which is typical for Gold.

However, when fifth waves of third wave impulses extend they usually (not always) also exhibit strength. This one does not. This alternate does not have as good a fit with MACD.

Minor wave 2 was a zigzag. Minor wave 4 may have exhibited alternation as a combination. If it continues any further, it may not move into minor wave 1 price territory above 1,259.75.

TECHNICAL ANALYSIS

WEEKLY CHART

Gold Weekly 2017
Click chart to enlarge. Chart courtesy of StockCharts.com.

The long upper wicks on the last two weekly candlesticks are bearish. Volume supports the downwards movement in price, so this is not suspicious.

Declining ATR fits with the Elliott wave count at the weekly chart level; this is normal for triangles.

DAILY CHART

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

Today’s spinning top candlestick puts the trend from down into neutral, at least temporarily. The balance of volume during the session was upwards although the day made a lower low and lower high. Upwards movement during the session lacks support from volume. This day looks like a small pause within a downwards trend and not necessarily the start of a new upwards wave. This supports the alternate hourly Elliott wave count.

The downwards trend still looks like it is tiring. The downside may be limited. If price can break through support about 1,240, then look for it to continue lower to next support.

GDX

DAILY CHART

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

GDX looks more clearly bullish than Gold today.

This analysis is published @ 06:11 p.m. EST.