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GOLD Elliott Wave Technical Analysis – 4th October, 2017

All three hourly Elliott wave charts published yesterday expected at least some upwards movement. So far that is what has happened. Classic analysis will be used today to judge which of the three scenarios looks most likely.

Summary: Assume the trend remains down while price remains below 1,289.67.

A new high above 1,289.67 (the high for 2nd of October) by any amount at any time frame would indicate more upwards movement. At that stage, use the target at 1,330 – 1,334 in the first instance.

If upwards movement shows reasonable strength with support from volume, then it may go as high as 1,420, but that would require a new high above 1,357.09 for reasonable confidence.

Always trade with 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.

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 wave 1 may have been over at the last high and the current pullback may be minor wave 2. Minor wave 2 may not move beyond the start of minor wave 1 below 1,205.41.

Minor wave 2 may not be over and may continue lower to reach a more normal depth of about 0.618 the length of minor wave 1, about 1,261. This would also see minor wave 2 have a better proportion to minor wave 1 in terms of duration; minor wave 1 lasted 44 days and so far minor wave 2 has lasted only 18 days. If it continues now for another 3 days, it may total a Fibonacci 21.

HOURLY CHART

Gold Elliott Wave Chart Hourly 2017
Click chart to enlarge.

BarChart have fixed the problem with their data for current data, but the problem of past data for the sessions from 28th September to 2nd of October is not fixed. As members can see, the data for the whole of minuette wave (b) is still wrong. This was probably some kind of combination; I will analyse that when the data is fixed. At this time, it will make no difference at all to the analysis because it is clear that minuette wave (b) is over no matter what structure it was.

I have checked the subdivisions within minuette wave (c) on PMBull data and this will subdivide neatly into a five wave structure at the hourly chart level.

If minuette wave (c) is not complete, then only subminuette waves i and now ii within it may be over. Subminuette wave ii may be a zigzag that may have ended very close to the 0.618 Fibonacci ratio of subminuette wave i.

However, to see subminuette wave ii as a completed three wave zigzag results in the subdivisions not having as neat a fit as when we see this upwards movement as a five wave structure. Either my labelling here of subminuette wave ii as complete is wrong and it may move higher, or either of the alternate below or the second hourly Elliott wave chart below is right.

This hourly wave count now expects another wave down with some increase in momentum for subminuette wave iii.

If the target for this hourly wave count is wrong, it may not be low enough.

If it continues further, then subminuette wave ii may not move beyond the start of subminuette wave i above 1,289.67.

Price remains so far within the best fit channel, copied over from the daily chart. While price remains within that channel, then no confidence in the idea of a low in place for Gold may be had.

ALTERNATE HOURLY CHART

Gold Elliott Wave Chart Hourly 2017
Click chart to enlarge.

It is possible to see that minor wave 2 could be over by simply moving the degree of labelling within minuette wave (c) all up one degree.

This wave count requires a new high above the high for the 2nd of October (which for BarChart data was at 1,289.67) before any confidence may be had in it.

The trend remains the same until proven otherwise. Assume the trend is down until price proves it is not.

If the next wave up is the start of a third wave at minor degree, then it should have support from volume. Upwards movement does have some support from volume today, but the weak candlestick is problematic for this wave count.

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 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 an incomplete impulse.

Within intermediate wave (A), minor wave 1 will fit as a five wave impulse. While it is possible that minor wave 2 could have been over at the high for the 25th of September, it would be remarkably brief and shallow; the proportions between minor waves 1 and 2 would be very poor.

It is still more likely that minor wave 2 is continuing further as an expanded flat correction. Expanded flats are very common structures. The most common length for their B waves is from 1 to 1.38 times the length of their A waves. Here, minute wave b is now a 1.80 length to minute wave a. This is longer than the most common length but still within allowable limits of up to 2 times the length of minute wave a.

If price continues lower to 1,263 or below, then minute wave b would reach 2 times the length of minute wave a. At that stage, the idea of an expanded flat correction would be discarded based upon a very low probability.

The structure of minute wave b now looks to be complete at the hourly chart level. Here, on the daily chart, it looks like a three wave structure. So far this idea of an expanded flat currently unfolding still has a very good look.

HOURLY CHART

Gold Elliott Wave Chart Daily 2017
Click chart to enlarge.

If price makes a new high above 1,289.67, then both the alternate hourly chart for the first wave count and this hourly chart for the second wave count will be possible. This wave count expects that upwards movement may be more brief: only minute wave c to end minor wave 2 of an expanded flat.

Expanded flats are very common structures. They can be identified as viable possibilities by looking for weakness within their B waves. Here, minute wave b shows a strong decline in volume and a decline in ATR. This offers some support to this wave count. However, there is no divergence with Stochastics at recent lows to indicate weakness, which is often a feature of B waves within expanded flats (often is not the same as always).

Because minute wave b is longer than 1.618 the length of minute wave a, the appropriate target for minute wave c is calculated using the 2.618 Fibonacci ratio. Minute wave c would be extremely likely to make at least a slight new high above the end of minute wave a at 1,292.62 to avoid a truncation and a very rare running flat correction.

Minor wave 2 may not move beyond the start of minor wave 1 above 1,357.09. This is the price point now which differentiates this second Elliott wave count from the first Elliott wave count.

Minute wave c must subdivide as a five wave structure. It would most likely be an impulse, but the less common ending diagonal should be considered if upwards movement is overlapping.

Upwards movement to the high labelled minuette wave (i) for this session will fit as a leading expanding diagonal. Second wave corrections following first wave leading diagonals are usually very deep. For this reason I would expect it to be most likely to see minuette wave (ii) move lower.

Minuette wave (ii) may not move beyond the start of minuette wave (i) below 1,268.42.

TECHNICAL ANALYSIS

WEEKLY CHART

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

Support of the Elliott wave counts which expect overall more downwards movement this week comes from an increase in volume last week for downwards movement, a bearish upper candlestick wick, and a weak bearish signal now from On Balance Volume.

These signals cannot tell us how far price may fall though. Support and resistance may be used as a guide for this. Next strong support for price is about 1,225.

DAILY CHART

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

Price has reacted from resistance about 1,285. The long upper wick on today’s candlestick is bearish. This supports the second Elliott wave count which sees a bounce within a downwards trend and not a trend change at the low.

Upwards movement has support today from volume, so more upwards movement for at least another day may be expected.

On Balance Volume may assist here to show when upwards movement may end at resistance.

The lack of divergence between price and Stochastics at the last low, and RSI not yet oversold, suggests that there is more downside still.

It is my judgement that this classic analysis best supports the second Elliott wave count today.

GDX

DAILY CHART

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

Upwards movement for GDX at this stage looks very much like a small bounce within a larger downwards trend. If resistance at 23.45 gives way, then look for next resistance about 23.85. However, light volume with a small green doji today looks like the bounce may be done here.

The one strong note of caution to the above statement is a bullish signal today from On Balance Volume. The purple trend line was strong, but has recently been weakened with a move below it. Now it may rise further given that On Balance Volume is above this line again.

Like Gold, GDX did not exhibit any divergence with Stochastics at the last low nor did RSI reach oversold. There is room for price to move lower.

Published @ 10:17 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 – 4th October, 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