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GOLD Elliott Wave Technical Analysis – 9th February, 2017

A breach of the trend channel and a new low below 1,227.82 has invalidated the main wave count and confirmed an alternate.

Continue reading GOLD Elliott Wave Technical Analysis – 9th February, 2017

The Trading Room – 8th February, 2017

Introduction:

The Trading Room is a new idea that I want to test and develop over the next few months.

I find myself spending a lot of time writing and publishing analysis of Gold and the S&P500 (over at Elliott Wave Stock Market) when those markets are quiet and range bound and offer no good trading opportunities. This focus on inactive markets takes focus away from markets that are trending and do offer good trading opportunities.

What if the focus was on finding good trading opportunities over a range of markets rather than daily analysis of specific markets? What if the Trading Room can be the platform for publishing these good trading opportunities?

Therefore, this Trading Room approach will look over a range of markets to identify any possible trading set ups which may unfold now or over the next few days, and the focus will be on trading set ups and not on teaching and learning Elliott wave.

Analysis will be brief and to the point.

As always, it is essential that anyone using this analysis for trading advice manages risk carefully. Follow my two Golden Rules:

1. Always use a stop.

2. Never invest more than 1-5% of equity on any one trade.

Trading is about probabilities, not certainties. Failure to follow my two Golden Rules of trading indicates failure to manage risk.

Today’s Trading Room focuses on NZDUSD, EURUSD, USD, and GDX:

EURUSD

TECHNICAL ANALYSIS

EURUSD Chart Daily 2017
Click chart to enlarge.

So far upwards movement should be assumed to be a counter trend movement, until proven otherwise. The prior wave down put ADX into extreme and upwards movement from the 3rd of January has brought ADX back down from extreme. There is again room for a trend to develop.

Single divergence with Stochastics on its own is not enough to indicate a high in place. A breach of a support line should be seen before entering short.

Stockcharts do not offer volume data for currencies, so this is analysed below with BarChart data.

ELLIOTT WAVE ANALYSIS + VOLUME ANALYSIS

EURUSD Chart Daily 2017
Click chart to enlarge.

The best fit channel is slightly adjusted to be more conservative than the last published chart for EURUSD. If price can print a full daily candlestick below the lower edge of the yellow channel, that would offer further confidence in a trend change. When that trend line is breached, then it should offer resistance.

Stops may be set a little above the trend line offering a low risk high reward opportunity. Do not set stops too close to the line; allow the market room to move. Sometimes trend lines are overshot and this trend line is not perfect.

On Balance Volume has confidently breached a horizontal support line which offers strong technical significance. A retest of resistance at that line shows it holds. This is a strong bearish signal.

NZDUSD

TECHNICAL ANALYSIS

NZDUSD Chart Daily 2017
Click chart to enlarge.

Classic technical analysis of this pair is very bearish. The long upper wick on this last daily candlestick is bearish. This trend is extreme; it will end sooner rather than later.

ELLIOTT WAVE ANALYSIS + VOLUME ANALYSIS

NZDUSD Chart Daily 2017
Click chart to enlarge.

On Balance Volume has no trend line. Any trend line drawn would have too steep a slope to have reasonable technical significance.

If an expanding diagonal is unfolding, then minute iv must be either over now or very close indeed. There is almost no room left for it to move.

I have been analysing NZDUSD (because I’m a Kiwi) for years using Elliott wave and I will note that NZDUSD rarely offers good looking Elliott wave structures. Therefore, I place more weight in classic analysis of this pair than Elliott wave analysis. The Elliott wave analysis is supplementary.

I will wait for the green support line to be fully breached before going short here.

USD INDEX

TECHNICAL ANALYSIS

USD Chart Daily 2017
Click chart to enlarge.

There is not enough bullish indication here to go long yet. Upwards movement on this chart is a clear trend and downwards movement is choppy and overlapping, so downwards movement looks more like a counter trend movement. If that conclusion is correct, then USD should break out upwards.

The larger trend at the monthly chart level remains up and the 200 day moving average still has a positive slope.

ELLIOTT WAVE ANALYSIS

USD Chart Daily 2017
Click chart to enlarge.

Neither Stockcharts nor BarChart have volume data.

The short term yellow resistance line has been breached. However, the long upper wicks on the last two daily candlesticks gives some cause for concern.

Price may be bouncing up from the lower edge of the best fit channel. With another upwards day moving further away from the trend line, a long position may be entered. A stop may be set just below the last low.

GDX

TECHNICAL ANALYSIS

GDX Chart Daily 2017
Click chart to enlarge.

Next resistance is at 26.0.

This chart is provided today mostly for members of Elliott Wave Gold and not because I see a trading set up here, because I don’t. (That doesn’t mean one does not exist, only that I don’t see it today).

Going long here risks entering at the end of the trend. ADX is nearing extreme and price has closed above the upper edge of Bollinger Bands now for the last four sessions.

Going short here is trying to pick a top. Before going short at least two of the following should be seen: a bearish candlestick pattern, a break of support by On Balance Volume, divergence with price from RSI while overbought, price to move below the short term 13 day moving average.

This analysis is published @ 02:59 a.m. EST.

GOLD Elliott Wave Technical Analysis – 6th February, 2017

Another upwards day fits the second hourly Elliott wave count. Price is now just above the target range, which was 1,219.11 to 1,233.43.

Continue reading GOLD Elliott Wave Technical Analysis – 6th February, 2017

GOLD Elliott Wave Technical Analysis – 22nd December, 2016

Another small inside day fits both Elliott wave counts, but price behaviour is pointing to one scenario more strongly than the other.

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

GOLD Elliott Wave Technical Analysis – 19th December, 2016

A small upwards day fits all four Elliott wave counts. Price behaviour is now pointing to which wave count looks most likely.

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

GOLD Elliott Wave Technical Analysis – 21st November, 2016

Last analysis expected upwards movement to begin the new week. So far this is what has happened.

Summary: Upwards movement is expected from here. The target at 1,533 may be met in about six months time. There is divergence with price and Stochastics and RSI indicating bears are exhausted. If this view is wrong today, then Gold may make one final new low to a target at 1,203 before turning. A new high above 1,221.62 would add confidence in a trend change.

New updates to this analysis are in bold.

Grand SuperCycle analysis is here.

Last monthly and weekly charts are here.

DAILY ELLIOTT WAVE COUNT

Gold Elliott Wave Chart Daily 2016
Click chart to enlarge.

The larger structure of primary wave X may be either a double zigzag or a double combination. The second structure in this double for primary wave Y may be either a zigzag (for a double zigzag) or a flat or a triangle (for a double combination).

It is my judgement at this stage that it is more likely primary wave X will be a double zigzag due to the relatively shallow correction of intermediate wave (X). Although intermediate wave (X) is deep at 0.71 the length of intermediate wave (W), this is comfortably less than the 0.9 minimum requirement for a flat correction. Within combinations the X wave is most often very deep and looks like a B wave within a flat.

However, there is no minimum nor maximum requirement for X waves within combinations, so both a double zigzag and double combination must be understood to be possible. A double zigzag is more likely and that is how this analysis shall proceed.

Within the second structure, minor wave A should be a five wave structure. This now looks complete.

Minor wave B found resistance at the lower edge of the wide parallel channel about primary wave X. Minor wave C may now be complete at the hourly chart level. Minor wave C has no Fibonacci ratio to minor wave A. Intermediate wave (Y) is just 0.02 longer than equality in length with intermediate wave (W).

At 1,533 primary wave Y would reach equality in length with primary wave W.

Primary wave W lasted seven months. Primary wave Y may be expected to be about even in duration.

HOURLY ELLIOTT WAVE COUNT

Gold Elliott Wave Chart Hourly 2016
Click chart to enlarge.

Minor wave B completed as a regular contracting triangle. Gold often exhibits surprisingly short waves out of its triangles.

Minor wave C has moved slightly below the end of minor wave A, avoiding a truncation. The structure now looks complete at the hourly chart level.

Within minor wave C, there are no adequate Fibonacci ratios between minute waves i, iii and v.

Within the new upwards movement, the spike labelled subminuette wave i may disappear from BarChart data tomorrow. It is not noticed on other Gold data feeds.

Intermediate wave (A) should subdivide as a five wave structure if cycle wave a is a double zigzag. Within intermediate wave (A), the upcoming correction for minor wave 2 may not move beyond its start below 1,204.05.

When there is a clear five up on the hourly chart, then more confidence may be had in this wave count.

A new high above 1,221.62 would add confidence. At that stage, the second hourly chart below would be invalidated.

SECOND HOURLY ELLIOTT WAVE COUNT

Gold Elliott Wave Chart Hourly 2016
Click chart to enlarge.

What if minor wave B was not a triangle but completed as a zigzag? Minor wave C may have begun earlier.

Minor wave C must complete as a five wave structure. It may need on final new low to end minute wave v within it.

Within minor wave C, there is alternation between the zigzag of minute wave ii and the combination of minute wave iv.

At 1,203 minute wave v would reach 1.618 the length of minute wave i. There is no Fibonacci ratio between minute waves i and iii, so a ratio for minute wave v is likely.

Minute wave iv may not move into minute wave i price territory above 1,221.62.

While this wave count is entirely possible, it is judged to have a lower probability than the first hourly chart today.

ALTERNATE DAILY ELLIOTT WAVE COUNT

Gold Elliott Wave Chart Daily 2016
Click chart to enlarge.

This alternate wave count expects that the large upwards zigzag from the low of 1,046 in December 2015 to the last high of 1,374 in July 2016 is a complete correction. The trend is still down; Gold is still in a bear market.

If there has been a cycle degree trend change at the high labelled cycle wave b, then the new wave down must begin with a five wave structure. At this stage, there looks to be too much overlapping for an impulse, so a leading diagonal is considered.

Within leading diagonals, sub-waves 2 and 4 must subdivide as zigzags. Sub-waves 1, 3 and 5 are most commonly zigzags but sometimes may also appear to be impulses.

Within this structure, all sub-waves subdivide as zigzags. This wave count meets all Elliott wave rules. This diagonal looks correct.

Primary wave 1 lasted 94 days. Primary wave 2 may initially be expected to last about a Fibonacci 55 or 89 days. It should be a big three wave structure.

At this stage, there is no divergence in expected direction between this alternate and the main wave count. The structure of upwards movement, if it is clearly a three or five, may assist to tell us which wave count is correct in coming weeks. For now this alternate must be judged to have a low probability due to the problems outlined. It is published to consider all possibilities.

TECHNICAL ANALYSIS

WEEKLY CHART

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

Last week completes with a smaller range and a substantial decline in volume. The fall in price is not supported by volume, so it is suspicious. It looks like bears are tired.

Price may find support here about 1,200.

On Balance Volume has come down to almost touch the yellow support line. There is a very little room for more downwards movement. This line should be expected to provide support and assist to halt the fall in price either here or very soon.

RSI is not extreme and does not exhibit divergence with price. There is room still for price to fall further.

DAILY CHART

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

A small upwards day with higher high and a higher low has moved price higher. The upper wick of today’s candlestick is relatively long and the real body is small. This is not a strong upwards day. Volume is light; the rise in price today did not have support from volume. This candlestick looks like a small counter trend correction.

Sometimes Gold’s new waves do begin with some hesitancy. However, at this stage, today’s candlestick favours the second hourly chart which expects Gold to make one more slight new low before turning.

There are no support lines at the daily chart level for On Balance Volume to help stop a fall in price here.

There is still mid term divergence between price and RSI and Stochcastics at the two lows of the 7th of October and the 18th of November. This is regular bullish divergence and indicates bears are exhausted.

ADX has slightly increased further today. It still indicates a downwards trend is in place. This is a lagging indicator though as it is based upon a 14 day average.

If there is a downwards trend, then it is showing some signs of weakness; ATR is declining.

Bollinger Bands continue to widen though indicating a trending market.

The Elliott wave count here is indicating a trend change before these indicators. If the main Elliott wave count is wrong, then the second hourly chart may be right and Gold may make one more low before turning.

This analysis is published @ 09:02 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 – 21st November, 2016

GOLD Elliott Wave Technical Analysis – 2nd November, 2016

Yesterday’s Elliott wave analysis expected upwards movement from Gold.

Price has moved higher as expected.

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

GOLD Elliott Wave Technical Analysis – 21st September, 2016

Upwards movement was expected.

Continue reading GOLD Elliott Wave Technical Analysis – 21st September, 2016

GOLD Elliott Wave Technical Analysis – 29th August, 2016

All three daily Elliott wave counts remain valid.

The invalidation / confirmation point may now be moved lower today.

Summary: Some more downwards movement next week looks most likely, to about 1,279. If this target is wrong, it may be a little too low. In the short term, a new high now above 1,330.01 would be confirmation that the correction is likely over and the next wave up has begun.

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. If price moves above 1,330.01 in the short term, then it may also be possible that minute wave iii is not over. No second wave correction within minute wave iii may move beyond the start of its first wave above 1,356.85. A new high above 1,356.85 would invalidated any continuation of minute wave iii and provide further confidence to the alternate wave count.

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.

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 38 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.

HOURLY ELLIOTT WAVE COUNT

Gold Elliott Wave Chart Hourly 2016
Click chart to enlarge.

Minor wave C must subdivide as a five wave structure. This wave count would be confirmed with a new low below 1,310.84.

Minor wave C still needs more downwards movement. Within minor wave C, minute wave iii is now complete. Minute wave ii was a deep zigzag, so to exhibit alternation minute wave iv may be a more shallow sideways structure and would most likely be a combination, flat or triangle. Minute wave iv may not move into minute wave i price territory above 1,330.01.

When minute wave iv is over, then the target may be calculated at minute degree also. At that stage, it may change or widen to a zone. If it changes, it may be moved upwards.

ALTERNATE DAILY ELLIOTT WAVE COUNT

Gold Elliott Wave Chart Daily 2016
Click chart to enlarge.

The duration of minute wave ii now gives this wave count the wrong look. Lower degree second waves should be more brief in duration than second waves of a higher degree. Here, minute wave ii has lasted 19 days, minor wave 2 lasted 11 days, and intermediate wave (2) lasted 6 days.

At 1,437 intermediate wave (3) would reach equality in length with intermediate wave (1). At 1,552 intermediate wave (3) would reach 1.618 the length of intermediate wave (1).

Minute wave ii may not move beyond the start of minute wave i below 1,310.84.

A new high above 1,356.85 would add further confidence to this wave count. At that stage, alternate ideas for the main wave count would be invalidated.

ALTERNATE HOURLY ELLIOTT WAVE COUNT

Gold Elliott Wave Chart Hourly 2016
Click chart to enlarge.

A final fifth wave down would still be required for this alternate wave count. Upwards movement for Friday’s session will not subdivide as a five; it fits only as a three because of the deep spike labelled sub micro wave (B).

Friday’s session would have to be another fourth wave correction for this alternate.

After a slight new low, then this alternate wave count would expect upwards movement.

A new high above 1,339.48 is required for confidence in this wave count. At that stage, a third wave up at four degrees should be expected to be in the very early stages.

ALTERNATE III 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 momentum and 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.

The long lower wick of today’s candlestick is bullish as is the colour. However, the decline in volume is bearish; this upwards movement for Monday is not supported by volume, so it is more likely a counter trend movement (within a small downwards swing within the larger consolidation) than the start of a more sustainable upwards swing.

The 55 day moving average may provide some support here.

On Balance Volume may find resistance at the purple line. This may assist to halt the rise in price. A break above the purple line would be a reasonably strong bullish signal.

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. This approach expects the same movement next as the main Elliott wave count.

Bollinger Bands are widening now for three 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.

Overall, the decline in volume for Monday suggests a little more downwards movement ahead for price to find support about 1,310 – 1,305 to end this downwards swing.

This analysis is published @ 09:16 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 – 29th August, 2016

GOLD Elliott Wave Technical Analysis – 9th August, 2016

Upwards movement was expected, although it was expected to be stronger than what transpired.

Summary: The trend is up. The target remains at 1,582. Confidence in targets may be had with price movement above 1,349.25. There is still some bearish indication from volume to warrant extreme caution with any long positions at this time, so for this reason an alternate wave count today is published. One risk management technique for positive long positions would be to move stops up to break even today. Always use a stop for all positions and do not invest more than 3% of equity on any one trade at this time.

New updates to this analysis are in bold.

Grand SuperCycle analysis is here.

WEEKLY ELLIOTT WAVE COUNT

Gold Elliott Wave Chart Weekly 2016
Click chart to enlarge.

This downwards movement labelled super cycle wave (a) subdivides as a double zigzag from the all time high.

Within the first zigzag labelled cycle wave w, primary wave C is 10.13 short of 1.618 the length of primary wave C. It should be noted that primary wave B is a rare running flat because intermediate wave (C) failed to move beyond the end of intermediate wave (A). This truncation occurred before a very strong downwards movement, which is the kind of situation in which a running flat may appear.

Within the second zigzag labelled cycle wave y, there is no Fibonacci ratio between primary waves A and C. Primary wave C is an ending contracting diagonal which meets all Elliott wave rules.

Grand Super Cycle wave IV may not be a combination because the first wave subdivides as a multiple, and the maximum number of corrective structures within a multiple is three. To label multiples within multiples increases the maximum beyond three, violating the rule.

It may not be a zigzag because Super Cycle wave (a) subdivides as a three and not a five.

This leaves two groups of corrective structures: flats or triangles.

Within an expanded flat or running triangle, Super Cycle wave (b) may make a new high above the start of Super Cycle wave (a) at 1,920.18.

Within a flat, Super Cycle wave (b) must retrace a minimum 90% of Super Cycle wave (a) at 1,833.71.

Within a triangle, there is no minimum nor maximum requirement for Super Cycle wave (b). The only requirement for a B wave within a triangle is it must be a corrective structure.

Super Cycle wave (b) may be any one of 23 possible corrective structures. First, a move of this size should have a clear five up on the daily and weekly charts.

So far there is a five up on the weekly chart that is now labelled primary wave 1. This was followed by a shallow three down labelled primary wave 2, which should be followed by another five up that is for now labelled primary wave 3 but may also be labelled primary wave C.

Within primary wave 3 (or primary wave C), no second wave correction may move beyond the start of its first wave below 1,200.07.

When this next five up is complete, then an alternate wave count at the weekly chart level would be required. Cycle wave a is most likely to unfold as a five wave structure, but it may also be a three. When a 5-3-5 up is complete, then two wave counts at the weekly chart level would be required: one for cycle wave a as a continuing impulse and the other for cycle wave a as a completed zigzag.

The proportions of this wave count look good. Within both zigzags of cycle waves w and y, the C waves are longer in length and duration than the A waves. Cycle wave X is very brief and shallow, exactly as an X wave within a double zigzag should be. The only concern I have with this wave count would be the running flat of primary wave B within cycle wave w.

DAILY ELLIOTT WAVE COUNT

Gold Elliott Wave Chart Daily 2016
Click chart to enlarge.

Primary wave 2 is a complete expanded flat correction. Price from the low labelled primary wave 2 has now moved too far upwards to be reasonably considered a continuation of primary wave 2. Primary wave 3 is very likely to have begun and would reach 1.618 the length of primary wave 1 at 1,582.

Primary wave 3 may only subdivide as an impulse.

So far intermediate waves (1) and (2) may be complete within primary wave 3. The middle of primary wave 3 may have begun and may also only subdivide as an impulse.

Within intermediate wave (3), the end of minor wave 1 is moved up to the last high. This fits on the hourly chart although it looks odd here on the daily chart. There was a small fourth wave correction up at the end of minor wave 1 and it subdivides on the hourly chart as an impulse. Minor wave 2 may be a complete zigzag, also subdividing as a zigzag on the hourly chart. If minor wave 2 is over, it would be 0.50 the depth of minor wave 1.

No second wave correction may move beyond the start of its first wave below 1,310.84 within minor wave 3.

At 1,437 intermediate wave (3) would reach 1.618 the length of intermediate wave (1). If price keeps going upwards through this first target, or if it gets there and the structure is incomplete, then the next target would be at 1,552 where intermediate wave (3) would reach 2.618 the length of intermediate wave (1).

The support line in cyan is adjusted today. Draw it from the start of intermediate wave (1) to the end of intermediate wave (2). Downwards corrections may bounce upwards from about this support line.

There may now be four overlapping first and second waves complete: primary, intermediate, minor and now minute. This wave count expects to see an increase in upwards momentum beginning this week.

HOURLY ELLIOTT WAVE COUNT

Gold Elliott Wave Chart Hourly 2016
Click chart to enlarge.

If the cyan support line copied over here from the daily chart is working, then minute wave ii should be over. Minute wave iii upwards should have begun.

At 1,513 minor wave 3 would reach 1.618 the length of minor wave 1.

Within minor wave 3, minute waves i and now ii may be complete. Minute wave ii is a deep 0.66 zigzag, ending close to the cyan support line. At 1,420 minute wave iii would reach 1.618 the length of minute wave i, and at 1,476 minute wave iii would reach 2.618 the length of minute wave i.

Within minute wave ii, 1,349.25 is the low labelled minuette wave (a). A new high above this point could not be a fourth wave correction within an impulse developing lower. A new high above 1,349.25 would confirm that the downwards wave labelled minute wave ii was a three and was over. At that stage, more confidence may be had in targets and the overall upwards direction expected from this wave count.

The invalidation point will remain at the start of minute wave i while price remains below this confirmation point. If minute wave ii continues lower, it may not move beyond the start of minute wave i below 1,310.84.

Within minute wave iii, so far two first and second waves may be complete, but only within minuette wave (i). When minuette wave (i) is complete, then another correction may unfold downwards and may show up on the daily chart as one or more red candlesticks or doji for minuette wave (ii). Minuette wave (ii) may not move beyond the start of minuette wave (i) below 1,330.01.

THIRD WAVE EXAMPLE – DAILY CHART

Gold Daily 2016
Click chart to enlarge.

In discussing the curved look to Gold’s impulses, particularly for its third waves, here is an example.

Within primary wave 1, the third wave of minor wave 3 had a strong curved look to it. The impulse begins more slowly and has deep and relatively time consuming second wave corrections: Minor wave 2 was 0.68 of minor wave 1, minute wave ii was 0.76 of minute wave i, minuette wave (ii) was 0.56 of minuette wave (i), and subminuette wave ii was 0.64 of subminuette wave i.

The curved look comes from the disproportion between second and fourth wave corrections within the impulse. Here, minute wave ii lasted 4 days and shows clearly on the daily chart yet minute wave iv was over within one day and does not show up with any red candlesticks or doji on the daily chart.

Momentum builds towards the middle of the impulse, continuing to build further during the fifth wave and ending in a blowoff top. This is typical of Gold and all commodities.

This tendency to blowoff tops and curved impulses is particularly prevalent for Gold’s third waves.

ALTERNATE WEEKLY ELLIOTT WAVE COUNT

Gold Elliott Wave Chart Weekly 2016
Click chart to enlarge.

I have found a solution for Super Cycle wave (a) downwards as a five wave impulse, which meets all Elliott wave rules.

Ratios within Super Cycle wave (a) are: cycle wave III is just 5.19 short of 1.618 the length of cycle wave I, and cycle wave V has no Fibonacci ratio to either of cycle waves I or III.

Within Super Cycle wave (a), there is gross disproportion between cycle wave II and primary wave 2 one degree lower. Cycle wave II is very brief at six weeks and primary wave 2 is much longer in duration at 40 weeks. This gives this part of the wave count a very odd look. No rules are broken, so the wave count is technically valid.

Cycle wave III ends with a slight truncation for primary wave 5 by 1.96.

If Super Cycle wave (a) was a five wave impulse, then Super Cycle wave (b) may not move beyond its start above 1,920.18. Super Cycle wave (b) may be any one of more than 23 possible corrective structures. It may possibly now be a complete zigzag.

ALTERNATE DAILY ELLIOTT WAVE COUNT

Gold Elliott Wave Chart Daily 2016
Click chart to enlarge.

If it is over, then Super Cycle wave (b) would have been remarkably brief for a Super Cycle degree wave. It is possible that it may continue further sideways though. The zigzag upwards may have been only cycle wave a of a larger more time consuming flat or triangle.

If this alternate wave count is confirmed with a new low below 1,200.07, then alternate ideas must be considered for Super Cycle wave (b). At this stage, those ideas would not diverge with this chart; they would expect some downwards movement from here.

If a zigzag upwards is complete for Super Cycle wave (b) (or cycle wave a within it), then downwards movement should continue from here.

So far downwards movement may be an impulse for intermediate wave (1), followed by an expanded flat for intermediate wave (2).

Within intermediate wave (3) down, minor wave 1 may be an incomplete impulse. When minor wave 1 is complete, then minor wave 2 may not move beyond the start of minor wave 1 above 1,366.87.

Within minor wave 1, minute wave iv may not move into minute wave i price territory above 1,349.25. This price point would be a very short term invalidation of this alternate idea. If it is passed, then the main wave count would increase in probability.

TECHNICAL ANALYSIS

WEEKLY CHART

Gold Weekly 2016
Click chart to enlarge.

The week before last completed a bullish engulfing candlestick pattern supported by stronger volume than the prior downwards week. Last week made a new high, then completed a red candlestick on lighter volume. Overall, the fall in price last week is not supported by volume at the weekly chart level. Last week looks to more likely be a corrective movement than a new trend.

On Balance Volume is still relatively bullish above the purple trend line, which is redrawn at the end of last week. A break below the purple line would be bearish. A break above the green line would be bullish.

RSI is not extreme. There is room for price to rise or fall.

DAILY CHART

Gold Daily 2016
Click chart to enlarge.

From the last high on 2nd of August, volume increased as price fell. The fall in price was supported by volume.

Overall, price for the last two days has risen in a small range on declining volume. The volume profile short term is bearish. This is concerning for the main wave count and the reason today for publishing an alternate.

It looks like price is range bound between resistance about 1,375 and support about 1,305. ADX has been mostly declining since 12th of July and price has overall moved sideways within this range. ATR has also been declining during this period, This supports ADX in expecting the market is consolidating. Volume is declining as price moves sideways.

It is the upwards day of 8th of July, during this big consolidation, that has strongest volume suggesting an upwards breakout is more likely than downwards.

It should be expected during a consolidation that price will swing from support to resistance and back again. Stochastics may be used to indicate when one swing ends and the next begins. At this stage, Stochastics is returning from overbought and is now about neutral. A downwards swing may be expected to continue until Stochastics reaches oversold and price reaches support about 1,305 at the same time.

Price swings during a consolidation do not move in straight lines, and support or resistance may be overshot yet price returns back to within the consolidation. This is one reason why consolidations are so difficult to trade.

RSI is close to neutral. There is room for price to rise or fall.

Trend lines on On Balance Volume are redrawn today. A break above the purple line would be a bullish signal. A break below the yellow line would be a bearish signal.

This analysis is published @ 08:22 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 – 9th August, 2016

GOLD Elliott Wave Technical Analysis – 5th August, 2016

A correction was expected to end about 1,347 – 1,346. A lower target was considered at 1,333.

Price moved well below the preferred higher target.

Continue reading GOLD Elliott Wave Technical Analysis – 5th August, 2016

GOLD Elliott Wave Technical Analysis – 26th July, 2016

Upwards movement was expected.

A new high above 1,323.56 adds some confidence to the main Elliott wave count.

Continue reading GOLD Elliott Wave Technical Analysis – 26th July, 2016

GOLD Elliott Wave Technical Analysis – 22nd July, 2016

In the short term, a small correction to about 1,325 was expected.

Price moved lower, reaching 1,320.

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