Category Archives: Gold

GOLD Elliott Wave Technical Analysis – 20th October, 2017

Last analysis expected long positions to be held for those with a longer time frame, and stops to be pulled up to just below 1,260.70. The target remains the same, and long positions should now have much less exposure to risk.

Continue reading GOLD Elliott Wave Technical Analysis – 20th October, 2017

GOLD Elliott Wave Technical Analysis – 19th October, 2017

In last analysis, after the close of the New York session for the 18th of October, Elliott Wave Gold members were advised to enter long with stops just below 1,260.72. Those long positions should now be profitable.

Advice is given today on how to manage positions with targets and any adjustment of stops.

Continue reading GOLD Elliott Wave Technical Analysis – 19th October, 2017

Setting Targets Using Elliott Wave | 17th October, 2017

When is it appropriate to use targets that are longer than 1.618?

S&P500 2017
Click chart to enlarge.

SUMMARY:

It is appropriate to use targets calculated using Fibonacci ratios greater than 1.618 (following ratios in the sequence) when:

1. A first wave is very short, and a target calculation using only 1.618 would see the third wave not move far enough for a ratio using a higher degree to be reached.

2. Price reaches the first target using 1.618 and keeps moving through it. Then the next Fibonacci ratio in the sequence should be used.

3. The particular market analysed often exhibits extreme Fibonacci ratios such as 6.854 and 11.09. Bitcoin is an example of such a market. This behaviour can be determined by Fibonacci analysis of completed waves.

EXAMPLE:

The chart above shows a fairly typical example of a third wave for Gold.

Here, minor wave 1 was relatively short. The first target using 1.618 for minor wave 3 would have been reached about 1,488. The structure was not complete there, unless the end of minute wave i was labelled as minor wave 3. But it did not exhibit a very strong increase in downwards momentum, so although that could have been the end of it (and was suggested to me at the time) that would not have looked right.

Intermediate wave (3) exhibits an extreme Fibonacci ratio to intermediate wave (1). Intermediate wave (1) was very short. As intermediate wave (3) unfolded, it could have been labelled complete at the low labelled minute wave iii. The strongest argument against such labelling would have been that selling climaxes are usually the end of a third wave within a third wave, and not often the end of a third wave of a larger degree.

Both of the fifth waves to end minor wave 3 and intermediate wave (3) exhibit ratios of equality in length with their counterpart first waves.

Published @ 02:11 p.m. EST.

GOLD Elliott Wave Technical Analysis – 11th October, 2017

The overall upwards trend continues.

Summary: Note that inaccurate data from StockCharts substantially reduces the confidence in classic technical analysis today.

While price remains above 1,284.48 and most importantly within the pink base channel on the main hourly chart, assume the trend remains the same, upwards. The target is at 1,319 in the first instance and may be as high as 1,412.

If price breaks below the base channel, then expect a pullback to test support at prior resistance is underway. The target for it to end would be firstly at 1,281 but may be as low as 1,273. If a pullback does eventuate here, then use it as an opportunity to join the new upwards trend.

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. When StockCharts data is fixed, then this rise in price of the last few days may be more accurately analysed.

HOURLY CHART

Gold Elliott Wave Chart Hourly 2017
Click chart to enlarge.

Assume the trend remains the same until proven otherwise. It is possible that minute wave ii may be over as a very shallow double combination.

If this first hourly wave count is correct, then within minute wave iii any corrections should find very strong support at the lower edge of the pink base channel about minute waves i and ii. Minuette wave (ii) may not move beyond the start of minuette wave (i) below 1,284.48.

This first wave count requires more upwards movement to have support from volume and exhibit an increase in upwards momentum.

If price breaks below the lower edge of the base channel, then use the alternate hourly chart below.

ALTERNATE HOURLY CHART

Gold Elliott Wave Chart Hourly 2017
Click chart to enlarge.

If price breaks below the lower edge of the pink base channel on the first hourly chart, expect a pullback to test support at prior resistance is underway. Prior resistance was the upper edge of the pink Elliott channel, which has been copied over here from the first daily chart.

The first second wave correction at the start of a new trend for Gold is almost always very deep. If the target here is wrong, it may not be low enough.

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.

HOURLY CHART

Gold Elliott Wave Chart Daily 2017
Click chart to enlarge.

This hourly chart is essentially the same as the alternate hourly chart for the first wave count. The target is different though.

If the target for the alternate hourly wave count is wrong, it may not be low enough. This hourly chart shows a lower target which may be slightly more likely. This target would expect a test of support at the upper edge of the yellow best fit channel (this channel is drawn in exactly the same way as the pink Elliott channel on the first wave count).

TECHNICAL ANALYSIS

WEEKLY CHART

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

The candlestick for last week is not a Hammer reversal pattern. The lower shadow must be at minimum twice the length of the real body and this one falls short. The long lower wick is still bullish though.

The lower wick with a decline in volume for downwards movement last week does look like at least an interim low is in place.

DAILY CHART

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

StockCharts data for $GOLD has been inaccurate for two sessions now. This makes any confidence in classic analysis impossible. This analysis comes with this caveat.

If this On Balance Volume is to be believed, then it is bullish. I have no confidence in volume bars for the last three sessions here.

There is room for price to rise. Look for resistance about 1,305 to 1,310.

Gold Daily 2016
Click chart to enlarge.

With this chart, I’m using BarChart data for some volume analysis.

The very light volume for the last four sessions does not support the rise in price, so it is suspicious. This offers more support to the second Elliott wave count, which sees upwards movement as a B wave. B waves should exhibit weakness.

I do not like using BarChart and MotiveWave for On Balance Volume analysis because it squashes On Balance Volume into too small a space and does not allow for accurate trend line analysis. The trend lines here are different for this reason. If this data is used, then On Balance Volume looks more bullish.

GDX

DAILY CHART

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

The reversal pattern of the Bearish Engulfing candlestick for yesterday’s session may now be fulfilled. Today’s candlestick has a very long lower wick, which is bullish.

This candlestick may also be read as a Hanging Man pattern, but the bullishness of the long lower wick on a Hanging Man pattern means it requires bearish confirmation from the next session before it can be read as bearish.

Overall, this chart suggests an upwards day for GDX tomorrow.

Published @ 09:13 p.m. EST.

[Note: Analysis is public today for promotional purposes. Specific trading advice and comments will remain private for members only.]

Continue reading GOLD Elliott Wave Technical Analysis – 11th October, 2017