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Analysis for the last two days has advised members to assume the trend remains the same, upwards, until proven otherwise. Friday has continued the upwards trend. A new short term target is now calculated.

Summary: The trend remains up. The short term target is at 1,320, where a deep pullback may begin.

Always use stops and invest only 1-5% of equity on any one trade.

New updates to this analysis are in bold.

Last monthly charts for the main wave count are here, another monthly alternate is here, and video is here.

Grand SuperCycle analysis is here.

The wave counts will be labelled first and second. Classic technical analysis will be used to determine which wave count looks to be more likely. In terms of Elliott wave structure the second wave count has a better fit and fewer problems.

FIRST ELLIOTT WAVE COUNT

WEEKLY CHART

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

There are more than 23 possible corrective structures that B waves may take, and although cycle wave b still fits well at this stage as a triangle, it may still be another structure. This wave count looks at the possibility that it may be a double zigzag.

If cycle wave b is a double zigzag, then current upwards movement may be part of the second zigzag in the double, labelled primary wave Y.

The target remains the same.

Within intermediate wave (C), no second wave correction may move beyond the start of its first wave below 1,205.41. However, prior to invalidation, this wave count may be discarded if price breaks below the lower edge of the black Elliott channel. If this wave count is correct, then intermediate wave (C) should not break below the Elliott channel which contains the zigzag of primary wave Y upwards.

There are two problems with this wave count which reduce its probability in terms of Elliott wave:

1. Cycle wave b is a double zigzag, but primary wave X within the double is deep and time consuming. While this is possible, it is much more common for X waves within double zigzags to be brief and shallow.

2. Intermediate wave (B) within the zigzag of primary wave Y is a double flat correction. These are extremely rare, even rarer than running flats. The rarity of this structure must further reduce the probability of this wave count.

DAILY CHART

Gold Elliott Wave Chart Daily 2017
Click chart to enlarge.

The analysis will focus on the structure of intermediate wave (C). To see details of all the bull movement for this year see daily charts here.

Intermediate wave (C) must be a five wave structure, either an impulse or an ending diagonal. It is unfolding as the more common impulse.

It is possible that minor waves 1 and now 2 may both be over. Minor wave 2 may have ended very close to the 0.618 Fibonacci ratio. If it continues lower, then minor wave 2 may not move beyond the start of minor wave 1 below 1,205.41.

Minor wave 1 lasted 44 days and minor wave 2 may have lasted 20 days, just one short of a Fibonacci 21.

It is of some concern now that minor wave 3 appears to be starting out rather slowly. This is somewhat unusual for a third wave and offers some support now to the second Elliott wave count. With StockCharts data showing a steady decline in volume as price rises, this concern is now validated.

HOURLY CHART

Gold Elliott Wave Chart Hourly 2017
Click chart to enlarge.

Assume the trend remains the same until proven otherwise. With upwards movement continuing and some support from volume for Friday’s session, this is now the main wave count.

A five up is now incomplete. The middle of a third wave may have passed during Friday’s session.

Within the middle of the third wave, sub-micro wave (4) may not move into sub-micro wave (1) price territory below 1,297.

When subminuette waves iii and iv are complete, then a target may be calculated for minuette wave (iii) to end. When minuette waves (iii) and (iv) are complete, then a final target may be calculated for minute wave i to end.

If price makes a new low below 1,297, then the degree of labelling within sub-micro wave (3) may be moved down one degree. Another first wave up may be complete and downwards movement would then be labelled as another second wave correction, which may not move beyond the start of its first wave below 1,290.11.

A new low below 1,290.11 would see the alternate hourly wave count below preferred.

ALTERNATE HOURLY CHART

Gold Elliott Wave Chart Hourly 2017
Click chart to enlarge.

It is possible to see a five up complete at Friday’s high. The channel is drawn in the same way.

If a five up is complete, then a three down should follow. The most likely target for minute wave ii would be the 0.618 Fibonacci ratio of minute wave i, but it may not be low enough if this target is wrong. The first second wave correction within a new trend is commonly very deep for Gold.

Minute wave ii may not move beyond the start of minute wave i below 1,260.72.

SECOND ELLIOTT WAVE COUNT

WEEKLY CHART

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

It is still possible that cycle wave b is unfolding as a regular contracting or barrier triangle.

Within a triangle, one sub-wave should be a more complicated multiple, which may be primary wave C. This is the most common sub-wave of the triangle to subdivide into a multiple.

Intermediate wave (Y) now looks like a complete zigzag at the weekly chart level.

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.

Finally, primary wave E of a contracting or barrier triangle may not move beyond the end of primary wave C above 1,295.65. Primary wave E would most likely fall short of the A-C trend line. But if it does not end there, then it can slightly overshoot that trend line.

Primary wave A lasted 31 weeks, primary wave B lasted 23 weeks, and primary wave C lasted 38 weeks.

The A-C trend line now has too weak a slope. At this stage, this is now a problem for this wave count, the upper A-C trend line no longer has such a typical look.

Within primary wave D, no part of the zigzag may move beyond its start above 1,357.09.

DAILY CHART

Gold Elliott Wave Chart Daily 2017
Click chart to enlarge.

This second wave count expects the new wave down may be deeper and longer lasting than the first wave count allows for.

A common length for triangle sub-waves is from 0.8 to 0.85 the length of the prior wave. Primary wave D would reach this range from 1,170 to 1,158.

If primary wave C is correctly labelled as a double zigzag, then primary wave D must be a single zigzag.

Within the single zigzag of primary wave D, intermediate wave (A) is labelled as a complete impulse.

Intermediate wave (A) lasted 20 days, just one short of a Fibonacci 21. Intermediate wave (B) may be about the same duration, so that this wave count has good proportions, or it may be longer because B waves tend to be more complicated and time consuming.

Intermediate wave (B) may be a sharp upwards zigzag, or it may be a choppy overlapping consolidation as a flat, triangle or combination. At this stage, it looks most likely to be incomplete because an intermediate degree wave should last weeks. At its conclusion intermediate wave (B) should have an obvious three wave look to it here on the daily chart.

HOURLY CHART

Gold Elliott Wave Chart Daily 2017
Click chart to enlarge.

This hourly chart is the same as the hourly chart for the first wave count. This is because 1-2-3 of an unfolding impulse (hourly chart for the first wave count) will subdivide 5-3-5, which is exactly the same as A-B-C of a zigzag.

Subdivisions are the same, the target is now the same, and the invalidation point remains the same.

TECHNICAL ANALYSIS

WEEKLY CHART

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

This last weekly candlestick completes a Morning Star reversal pattern, which is bullish.

Without support from volume for upwards movement though, it should be suspicious. The reversal pattern may signify a new sideways trend or a short lived upwards bounce.

Resistance at On Balance Volume may halt the rise in price.

DAILY CHART

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

There is strong resistance about 1,305 to 1,310.

Some support from volume for Friday’s upwards movement along with a bullish signal now from On Balance Volume offers support to the new main hourly Elliott wave count.

MACD is now bullish.

There is still some weakness in this upwards movement (which supports the second Elliott wave count and sees it as a B wave) due to declining ATR, volume overall remaining light, and Bollinger Bands still contracting.

GDX

DAILY CHART

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

Long lower wicks on the last daily candlestick and one two days prior are bullish. Price is back within the resistance zone, but Stochastics is not yet fully overbought and exhibits no divergence yet with price; there is room for price to rise further.

There is weakness in this upwards movement though due to volume overall remaining light, Bollinger Bands contracting, and ATR continuing to decline. The rise in price is suspicious; this may be a B wave.

Published @ 07:13 p.m. EST on 14th October, 2017.