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GOLD Elliott Wave Technical Analysis – 31st May, 2017

Downwards movement was expected for Wednesday’s session, but this is not what happened.

Summary: A high may again be in place here or very soon indeed. When the new channel on the hourly chart is breached, then confidence may be had in this view. The target is now at 1,064 for the first weekly chart, and still 1,157 to 1,149 for the second weekly chart.

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, II and IV. Both weekly charts I and II expect a zigzag down to complete and the difference is in the expected depth. Weekly chart IV has a very low probability and will only be given serious consideration if price makes a new high above 1,294.96.

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.

A target is now calculated for minor wave C to complete intermediate wave (B). This target would meet the minimum requirement for intermediate wave (B). Minor wave B has moved higher and the target is recalculated. At 1,064 minor wave C would exhibit a common Fibonacci ratio to minor wave A, and the minimum requirement for intermediate wave (B) would be met.

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 labelled minor wave A is 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 three weekly charts aren’t possible, they are, but the number of charts must be kept reasonable on a daily basis.

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. If that resistance holds, then the second weekly chart would be correct.

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. It may also subdivide as a single zigzag.

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. Primary wave E may not move beyond the end of primary wave C above 1,294.96.

Triangles normally adhere very well to their trend lines. Occasionally, price may overshoot the trend lines but when this happens it is not by much and is quickly reversed. The upper A-C trend line should offer very strong resistance at this stage if cycle wave b is unfolding as a triangle. This trend line is added to the daily chart below.

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. (It may also turn out to be a double zigzag. For now a single only will be charted but a double will be kept in mind). 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 at this stage.

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. Minor wave B may now be a complete zigzag.

Minor wave B may not move beyond the start of minor wave A above 1,294.96.

MAIN HOURLY CHART

Gold Elliott Wave Chart Hourly 2017
Click chart to enlarge.

Minute wave b may be a complete double combination. These are very common structures. The most common combination of corrective structures in a double is a zigzag and a flat.

Minute wave c continued higher during Wednesday’s session. Within minute wave c, there is still alternation between minuette waves (ii) and (iv).

The channel about minor wave B is adjusted today to contain all of its movement. When price clearly breaks below the lower edge of this channel, that shall provide some confidence in a possible trend change.

ALTERNATE HOURLY CHART

Gold Elliott Wave Chart Hourly 2017
Click chart to enlarge.

What if a flat correction is still unfolding for minute wave b and minuette wave (b) within it is still incomplete?

Both waves A and B subdivide as threes within minute wave b, as they must for a flat correction.

There is now a problem within this wave count of the regular flat of minuette wave (b). Higher movement during Wednesday’s session now sees subminuette wave c close to 1.618 the length of subminuette wave a; within regular flats, C waves are normally close to even in length with wave A. This reduces the probability of this alternate a little further today because it no longer has the right look.

This wave count allows for further sideways movement in an ever increasing range.

WEEKLY CHART IV

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

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.

The Morning Doji Star at the low labelled intermediate wave (B) will not be considered as a reversal pattern here because it comes in what is essentially a sideways movement. It does not come after a downwards wave, so there is nothing to reverse.

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 also must see the rise up to the high labelled intermediate wave (A) as a five wave impulse, not a three wave zigzag. This looks a little forced, so it reduces the probability of this wave count.

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.

The decline in volume is bearish, but it does not mean upwards movement must stop here. Price can continue higher on declining volume for another few weeks before a trend change as it did in February of this year.

On Balance Volume remains bullish. The long lower wick on this weekly candlestick is bullish.

ATR is bearish.

Overall, this chart is slightly bullish.

DAILY CHART

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

Wednesday’s session moved price higher but with lighter volume. On Balance Volume is very close to resistance. ADX is just now extreme. Together this looks like a high may be in place here or very soon indeed.

Apart from the upwards day of the 17th of May, which looks like a blowoff top, strongest volume is for downwards days. This is bearish.

GDX

DAILY CHART

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

The weak bearish signal noted yesterday from On Balance Volume was today negated. The yellow support line is redrawn.

A slight increase in volume for today’s outside day, which had a balance of volume upwards, is slightly bullish.

The flag pattern is a continuation pattern and the breakout is expected to be upwards. This is contradicted by the recent volume profile supporting downwards movement over upwards.

On Balance Volume will again be watched carefully. A breakout there may indicate the next direction for price.

This analysis is published @ 11:26 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 – 31st May, 2017

GOLD Elliott Wave Technical Analysis – 27th March, 2017

Downwards movement was expected to start the new trading week, but this is not what happened.

Continue reading GOLD Elliott Wave Technical Analysis – 27th March, 2017

GOLD Elliott Wave Technical Analysis – 6th December, 2016

Price has moved sideways to complete a very small inside day. The analysis is essentially unchanged.

Continue reading GOLD Elliott Wave Technical Analysis – 6th December, 2016

GOLD Elliott Wave Technical Analysis – 13th September, 2016

Upwards movement was expected for Tuesday’s session but did not happen.

Price moved lower but remains above the invalidation point.

Continue reading GOLD Elliott Wave Technical Analysis – 13th September, 2016

GOLD Elliott Wave Technical Analysis – 28th July, 2016

A little upwards movement was followed by some downwards movement, exactly as expected.

Continue reading GOLD Elliott Wave Technical Analysis – 28th July, 2016

GOLD Elliott Wave Technical Analysis – 25th May, 2016

Price continued lower, which is what the wave count expected while price remained within the channel.

Continue reading GOLD Elliott Wave Technical Analysis – 25th May, 2016

GOLD Elliott Wave Technical Analysis – 2nd May, 2016

Price has moved a little lower after a channel breach of the hourly chart. The long term Elliott wave targets remain the same.

Continue reading GOLD Elliott Wave Technical Analysis – 2nd May, 2016

GOLD Elliott Wave Technical Analysis – 17th March, 2016

A small correction followed by more upwards movement is exactly what was expected.

Summary: If price remains above 1,255.66 and makes a new high above 1,266.27, then it would be most likely that a third wave up is underway towards 1,327. Alternatively, a new low below 1,255.56 would indicate that a second wave correction is deepening towards 1,243.50. The trend for Gold remains up with a fifth wave up underway. Although the hourly wave counts are labelled “main” and “alternate” they have an even probability; price will tell us which one is correct within the next 24 hours.

New updates to this analysis are in bold.

Last published weekly chart is here.

DAILY ELLIOTT WAVE COUNT

Gold Elliott Wave Chart Daily 2016
Click chart to enlarge.

Gold has very likely changed from bear to bull.

So far, within the first five up, the middle of the third wave is now most likely complete. The strongest move may still be ahead. Gold often exhibits swift strong fifth waves typical of commodities.

Ratios within minor wave 3 are: there is no Fibonacci ratio between minute waves iii and i, and minute wave v is just 0.07 short of 1.618 the length of minute wave i.

There is perfect alternation between the deep double zigzag of minor wave 2 and the very shallow 0.23 expanded flat correction of minor wave 4.

Minor wave 4 is within the price territory of one lesser degree. Minute wave iv has its range from 1,261.94 to 1,190.9.

Upwards movement has confirmed that the last wave down within minor wave 4 is complete. The probability that minor wave 4 in its entirety is complete is high. Within minor wave 5, no second wave correction may move beyond the start of its first wave below 1,225.95.

Minor wave 1 lasted one day. Minor wave 2 lasted nine days (one longer than a Fibonacci eight). Minor wave 3 lasted fifty four days (one short of a Fibonacci fifty five). Minor wave 4 lasted seven days (one short of a Fibonacci eight).

At this stage, minor wave 5 may be expected to last either a Fibonacci five or eight days. It may be swift and strong but not necessarily extended. It is very likely to end with a strong upwards day on a volume spike.

MAIN HOURLY ELLIOTT WAVE COUNT

Gold Elliott Wave Chart Hourly 2016
Click chart to enlarge.

There is now a clear five up on the hourly chart. This provides further confidence that minor wave 4 is most likely over.

Ratios within minute wave i are: there is no Fibonacci ratio between minuette waves (i) and (iii), and there is no Fibonacci ratio between minuette wave (v) and either of (i) or (iii).

Minor wave 5 must subdivide as a five wave structure, either an impulse or an ending diagonal.

If minor wave 5 is unfolding as an impulse, then within it minute wave i is complete. The question today is whether or not minute wave ii is complete.

Minute wave ii may be complete as a relatively quick shallow zigzag ending just short of the 0.382 Fibonacci ratio. It shows on the daily chart as a small green doji. This is possible if minor wave 5 is not going to be a long extension like minor wave 3. As price fell for minute wave ii, it comes on declining volume at the hourly chart level. This fall in price is not supported by volume. This looks like a correction and not a new trend.

The middle of the third wave of minuette wave (iii) has strongest volume. Minuette wave (iii) has strongest momentum within minute wave i. This wave count fits the volume profile and fits with MACD.

At 1,327 minute wave iii would reach 1.618 the length of minute wave i.

At 1,338 minor wave 5 would reach 2.618 the length of minor wave 1.

Within minute wave iii, no second wave correction may move beyond its start below 1,255.66.

A new high above 1,266.27 would add confidence to this hourly wave count as at that stage the alternate below would reduce in probability.

ALTERNATE HOURLY ELLIOTT WAVE COUNT

Gold Elliott Wave Chart Hourly 2016
Click chart to enlarge.

Although this is labelled an alternate hourly wave count, it is my judgement that it has an even probability with the main hourly wave count. We need to let price tell us which one is correct.

Minute wave ii may be incomplete. It would most likely continue lower as a double zigzag.

Within a double zigzag, the purpose of the second zigzag is to deepen a correction when the first zigzag does not move price deep enough. To achieve this purpose X waves within double zigzags are normally shallow and often also quick.

For minuette wave (x) to be shallow it would be unlikely to move above the start of subminuette wave c within minuette wave (w) at 1,266.27. A new high above 1,266.27 would reduce the probability of this wave count in favour of the main hourly wave count.

A new low below 1,255.66 would invalidate the main hourly wave count in favour of this alternate. At that stage, expect it is most likely that minute wave ii is continuing lower as a double zigzag. The most likely target for it to end is the 0.618 Fibonacci ratio of minute wave i at 1,243.50.

The green channel is drawn using Elliott’s first technique about minute wave i. Minute wave ii should be expected to be very likely to break out of this channel.

Minute wave ii may not move below the start of minute wave i at 1,225.95.

TECHNICAL ANALYSIS

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

Thursday’s small red candlestick with a long upper shadow is more bearish than bullish. The small real body and small range for Thursday indicate indecision, a balance between bulls and bears with the bears winning. A slight increase in volume for this small downwards day is not of great concern, but it is of very slight concern. It indicates that a little more downwards movement may be likely as there is some support for the fall in price from volume. This favours the alternate hourly Elliott wave count.

Price has not yet broken out of a trading range between about 1,280 and 1,225 delineated by pink trend lines. We need to see a breakout above or below this range to have confidence that the next wave up or down is underway.

During this consolidation, which began back on 7th March, it is still an upwards day which has strongest volume. This indicates an upwards breakout is more likely than downwards, and this supports the Elliott wave count.

ADX is flat to slightly declining, indicating the market is not yet trending; it is still consolidating. A range bound trading approach is indicated or stepping aside and waiting for a breakout.

Price recently found support and is moving up. A range bound approach would expect upwards movement to overall continue and to not end until price finds resistance and Stochastics is overbought at the same time.

ATR over the last few days has begun to level off. It is now indicating that the market is not trending; it is consolidating. Both ADX and ATR are lagging indicators as they are both based on 14 day averages.

On Balance Volume may be useful in conjunction with volume bars to indicate the next direction for price. A break below the orange line would be bearish. A break above the green line would be bullish. OBV has come down again to find support at the orange line. If this line holds and OBV turns upwards for the next day, then the strength of that line will be reinforced, and this would be a reasonable bullish signal.

This analysis is published @ 07:48 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 March, 2016