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Upwards movement continued to begin the last session, as the new main wave count expected. Downwards movement so far remains contained within the channel and above the short term invalidation point.

Summary: The target for a third wave to end is at this stage still 1,432. Assume the upwards trend remains intact while price remains within the blue channel on the main daily and hourly charts. An alternate would be invalidated above 1,356.63, which would add confidence to this view.

If price breaks below the lower edge of the channel (which is drawn the same way on all charts), then expect a consolidation or pullback to last a few weeks has begun.

New updates to this analysis are in bold.

Last historic analysis with monthly charts is here. Video is here.

Another alternate monthly chart is here.

Grand SuperCycle analysis is here.

MAIN ELLIOTT WAVE COUNT

WEEKLY CHART

Gold Elliott Wave Chart Weekly 2018
Click chart to enlarge.

All main wave counts will expect that Gold completed a five wave impulse down to the low labelled cycle wave a in December 2015. An historic alternate wave count looks at the possibility that the downwards wave was a double zigzag (this is linked to above). The weekly charts are the same for both ideas at this time.

Cycle wave b may be a single zigzag. Zigzags subdivide 5-3-5. Primary wave C must subdivide as a five structure and may be either an impulse or an ending diagonal. Overlapping at this stage indicates an ending diagonal.

All sub-waves must subdivide as zigzags within an ending diagonal. Intermediate wave (4) must overlap intermediate wave (1) price territory, and may not move beyond the end of intermediate wave (2) below 1,236.54. The classic pattern equivalent here is a rising wedge.

By a simple process of elimination this is the only remaining wave count today at the weekly chart level.

Attention now turns to the structure of intermediate wave (3), which may only subdivide as a zigzag. Within the zigzag, it would have the most typical look if minor wave B were to last a few weeks.

Within the zigzag of intermediate wave (1), minor wave B lasted 22 weeks, one longer than a Fibonacci 21. Within the zigzag of intermediate wave (2), minor wave B lasted a Fibonacci 8 weeks. Minor wave B within intermediate wave (3) may reasonably be expected to last a Fibonacci 5 or 8 weeks. This would give the zigzag of intermediate wave (3) an obvious three wave look at the weekly chart level.

DAILY CHART

Gold Elliott Wave Chart Daily 2018
Click chart to enlarge.

Within the ending diagonal, intermediate wave (3) must sub-divide as a zigzag.

Because we should always assume the trend remains the same until proven otherwise, it would be safest at this time to assume the upwards trend remains intact while price remains within the blue channel. This is still the main wave count today for this reason.

Within the zigzag, minor waves A and B may be over already and minor wave C upwards may have begun. The target assumes the most common Fibonacci ratio between minor waves A and C.

Minor wave C must subdivide as a five wave structure, either an impulse or an ending diagonal. It would most likely be an impulse.

Within minor wave C, minute wave ii may not move beyond the start of minute wave i below 1,324.37.

HOURLY CHART

Gold Elliott Wave Chart Hourly 2018
Click chart to enlarge.

This analysis is changed slightly to see only minute wave i within minor wave C over at the last high. This fits better with the target calculated for minor wave C to end.

Minute wave ii may not move beyond the start of minute wave i below 1,324.37. However, prior to invalidation this wave count would substantially reduce in probability if price were to break below the lower edge of the blue channel.

If minor waves A and B are already both complete, then minor wave C should continue to find support at the lower edge of the Elliott channel. It may overshoot the upper edge, but it may not move below the channel.

ALTERNATE DAILY CHART

Gold Elliott Wave Chart Daily 2018
Click chart to enlarge.

It is also possible that only minor wave A has just completed at today’s high. A breach of the yellow best fit channel (which is drawn the same on all daily charts) would see this alternate daily chart become the only daily chart.

Minor wave B may be a reasonably time consuming consolidation or a quicker sharper pullback within the upwards trend, and it may end about either of the 0.382 or 0.618 Fibonacci ratios (neither may be favoured).

Minor wave B may not move beyond the start of minor wave A below 1,236.54.

ALTERNATE HOURLY CHART

Gold Elliott Wave Chart Hourly 2018
Click chart to enlarge.

If minor wave B has begun, and if it is to last a few weeks, then it should begin with a clear five down at the hourly chart level. That would be incomplete so far.

Within the first five down, here labelled at minuette degree, the correction for subminuette wave iv may not move into subminuette wave i price territory above 1,356.63.

If this alternate is correct, then subminuette wave v downwards should bring price below the lower edge of the yellow channel. That would add confidence to this alternate wave count. A new low below 1,324.37 would add substantial confidence and invalidate the main wave count.

TECHNICAL ANALYSIS

WEEKLY CHART

Gold Weekly 2018
Click chart to enlarge. Chart courtesy of StockCharts.com.

Price found resistance last week, at about 1,345.

The small spinning top candlestick and decline in volume suggest a pause within an upwards trend, or a weak end to the upwards trend.

Stochastics may move further into overbought territory before price turns.

DAILY CHART

Gold Daily 2018
Click chart to enlarge. Chart courtesy of StockCharts.com.

This upwards trend is extreme, but that may continue for several days and price may move strongly higher before the trend ends or enters a reasonable consolidation. Overbought conditions may persist for a reasonable time when Gold has a strong bullish trend.

At this stage, there is still not enough weakness to indicate a consolidation or pullback should begin about here. That does not mean it cannot happen, only that weakness does not indicate it.

DAILY CHART – EXAMPLE OF A STRONG BULLISH TREND

Gold Daily 2018
Click chart to enlarge. Chart courtesy of StockCharts.com.

This chart is provided to illustrate how indicators used may behave when Gold has a strong bullish trend.

The strongest portion of the trend saw seven green daily candlesticks in a row; this may have been the middle of a third wave. The trend does not end until some volatility returns in the form of corrections.

Indicators may remain at extreme overbought levels for a reasonable period of time. The trend only ended when they exhibited strong divergence with price.

On Balance Volume was an excellent indicator to offer a bearish signal on the last day of the trend.

Please do not interpret this analysis to mean that the current bullish trend must look the same. It will not. This analysis is added only to illustrate how extreme a bullish trend in Gold may be.

GDX DAILY CHART

Gold Daily 2018
Click chart to enlarge. Chart courtesy of StockCharts.com.

The strong bearish engulfing candlestick today must change the analysis of GDX from bullish to neutral or bearish.

Published @ 08:44 p.m. EST.