Tag Archives: elliott wave count on gold

GOLD Elliott Wave Technical Analysis – 17th May, 2017

Price remained within channels and continued higher.

Today’s strong upwards session with heavy volume looks like a blowoff top.

Summary: It looks like a blow off top may have ended upwards movement today. However, price remains within the best fit channels. While price remains within the steeper channel particularly, expect it to keep going up. When the channel is breached, it would be likely price has changed trend.

New updates to this analysis are in bold.

Last historic analysis with monthly charts is here, video is here.

Grand SuperCycle analysis is here.

MAIN ELLIOTT WAVE COUNT

For clarity I have decided at this time it may be best to publish on a daily basis weekly charts I and II. Both charts expect a zigzag down to complete and the difference is in the expected depth.

WEEKLY CHART I

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

Combinations are very common structures. Cycle degree waves normally last one to several years, and B waves do tend to be more time consuming waves than all other waves. Given these tendencies the most likely scenario at this point may be that cycle wave b is an incomplete double combination.

The first structure in the double labelled primary wave W fits as a zigzag. This upwards movement will subdivide as either a three (zigzag) or a five (impulse). It does have a three wave look to it.

The double is joined by a deep three in the opposite direction labelled primary wave X, which is a 0.77 depth of primary wave W. X waves within double combinations are normally very deep; this one looks right.

The second structure in the combination may be either a triangle or a flat correction. Both of these structures have A waves which subdivide as threes.

At this stage, the upwards wave from the low in December 2016 does now look best and subdivide best as a completed zigzag. This may be intermediate wave (A) of a flat correction or a triangle. Because a triangle for primary wave Y would look essentially the same as the second weekly chart below, only a flat correction is considered here. The most common two structures in a double combination are a zigzag and a flat.

This wave count follows the most common scenario and has the best fit.

Within the flat correction of primary wave Y, intermediate wave (B) must retrace a minimum 0.9 length of intermediate wave (A) at 1,140.27. The most common length for intermediate wave (B) is from 1 to 1.38 times the length of intermediate wave (A), giving a common range from 1,123.08 to 1,057.77.

Intermediate wave (B) may subdivide as any corrective structure, but the most common structure for B waves within flats is a zigzag. At this stage, on the hourly chart it looks like a five down is now complete, which would indicate intermediate wave (B) is a zigzag subdividing 5-3-5.

The daily and hourly charts will follow this weekly chart. That does not mean the other two weekly charts aren’t possible, they are, but the number of charts must be kept reasonable on a daily basis.

WEEKLY CHART II

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

What if cycle wave b is a triangle? This is also entirely possible. Triangles are not as common as double combinations, but they are not uncommon.

Within the triangle, primary waves A, B and C are all single zigzags. One of the five subwaves of a triangle normally subdivides as a more complicated multiple, usually a double zigzag. This may be what is unfolding for primary wave D.

Primary wave D of a regular contracting triangle may not move beyond the end of primary wave B below 1,123.08.

Primary wave D of a regular barrier triangle should end about the same level as primary wave B at 1,123.08, so that the B-D trend line is essentially flat. What this means in practice is that primary wave D may end slightly below 1,123.08 and the triangle would remain valid. This is the only Elliott wave rule which is not black and white.

Thereafter, primary wave E should unfold upwards and would most likely fall a little short of the A-C trend line. If not ending there, it may overshoot the A-C trend line.

At this stage, the structure on the hourly chart is still the same for both this weekly wave count and the first weekly wave count: a zigzag downwards is unfolding. However, they now diverge in how far down the next wave is expected to go. This second weekly wave count expects a more shallow movement to not end reasonably below 1,123.08.

DAILY CHART

Gold Elliott Wave Chart Daily 2017
Click chart to enlarge.

This daily chart will suffice for both weekly charts above, although the labelling follows weekly chart I.

Both weekly charts expect a zigzag downwards. Weekly chart I expects a deep zigzag for intermediate wave (B) to a minimum at 1,140.27. Weekly chart II expects a zigzag down for primary wave D to not move below 1,123.08 and most likely fall well short of that point.

The daily chart follows the expectations for weekly chart I, but the structure for weekly chart II would be exactly the same.

Within the flat correction of primary wave Y, intermediate wave (B) must retrace a minimum 0.9 length of intermediate wave (A) at 1,140.27. The most likely corrective structures to achieve the deep correction required for B waves within flats are single or multiple zigzags. These begin with a five, then a three in the opposite direction.

Minor wave A is complete today and now minor wave B may also be complete as a quick sharp zigzag. Because of the blowoff top today that looks to be most likely.

However, there can be no confidence yet that minor wave B is over while price remains within both small channels on the hourly chart. Accept that it may continue higher.

Original targets for minor wave B were the 0.382 and 0.618 Fibonacci ratios. Minor wave B today has almost touched the 0.618 Fibonacci ratio, which is at 1,264.34.

If minor wave B continues higher, it may not move beyond the start of minor wave A above 1,294.96.

HOURLY CHART

Gold Elliott Wave Chart Hourly 2017
Click chart to enlarge.

Two narrow best fit channels are drawn about this upwards movement. It is very important that members do not have confidence yet that minor wave B is over while price remains within the channels. Only when the first channel is clearly breached may any confidence be had. Reasonable confidence in a trend change may be had if the second channel is breached.

The blow off top seen today may have been minute wave c. C waves can behave like third waves, and third waves often end in blow off tops.

If minor wave B moves higher, then the target calculated for minor wave C must also move correspondingly higher.

If minor wave C lasts a total of 12 sessions, then intermediate wave (B) may last a total Fibonacci 34 sessions.

It is my judgement that this first hourly chart has a higher probability for the following reasons:

– Today’s session completes a blow off top, and this may be followed by a reversal.

– The 0.618 Fibonacci ratio is almost met.

– Price found resistance about 1,260.

ALTERNATE HOURLY CHART

Gold Elliott Wave Chart Hourly 2017
Click chart to enlarge.

It is also possible that upwards movement for the last six sessions is a complete five wave impulse.

The blow off top may be followed by a consolidation for a B wave within a B wave. This may take a few days.

Thereafter, another upwards wave may make minor wave B very deep indeed, deeper than the 0.618 Fibonacci ratio.

This is possible, but it has a lower probability than the main hourly wave count.

WEEKLY CHART IV

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

This weekly chart is published today in response to a member’s query.

What if the bull market beginning in December 2015 remains intact? Price has essentially been moving sideways since that date, so all possibilities should be considered.

A possible Morning Doji Star reversal pattern at the low labelled intermediate wave (B) would support this wave count.

This wave count requires confirmation above 1,294.96. That would invalidate the first three weekly charts (the third is seen in historic analysis only).

It is possible that cycle wave b is continuing higher as a double zigzag. However, double zigzags normally have brief and shallow X waves. The purpose of the second zigzag in a double (and the third when there is one) is to deepen the correction when price does not move deep enough in the first (or second) zigzag. Thus double (and triple) zigzags normally have a strong and clear slope against the prior trend. To achieve this look their X waves normally are brief and shallow.

In this case, primary wave X is neither brief nor shallow. It is a 0.77 depth of primary wave W and lasted 0.74 the duration of primary wave W. Overall, this does not have a typical look of a double zigzag so far.

This wave count should only be used if confirmed with a new high above 1,294.96. Low probability does not mean no probability, but should always be given less weight until proven.

TECHNICAL ANALYSIS

WEEKLY CHART

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

Another downwards week closes green with a small real body. This is a spinning top candlestick that shifts the trend from down to neutral.

The balance of volume is upwards and shows a decline. Upwards movement may be a counter trend movement if it does not have support from volume.

The bullish signal from On Balance Volume suggests this week may see upwards movement.

DAILY CHART

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

Today’s session looks very much like a strong blow off top, typical of commodities. Expect either a sideways consolidation for a few days, or a reversal, after a blow off top.

There is slight bearish divergence between price and On Balance Volume to support the view of a reversal here.

There is room for price to rise further; neither RSI nor Stochastics are yet overbought.

If this is a new trend, then it is concerning that Bollinger Bands continue to contract. This trend still lacks expanding volatility.

GDX

DAILY CHART

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

There is no gap between the 15th and 17th of May because the high of the 15th was 23.13 and the low for the 17th was exactly the same.

While this upwards day came with stronger volume, the last four upwards sessions have come with a steady decline in volume. This session looks like it may possibly be a smaller blow off top.

The spinning top candlestick of this session indicates indecision, a balance of bulls and bears.

This upwards movement of the last nine days still has declining ATR, contracting Bollinger Bands, and overall lighter volume than the prior downwards movement. Overall, it still looks more likely to be a counter trend bounce than a new trend for GDX.

With Stochastics now overbought and a spinning top candlestick pattern, members are advised to wait one more day to see if a reversal pattern emerges.

This analysis is published @ 09:40 p.m. EST.

[Note: Analysis is public today for promotional purposes. Member comments and discussion will remain private.]

Continue reading GOLD Elliott Wave Technical Analysis – 17th May, 2017

GOLD Elliott Wave Technical Analysis – 5th April, 2017

Upwards movement was expected. Price moved lower, but has rebounded strongly after the session closed. Downwards movement remained above the invalidation point on the hourly chart.

Continue reading GOLD Elliott Wave Technical Analysis – 5th April, 2017

GOLD Elliott Wave Technical Analysis – 7th February, 2017

A small range inside day fits both Elliott wave counts, but the situation is no clearer.

Continue reading GOLD Elliott Wave Technical Analysis – 7th February, 2017

GOLD Elliott Wave Technical Analysis – 20th December, 2016

A small downwards day fits the preferred expectations for Gold, but all Elliott wave counts remain valid. Targets remain the same.

Continue reading GOLD Elliott Wave Technical Analysis – 20th December, 2016

GOLD Elliott Wave Technical Analysis – 22nd November, 2016

Yesterday’s analysis expected upwards movement overall.

Price has overall moved sideways and lower. So far an inside day is completing for Tuesday’s session.

Continue reading GOLD Elliott Wave Technical Analysis – 22nd November, 2016

GOLD Elliott Wave Technical Analysis – 31st October, 2016

A very slight new high was expected before downwards movement.

Price has moved lower, but it did not make a slight new high first.

Continue reading GOLD Elliott Wave Technical Analysis – 31st October, 2016

GOLD Elliott Wave Technical Analysis – 19th October, 2016

Upwards movement was expected from both the main and alternate Elliott wave counts in yesterday’s analysis.

The two Elliott wave counts now diverge. Invalidation and confirmation points will be used to let price tell us which one is correct. And classic technical analysis, particularly volume analysis, will be used to judge the probability of each Elliott wave count.

Continue reading GOLD Elliott Wave Technical Analysis – 19th October, 2016

GOLD Elliott Wave Technical Analysis – 22nd September, 2016

Upwards movement was again expected.

Continue reading GOLD Elliott Wave Technical Analysis – 22nd September, 2016

GOLD Elliott Wave Technical Analysis – 30th August, 2016

The main Elliott wave count has been confirmed with a new low below 1,310.84.

Summary: Some more downwards movement this week looks most likely, to about 1,279. If this target is wrong, it may be a little too low. A new high now above 1,330.01 would confirm downwards movement as over and a third wave up as just beginning.

New updates to this analysis are in bold.

Last weekly charts are here.

Grand SuperCycle analysis is here.

DAILY ELLIOTT WAVE COUNT

Gold Elliott Wave Chart Daily 2016
Click chart to enlarge.

Primary waves 1 and 2 are complete. Thereafter, this wave count differs from the two alternates.

This main wave count will expect primary wave 3 to be longer than primary wave 1. Because this is very common, this is the main wave count and it expects the most common scenario is most likely. At 1,582 primary wave 3 would reach 1.618 the length of primary wave 1.

Only intermediate wave (1) so far is complete within primary wave 3. Intermediate wave (2) may be close to completion. It may find support at the lower edge of the base channel drawn about primary waves 1 and 2. Intermediate wave (2) may not move beyond the start of intermediate wave (1) below 1,200.07

Primary wave 3 may only subdivide as an impulse.

Minute wave iv may not move into minute wave i price territory above 1,330.01.

At 1,279 minor wave C would reach 1.618 the length of minor wave A. Price may end downwards movement when it finds support at the lower edge of the maroon base channel drawn about primary waves 1 and 2. Because this target at 1,279 would expect an overshoot of the lower edge of the base channel, the target may be too low. Support at the base channel may not allow price to move this low.

Intermediate wave (2) may not move beyond the start of intermediate wave (1) below 1,200.07.

Primary wave 2 lasted 56 days (one more than a Fibonacci 55). So far intermediate wave (2) is more brief in duration. It has lasted 39 days and may be just a few days away from completion.

Draw a small channel about minor wave C, using Elliott’s technique, and copy it over to the hourly chart.

At this stage, it is just possible to see a complete structure for minor wave C downwards. A new high above 1,330.01 at any stage short term could not be a continuation of minor wave C, so at that stage minor wave C would have to be over. A new high above 1,330.01 would tell us now that intermediate wave (2) should be over and intermediate wave (3) upwards should be underway.

HOURLY ELLIOTT WAVE COUNT

Gold Elliott Wave Chart Hourly 2016
Click chart to enlarge.

Minor wave C must subdivide as a five wave structure.

Minor wave C is unfolding as an impulse. The question today is whether or not minute wave iv within it is complete.

Minute wave ii was a deep 0.73 zigzag lasting six days. Given the guideline of alternation, minute wave iv would most likely be a very shallow sideways flat, combination or triangle. To have good proportion with minute wave ii, it is likely that minute wave iv will last at least three or four days, if not longer.

Within flats, combinations and triangles, the first wave subdivides as a three. This would now be a complete zigzag for minuette wave (a) or (w).

Within expanded flats and running triangles, minuette wave (b) may make a new price extreme beyond the start of minuette wave (a). The new low today may be part of minute wave iv. There is no maximum limit for X waves within combinations; they too may make new price extremes beyond the start of W waves.

If minute wave iv is a flat correction, then it would be an expanded flat. These are very common structures. The normal range for minuette wave (b) would be 1 to 1.38 the length of minuette wave (a), at 1,315.42 to 1,311.82. Minuette wave (b) is now longer than the common length. There is no rule stating a maximum limit for B waves within flat corrections, but there is an Elliott wave convention which states that when the potential B wave is longer than twice the length of the potential A wave the idea of a flat correction should be discarded based upon extremely low probability. That price point here would be below 1,305.95.

So far minuette wave (b) should be complete and is 1.78 the length of minuette wave (a).

If minute wave iv is unfolding as an expanded flat, then a target for minuette wave (c) would be just below the invalidation point at 1,330. Minuette wave (c) would be close to 2.618 the length of minuette wave (a). Minuette wave (c) would be extremely likely to make at least a slight new high above the end of minuette wave (a) at 1,324.89 to avoid a truncation and a very rare running flat.

If minute wave iv is unfolding as a triangle, then minuette wave (c) may not move beyond the end of minuette wave (a) above 1,324.89. A triangle would be invalid above this point. Thereafter, price should move sideways in an ever decreasing range for another few days for a triangle to be complete. MACD should hover about zero. At this stage, a triangle does not look likely because MACD has moved too far below zero.

If minute wave iv is unfolding as a combination, then within it the first structure labelled minuette wave (w) would be a complete zigzag. The zigzag would be joined by a three in the opposite direction, a zigzag labelled minuette wave (x), which should now be over. The second structure in the double would very likely be a flat correction but may also be a triangle. It should end about the same level as minuette wave (w) at 1,324.85, so that the whole structure moves sideways. Minuette wave (y) should last about two or three days.

Minute wave iv may not move into minute wave i price territory above 1,330.01.

ALTERNATE HOURLY ELLIOTT WAVE COUNT

Gold Elliott Wave Chart Hourly 2016
Click chart to enlarge.

It is possible that minute wave iv is over as a brief and very shallow zigzag. Minute wave iv would exhibit little alternation with minute wave ii: they would both be zigzags. There would be some alternation in depth: minute wave ii was deep and minute wave iv was shallow. There would be a little alternation within the structure: minute wave ii had a long complicated B wave and minute wave iv had a brief B wave.

Minute wave ii lasted six days. If minute wave iv is over already, it would have lasted only one day. The proportions at the daily chart level do not look very good, but sometimes Gold does exhibit fourth waves which are more brief and shallow than its second waves. This tendency normally shows up in a third wave though and not so often in a C wave.

If minute wave iv is over, then at 1,288 minute wave v would reach equality in length with minute wave i. This would see the base channel on the daily chart only very slightly overshot.

Within minute wave v, no second wave correction may move beyond the start of its first wave above 1,324.89.

Due to the lack of alternation and the poor proportions between minute waves iv and ii, this wave count is possible but has a low probability. It should only be used if price makes a new low short term below 1,305.95.

ALTERNATE DAILY ELLIOTT WAVE COUNT

Gold Elliott Wave Chart Daily 2016
Click chart to enlarge.

It is possible that primary wave 3 is over and shorter than primary wave 1. Primary wave 3 shows stronger volume than primary wave 1 (see technical analysis weekly chart).

If primary wave 3 is over, then the current consolidation for Gold would be primary wave 4.

Primary wave 2 was a relatively shallow 0.35 expanded flat correction. Primary wave 4 may be unfolding as a deeper zigzag which would exhibit perfect alternation.

Primary wave 4 may not move into primary wave 1 price territory below 1,282.68.

Primary wave 5 would be limited to no longer than equality in length with primary wave 3, so that the core Elliott wave rule stating a third wave may not be the shortest is met. Primary wave 5 would have a limit of 174.84.

This wave count expects more downwards movement to complete a five wave impulse for intermediate wave (C) in the same way as the main wave count expects a five wave impulse down to complete minor wave C. Only the degree of labelling differs; this wave count is one degree higher.

The hourly chart would be exactly the same except for the degree of labelling.

It is also possible that primary wave 4 may be a regular contracting triangle. If sideways movement continues in an ever decreasing range, then that idea would be published. At this stage, a zigzag looks more likely because the subdivisions have a slightly better fit.

TECHNICAL ANALYSIS

WEEKLY CHART

Gold Weekly 2016
Click chart to enlarge.

A strong downwards week with an increase in volume supports the main and alternate III wave counts. Overall, volume is still declining and price remains range bound.

The prior two green weekly candlesticks had long upper shadows which was bearish.

Price may find some support about 1,310.

On Balance Volume at the end of last week has come down to find support at the purple trend line. This may help to stop price falling much further.

RSI is not extreme. There is some hidden bullish divergence with price and RSI: RSI has made a lower low below the low of 25th of July but price has made a higher low. This indicates some weakness to this downwards movement. It is more likely to be a smaller correction than a sustainable trend.

DAILY CHART

Gold Daily 2016
Click chart to enlarge.

Overall, price remains range bound with resistance about 1,375 and support about 1,310 – 1,305. This range bound period began back on 7th of July. During this range bound period, it is the two upwards days of 8th of July and 26th of August which have strongest volume suggesting an upwards breakout is more likely than downwards. This supports all three Elliott wave counts.

Yesterday saw an upwards day with lighter volume; the rise in price was not supported by volume. Now a strong downwards day comes with a slight further decline in volume. A decline in volume is typical of a consolidating market, and volume should be expected to decline further towards the end of the consolidation. In the short term, this decline in volume suggests some upwards reaction about here, so this supports the main hourly Elliott wave count over the alternate hourly count.

The 55 day moving average has not provided support.

On Balance Volume has moved down and away from the purple line which is now strengthened and is providing resistance. OBV may find some support at the yellow line, but this line has been weakened recently with a breach.

Price should find support in the area of 1,310 to 1,305.

RSI is not extreme. There is room for price to rise or fall. There is no divergence today between price and RSI to indicate weakness.

ADX continues to decline and the +DX and -DX lines are whipsawing about each other. ADX indicates this market is not trending. ATR agrees as it too continues overall to decline.

Stochastics is oversold. Price has not yet reached support at 1,310 though, so a little more downwards movement from price may be expected before this downwards swing is over. There is some small day to day divergence between Stochastics and price: price today made a slight new low but Stochastics did not. This indicates weakness in price. Price may not be able to get down to touch support. This divergence suggests that downwards movement may be over for this swing.

Bollinger Bands are widening now for four days in a row. A trend may be beginning to return. If it is, then it would be down. However, this contradicts ADX and ATR.

This analysis is published @ 07:30 p.m. EST.

[Note: Analysis is public today for promotional purposes. Member comments and discussion will remain private.]

Continue reading GOLD Elliott Wave Technical Analysis – 30th August, 2016

GOLD Elliott Wave Technical Analysis – 27th June, 2016

Sideways movement fits the expectations overall for the main hourly Elliott wave count in last analysis.

The picture today is a little clearer for the short term.

Continue reading GOLD Elliott Wave Technical Analysis – 27th June, 2016

GOLD Elliott Wave Technical Analysis – 11th May, 2016

Upwards movement was expected for Wednesday’s session, which is exactly what happened.

Continue reading GOLD Elliott Wave Technical Analysis – 11th May, 2016