Tag Archives: gold technical analysis

GOLD Elliott Wave Technical Analysis – 12th January, 2018

An upwards breakout from a consolidation was expected, but it has come much more quickly than expected. A new alternate wave count this week should prepare members if price continues higher from here.

Summary: The main wave count expects a trend change to a new bear market to last one to several years, and the target is 463. However, for confidence in this view, first a new low below 1,324.93 and then a breach of the Elliott channel on the hourly charts by downwards movement is required.

A new alternate expects overall upwards movement from here. It would be confirmed if price makes a new high reasonably above 1,357.09.

[Content protected for Elliott Wave Gold members only. To subscribe click here.] Always manage risk by trading with stops and investing 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.

MAIN ELLIOTT WAVE COUNT

WEEKLY CHART

Gold Elliott Wave Chart Weekly 2018
Click chart to enlarge.

All wave counts expect that Gold completed a large five down from the all time high in November 2011 to the low of December 2015, which is seen on the left hand side of both weekly charts.

If this analysis is correct, then the five down may not be the completion of the correction. Corrective waves do not subdivide as fives; they subdivide as threes. The five down is seen as cycle wave a within Super Cycle wave (a).

All wave counts then expect cycle wave b began in December 2015.

There are more than 23 possible corrective structures that B waves may take. It is important to always have multiple wave counts when B waves are expected. It is for this reason that a weekly alternate wave count will be published daily.

It looks unlikely that cycle wave b may have been over at the high labelled primary wave A. Primary wave A lasted less than one year at only 31 weeks. Cycle waves should last one to several years and B waves tend to be more time consuming than other Elliott waves, so this movement would be too brief for cycle wave b.

This wave count looks at cycle wave b to be most likely a regular contracting triangle.

All sub-waves must subdivide as threes within an Elliott wave triangle, and four of the five sub-waves must be zigzags or multiple zigzags, and the most common sub-wave to be a multiple is wave C. Only one sub-wave may be a more complicated multiple. This triangle meets all these rules and guidelines; all subdivisions fit perfectly at all time frames. It is the main wave count for these reasons, and thus is judged to have the highest probability.

The triangle trend lines have a normal looking convergence. Primary wave D now looks fairly likely to be complete, and it looks like an obvious three wave structure at the weekly chart level.

While primary wave E should also most likely look like an obvious three wave structure at the weekly and daily chart levels, it does not have to do this. It is possible at the end of this week that primary wave E could be over, falling reasonably short of the A-C trend line and being relatively quick. E waves of triangles can often be the quickest of all triangle waves.

DAILY CHART

Gold Elliott Wave Chart Daily 2018
Click chart to enlarge.

This first wave count follows on directly from the weekly chart above. It looks at primary wave E as a single zigzag. Zigzags subdivide 5-3-5.

It is possible today that the zigzag for primary wave E may be complete. It looks like a zigzag at the daily chart level. E waves of triangles can be surprisingly quick. A very good example of this is here on this daily chart: the triangle labelled intermediate wave (B) within primary wave D also came to a quicker than expected end.

The target calculated for cycle wave c assumes the most common Fibonacci ratio to cycle wave a.

If primary wave E continues higher, it may not move beyond the end of primary wave C above 1,357.09. A new high by any amount at any time frame would immediately invalidate this wave count.

2 HOURLY CHART

Gold Elliott Wave Chart Hourly 2018
Click chart to enlarge.

This 2 hourly chart shows all of primary wave E. The bottom line for this wave count is that while price remains within this channel there is no evidence of a trend change. This channel must be breached by downwards movement before any confidence may be had in a trend change.

HOURLY CHART

Gold Elliott Wave Chart Hourly 2018
Click chart to enlarge.

Intermediate wave (B) may have been remarkably brief, much more so than expected. Intermediate wave (C) will now fit as a completed five wave impulse.

A new low below 1,324.93 would add a little confidence in this wave count. A clear breach of the black Elliott channel by downwards movement is required for reasonable confidence.

While price remains within the channel, accept the possibility that it may continue higher.

ALTERNATE HOURLY CHART

Gold Elliott Wave Chart Hourly 2018
Click chart to enlarge.

By simply moving the degree of labelling within the last wave up all down one degree, it is entirely possible that primary wave E is not yet over.

Within minor wave 5, the correction for minute wave ii may not move beyond the start of minute wave i below 1,324.93.

The upper edge of the Elliott channel may provide resistance. If price comes up to touch that trend line and this wave count remains valid, then look out for a downwards reaction there.

ALTERNATE ELLIOTT WAVE COUNT

WEEKLY CHART

Gold Elliott Wave Chart Weekly 2018
Click chart to enlarge.

This is the best bullish wave count that I can see at this stage. The extra video for members this week shows how it was developed.

If cycle wave b is a single zigzag, then the upwards wave labelled here primary wave A must be seen as a five wave structure. But this is problematic because (within primary wave A) intermediate wave (4) lasted 12 weeks whereas intermediate wave (2) only lasted 2 weeks. While disproportion between corrective waves does not violate any Elliott wave rules, it does give a wave count the wrong look.

Gold is typical of commodities in that it often exhibits swift strong fifth waves, leading to blowoff tops in bull markets and selling climaxes in bear markets. This tendency is most often seen in Gold’s third waves. When this happens the strong fifth wave forces the fourth wave correction that comes before it to be more brief and shallow than good proportion to its counterpart second wave would suggest. When this happens the impulse has a curved three wave look to it at higher time frames.

It is acceptable for a wave count for a commodity to see a curved impulse which has a more time consuming second wave correction within it than the fourth wave correction.

The impulse has a more time consuming fourth wave than the second in this case though, giving the wave the look of a zigzag. This is unusual, and so the probability of this wave count is low.

Low probability does not mean no probability, so this wave count is possible; when low probability outcomes do occur, they are never what was expected as most likely.

Primary wave C must subdivide as a five wave structure, either an impulse or an ending diagonal. Because the upwards wave of intermediate wave (1) fits as a zigzag and will not fit as an impulse, an ending diagonal is considered.

Ending diagonals require all sub-waves to subdivide as zigzags.

Within intermediate wave (1), to see this wave as a zigzag, minor wave B is seen as a double flat correction. In my experience double flats are extremely rare structures, even rarer than running flats. The rarity of this structure further reduces the probability of this wave count.

Intermediate wave (3) must move beyond the end of intermediate wave (1) above 1,357.09.

SECOND ALTERNATE ELLIOTT WAVE COUNT

WEEKLY CHART

Gold Elliott Wave Chart Weekly 2018
Click chart to enlarge.

This second alternate is new, developed from a suggestion by an Elliott Wave Gold member, Dreamer.

A triangle may be completing as an X wave within a double zigzag for cycle wave b.

Now the upwards wave labelled here primary wave W is seen as a zigzag. This has a better fit than the first alternate.

Within the triangle for primary wave X, intermediate waves (A) through to (C) may be complete. Intermediate wave (D) may also be complete, but there is room for it to still move higher. If the triangle for primary wave X is a regular contracting triangle, then intermediate wave (D) may not move beyond the end of intermediate wave (B) above 1,357.09. If the triangle is a barrier triangle, then intermediate wave (D) should end about the same level as intermediate wave (B), so that the (B)-(D) trend line remains essentially flat. In practice, this means that intermediate wave (D) may end slightly above 1,357.09 and this wave count would remain valid.

This is why a new high reasonably above 1,357.09 only would invalidate this wave count. This invalidation point is not black and white.

TECHNICAL ANALYSIS

WEEKLY CHART

Gold Weekly 2018
Click chart to enlarge. Chart courtesy of StockCharts.com.

Now that price has again broken above resistance at 1,305 to 1,310, that area may now provide support. Next resistance is about 1,345.

Stochastics is added this week. Price is range bound in a weekly level consolidation. As price swings from resistance to support and back again, Stochastics may be used to assist to see where each swing may end and the next begin. Price is nearing resistance at 1,345 and Stochastics is just entering overbought. It looks reasonable to expect the upwards swing to end soon; there is a little room for price to rise still.

DAILY CHART

Gold Daily 2018
Click chart to enlarge. Chart courtesy of StockCharts.com.

Resistance about 1,330 did not hold during Friday’s session. Next resistance is on the weekly chart about 1,345.

Divergence with RSI has simply disappeared. RSI is overbought, but it can remain so for a reasonable length of time when Gold has a strong bull trend.

Stochastics is overbought and exhibits clear divergence with price, but this can develop further into multiple divergence before the bull trend ends.

ADX indicates the trend is extreme, but this can persist for reasonable periods of time when Gold has a strong bull trend.

There is room still for price to rise further.

GDX DAILY CHART

Gold Daily 2018
Click chart to enlarge. Chart courtesy of StockCharts.com.

Price has broken above resistance with support from volume. Next resistance is about 23.70.

However, for GDX there is weakness exhibited by divergence in both RSI and Stochastics. This may yet disappear, but for now it exists.

The bullish signal given by On Balance Volume is weak because the trend line breached on Friday is short held, reasonably sloped and tested only twice before.

Published @ 05:57 p.m. EST on 13th January, 2018.

[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 – 12th January, 2018

GOLD Elliott Wave Technical Analysis – 1st November, 2017

Price is now beginning to move higher, which is what the Elliott wave counts both expected.

Summary: Upwards movement for a third wave should begin now. The first target is at 1,294 where a small consolidation may unfold. The target for this upwards swing to end is at 1,308, in the first instance, and may be as high as 1,380 (but this looks less likely now).

Reduce risk at this time to only 1-3% of equity on any one trade. Always trade with stops.

New updates to this analysis are in bold.

Last monthly charts for the main wave count are here, another monthly alternate is here, and video is here.

Grand SuperCycle analysis is here.

The wave counts will be labelled first and second. Classic technical analysis will be used to determine which wave count looks to be more likely. In terms of Elliott wave structure the second wave count has a better fit and fewer problems.

FIRST ELLIOTT WAVE COUNT

WEEKLY CHART

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

There are more than 23 possible corrective structures that B waves may take, and although cycle wave b still fits well at this stage as a triangle, it may still be another structure. This wave count looks at the possibility that it may be a double zigzag.

If cycle wave b is a double zigzag, then current upwards movement may be part of the second zigzag in the double, labelled primary wave Y.

The target remains the same.

Within intermediate wave (C), no second wave correction may move beyond the start of its first wave below 1,205.41. However, prior to invalidation, this wave count may be discarded if price breaks below the lower edge of the black Elliott channel. If this wave count is correct, then intermediate wave (C) should not break below the Elliott channel which contains the zigzag of primary wave Y upwards.

There are now three 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.

3. Although intermediate wave (C) should be continuing so that primary wave Y ends substantially above the end of primary wave W, the duration and depth of minor wave 2 within it now looks to be too large at the weekly time frame.

DAILY CHART

Gold Elliott Wave Chart Daily 2017
Click chart to enlarge.

The analysis will focus on the structure of intermediate wave (C). To see details of all the bull movement for this year see daily charts here.

Intermediate wave (C) must be a five wave structure, either an impulse or an ending diagonal. It is unfolding as the more common impulse.

It is possible that minor waves 1 and now 2 may both be over. Minor wave 2 may have ended very close to the 0.618 Fibonacci ratio. If it continues lower, then minor wave 2 may not move beyond the start of minor wave 1 below 1,205.41.

Minor wave 1 lasted 44 days and minor wave 2 may have lasted 20 days, just one short of a Fibonacci 21.

It is of some concern now that minor wave 3 appears to be starting out rather slowly and that minute wave ii within it is now a very deep correction.This is somewhat unusual for a third wave and offers some support now to the second Elliott wave count. With StockCharts data showing a steady decline in volume as price rises, this concern is validated.

A base channel is added to minor waves 1 and 2. If this wave count is correct, then lower degree second wave corrections should find support at the lower edge of the base channel. Friday’s candlestick is below the base channel, which now reduces the probability of this wave count.

Minute wave ii may now be over as a double zigzag structure.

It is again of concern that upwards movement this week does not have support from volume. The start of a third wave up at two degrees should be a strong movement.

HOURLY CHART

Gold Elliott Wave Chart Hourly 2017
Click chart to enlarge.

If minute wave ii is over as a very deep double zigzag, then it may have lasted a Fibonacci eight days.

Because minute wave ii here is so deep, the appropriate Fibonacci ratio to use to calculate a target for minute wave iii is 2.618.

Minute wave iii may only subdivide as a five wave impulse upwards. Minuette waves (i) and (ii) may now be complete.

Minuette wave (iii) may only subdivide as a five wave impulse. Within minuette wave (iii), subminuette wave i may be complete and subminuette wave ii may be incomplete. Subminuette wave ii may not move beyond the start of subminuette wave i below 1,267.97.

A base channel is added now to minuette waves (i) and (ii). Along the way up, lower degree corrections should find very strong support at the lower edge of the base channel. Gold almost always behaves like this; breaches of its base channels do happen, but they are uncommon.

The next wave up for this wave count would now be expected to be a third wave at four degrees.

SECOND ELLIOTT WAVE COUNT

WEEKLY CHART

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

It is still possible that cycle wave b is unfolding as a regular contracting or barrier triangle.

Within a triangle, one sub-wave should be a more complicated multiple, which may be primary wave C. This is the most common sub-wave of the triangle to subdivide into a multiple.

Intermediate wave (Y) now looks like a complete zigzag at the weekly chart level.

Primary wave D of a contracting triangle may not move beyond the end of primary wave B below 1,123.08. Contracting triangles are the most common variety.

Primary wave D of a barrier triangle should end about the same level as primary wave B at 1,123.08, so that the B-D trend line remains essentially flat. This involves some subjectivity; price may move slightly below 1,123.08 and the triangle wave count may remain valid. This is the only Elliott wave rule which is not black and white.

Finally, primary wave E of a contracting or barrier triangle may not move beyond the end of primary wave C above 1,295.65. Primary wave E would most likely fall short of the A-C trend line. But if it does not end there, then it can slightly overshoot that trend line.

Primary wave A lasted 31 weeks, primary wave B lasted 23 weeks, and primary wave C lasted 38 weeks.

The A-C trend line now has too weak a slope. At this stage, this is now a problem for this wave count, the upper A-C trend line no longer has such a typical look.

Within primary wave D, no part of the zigzag may move beyond its start above 1,357.09.

DAILY CHART

Gold Elliott Wave Chart Daily 2017
Click chart to enlarge.

This second wave count expects the new wave down may be deeper and longer lasting than the first wave count allows for. At this stage, in the middle of this downwards wave intermediate wave (B) looks incomplete.

A common length for triangle sub-waves is from 0.8 to 0.85 the length of the prior wave. Primary wave D would reach this range from 1,170 to 1,158.

If primary wave C is correctly labelled as a double zigzag, then primary wave D must be a single zigzag.

Within the single zigzag of primary wave D, intermediate wave (A) is labelled as a complete impulse.

Intermediate wave (A) lasted twenty days, just one short of a Fibonacci twenty-one. Intermediate wave (B) may be about the same duration, so that this wave count has good proportions, or it may be longer because B waves tend to be more complicated and time consuming.

So far intermediate wave (B) has lasted eighteen sessions. The next Fibonacci number in the sequence is twenty-one which would see it continue now for another three sessions.

At its conclusion intermediate wave (B) should have an obvious three wave look to it here on the daily chart.

Minor wave B may be complete here or close to completion as a double zigzag.

Minor wave A will subdivide as either a five wave impulse or a three wave zigzag. If it is seen as a zigzag, then the whole structure for intermediate wave (B) may be a flat correction, which would allow for minor wave B to move below the start of minor wave A at 1,260.72.

HOURLY CHART

Gold Elliott Wave Chart Hourly 2017
Click chart to enlarge.

Intermediate wave (B) may be a regular flat correction. Within intermediate wave (B), minor wave B has passed the minimum requirement of 0.90 the length of minor wave A. B waves within 0.90 to 1.05 the length of A waves indicate a regular flat correction. The most common length for C waves within regular flats is equality in length with the A wave.

Minor wave C would be extremely likely to make at least a slight new high above the end of minor wave A at 1,305.72 to avoid a truncation.

Both wave counts require a five wave structure upwards to complete. For this second wave count it would be labelled minor wave C.

So far, within minor wave C, minute waves i and now ii may be complete. This second wave count also expects a third wave up to now begin, but only at two degrees. Some increase in upwards momentum should be expected, and it should have support from volume.

The current small pullback, which is here labelled minuette wave (ii), looks incomplete. This hourly chart shows a slightly different way of labelling most recent movement. A small triangle may be completing for subminuette wave b within a zigzag downwards for minuette wave (ii).

When this second wave correction is complete, then an increase in upwards momentum would be expected.

Minuette wave (ii) may not move beyond the start of minuette wave (i) below 1,267.97.

TECHNICAL ANALYSIS

WEEKLY CHART

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

What looks like a possible double bottom here with the last swing low three weeks ago is too small to be classified as a correct double bottom. The two troughs of a double bottom should be about 10% from the peak in between. Here, they are only 3.6% from the peak.

The long lower wick on the last completed weekly candlestick is bullish, but volume tells a different story as it is bearish.

On Balance Volume may again lead the way. Support may force a bounce here.

DAILY CHART

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

Price is very clearly consolidating. Expect swings from support to resistance and back again. Use Stochastics in conjunction with support and resistance to signal when each swing ends. Be aware that trading a consolidating market is much more risky than trading a trending market, and reduce risk accordingly. Only experienced traders should consider trading the swings within a consolidation. Reduce risk to 1-3% of equity. Always trade with stops. Here, move stops to a little below support and above resistance to allow for overshoots; give the market room to move.

With Stochastics very close to oversold and price at support, an upwards swing may begin here or very soon. Look for resistance about 1,305 – 1,310. This also supports the second Elliott wave count.

Volume and On Balance Volume are today more clearly bullish giving some confidence that an upwards swing may be beginning now.

GDX DAILY CHART

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

GDX broke below support four days ago, on a downwards day with support from volume. This looks still like a classic downwards breakout. It is common after breakouts for price to curve back and test support or resistance, and that looks like what is happening today.

The longer upper wick on today’s candlestick looks a little bearish. It looks like GDX may now begin to move down and away.

However, volume for this downwards movement is very light, so it is suspicious.

If price moves back above resistance at 22.75, then the consolidation zone may have to be widened. If this happens, then expect an upwards swing to next resistance about 23.95.

But the bottom line for GDX today is it is in a downwards trend. Assume GDX remains so while price remains below resistance at 22.75. With weakness still, traders should take profits or keep trailing stops tight.

Published @ 06:00 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 – 1st November, 2017

GOLD Elliott Wave Technical Analysis – 24th April, 2017

A correction was expected to continue for another one to few days. Today’s red candlestick with a long lower wick mostly fits that expectation.

Price remains above the invalidation point but the wave count no longer has the right look, so today it is changed.

Continue reading GOLD Elliott Wave Technical Analysis – 24th April, 2017

GOLD Elliott Wave Technical Analysis – 30th March, 2017

Downwards movement continued for Thursday as expected. Price is now below the lower edge of the base channel on the hourly chart.

Continue reading GOLD Elliott Wave Technical Analysis – 30th March, 2017

GOLD Elliott Wave Technical Analysis – 17th March, 2017

Sideways movement was expected for Friday. An inside day perfectly fits expectations.

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

GOLD Elliott Wave Technical Analysis – 25th January, 2017

A breach of the trend channel and a new low below 1,195.82 invalidated the main Elliott wave count and confirmed the alternate.

Continue reading GOLD Elliott Wave Technical Analysis – 25th January, 2017