# Market Correlations – Statements and Assumptions | 20th June, 2017

Occasionally, members and visitors to this website make a statement along the lines of “market X is doing this, so how come you think Gold is going to go up / down?”.

Such statements are based upon unacknowledged assumptions that the markets have a correlation. The problem with assumptions is they can be wrong. So is there a simple mathematical technique to determine if two sets of data are correlated, either positively or negatively?

Click chart to enlarge.

Yes, there is: by looking at the correlation co-efficient range between two sets of data.

Correlation co-efficient ranges from -1 to +1. A perfect positive correlation will have a correlation co-efficient of +1. A perfect negative correlation will have a correlation co-efficient of -1.

Two sets of data which have a positive correlation will have a correlation co-efficient between +0.5 to +1. Two sets of data which have a negative correlation will have a correlation co-efficient between -0.5 to -1.

Any two sets of data which have a correlation co-efficient between +0.5 and -0.5 are not correlated.

Any two sets of data which have a correlation co-efficient that spends any time between +0.5 and -0.5 does not have a correlation which is reliable. This area of unreliability is shaded in the chart above for several markets which are often assumed to have a correlation to Gold price.

GDX, US Bonds, US Crude Oil, the US dollar index and even Silver do not have a reliable correlation with Gold price. All of these markets have correlation co-efficients which spend time in the shaded areas.

Even if these markets do sometimes exhibit a correlation with Gold, the point is that because this is not always true that when it is so it cannot be assumed to continue. The math shows that it does not.

To base an analysis of Gold on an assumption that another market is moving in a particular direction, and therefore Gold must move in a particular direction, is to base the analysis on assumptions and not data. Such assumptions are unreliable, and why you will not find then in my analyses.

To base an analysis of Gold on actual data and math is more likely to lead to accurate predictions and profitable trading. This does not mean the analysis will always be right, but it does mean the analysis will be based on facts and not assumptions.

This analysis is published @ 04:13 a.m. EST.

# What Is Gold’s Next Move After US FED Interest Rate Decision on 14th June, 2017?

Technical analysis chart of Gold with Volume and On Balance Volume indicators, and support and resistance lines, may give guidance as to the direction Gold may take after FED Interest rate decision.

Click chart to enlarge. Chart courtesy of StockCharts.com.

The recent fall in price over the last three days does not have support from volume and this suggests a bounce should be expected here or very soon. Additionally, there is strong, bullish support for Gold’s price at about 1,260. These support the idea of upwards movement after the FED Interest rate decision.

However, the latest and now most important signal comes from On Balance Volume breaking below support. This is bearish.

Given that a technical analysis approach would expect Gold to move mostly in the direction of least resistance and away from greatest support, the expectation is for Gold to breakout upwards. But because of On Balance Volume’s bearish signal, any upside movement is expected to be relatively short lived.

Also, On Balance Volume supports my current Elliott wave count.

This analysis is published @ 03:30 a.m. EST.

# Trading Room – 16th May, 2017

A big thank you to everyone for your comments and feedback and support. However, due to various circumstances this will be the last Trading Room post.

I will continue to watch several markets and will continue to post extra analysis, charts and trading recommendations for members in the comments section of the Gold analysis, where you will also find my Gold updates and a wealth of information and trading tips from other members.

CLOSED POSITIONS

Click table to enlarge.

This analysis is published @ 04:20 a.m. EST.

[Note: Member comments and discussion will remain private.]

# Trading Room – 9th May, 2017

Today’s Trading Room looks at US Oil, Copper, CVX and \$USB.

Trading Room will focus on classic technical analysis. Elliott wave analysis will be for support and for targets / invalidation points.

US Oil (WTI Crude – Spot)

TECHNICAL ANALYSIS

Click chart to enlarge. Chart courtesy of StockCharts.com.

Elliott Wave Gold members were advised to enter short for US Oil on the 12th of April, at 53.11. Positions are now very profitable and stops have been moved down to protect profits.

Analysis is now focused on managing short positions and determining when to take profit.

Price has bounced up from support about 43.6. The candlestick at the low is a hammer and this shifts the trend from down to neutral. A reversal pattern reverses from down (or up) to either the opposite direction or neutral but makes no comment on how long the next trend may last.

The hammer is followed by a long legged doji. This indicates a balance between bulls and bears; neither are in charge. This looks like a pause within a larger trend and not necessarily a reversal.

The downwards trend has support from volume. ADX indicates a downwards trend that is not yet extreme. The trend has a healthy increase in range and widening of Bollinger Bands.

When Oil trends, it can do so very strongly. Indicators may remain extreme for long periods of time. Only when RSI has reached oversold for some time and ADX is extreme may this trend end.

In the short term, On Balance Volume is a little bullish. The break above the short purple line is a weak signal because the line is not long held and only tested three times. On Balance Volume may find resistance at the longer purple line and that may help to halt the rise in price here.

To see how extreme RSI and ADX can get when Oil trends look at the strong downwards wave from 13th June, 2014, to the 29th January, 2015.

Click chart to enlarge.

This chart looks at several examples during a strong trend in Oil to illustrate the concept of hammer candlestick reversal patterns not necessarily signalling the end of a trend. The biggest retracement was after the first pattern: the following two days retraced 54% of the prior fall. Thereafter, hammers were followed by zero to four days of upwards movement.

The lesson here is do not read too much into this one piece of technical analysis. On its own a hammer will more often be a sign of a pause and not a sign of a major low.

ELLIOTT WAVE ANALYSIS

Click chart to enlarge.

This third wave for minuette wave (iii) must move below the end of minuette wave (i) at 47.06, to meet the core Elliott wave rule, and it must move far enough below this point to allow room for a subsequent fourth wave to unfold and remain below first wave price territory.

Minor wave C must subdivide as a five wave impulse. It has begun with two deep and very time consuming second wave corrections for minute wave ii and minuette wave (ii). The upcoming fourth wave corrections for minuette wave (iv) and minute wave iv may be expected to be relatively shallow to meet the guideline of alternation.

A narrow best fit channel is added to recent downwards movement. Price may be beginning to break below the lower edge as momentum increases. Micro wave 4 may not move into micro wave 1 price territory above 48.22. Targets remain the same.

Copper (Spot)

TECHNICAL ANALYSIS

Click chart to enlarge. Chart courtesy of StockCharts.com.

Analysis of Copper is proving very difficult.

Corrections are deep. Overall, since the high on the 13th of February Copper has made a series of lower lows and lower highs.

Volume is stronger for downwards days, supporting the downwards movement in price.

ADX indicates Copper may be in the early stages of a downwards trend. The trend has not yet begun to show an increase in volatility but has begun possibly to show some small increase in range.

Price is whipsawing from support to resistance and back again in conjunction with Stochastics moving from oversold to overbought. Currently, with Stochastics in oversold territory, it seems reasonable for price to be expected to move higher here to find resistance now about 2.55. If price closes above 2.55, then next resistance would be about 2.700.

TREND LINE

Click chart to enlarge.

Copper has found very strong resistance at the green trend line, which goes back to at least August 2011. The last two complete monthly candlesticks both have long lower wicks, which is bullish.

ELLIOTT WAVE ANALYSIS

Click chart to enlarge.

Leading diagonals in first wave positions are normally followed by very deep corrections, often reasonably deeper than the 0.618 Fibonacci ratio. Given this tendency and the brevity of the correction labelled minute wave a within minor wave 2, it looks most likely that minor wave 2 shall continue for longer and be deeper.

Minor wave 2 may not move beyond the start of minor wave 1 above 2.823.

CVX – Chevron Corp

TECHNICAL ANALYSIS – WEEKLY

Click chart to enlarge. Chart courtesy of StockCharts.com.

The larger trend may still be up and should be assumed to remain so while price is above 95.64.

However, the current smaller movement looks to be down and has more support from volume.

A break below the long term purple line by On Balance Volume would be a bearish signal.

TECHNICAL ANALYSIS – DAILY

Click chart to enlarge. Chart courtesy of StockCharts.com.

CVX has been in a downwards trend since December 2016. This may be a large pullback within a bull market as seen on the weekly chart. Short and mid term averages have a negative slope. The long term 200 day average still has a slight positive slope.

Within the downwards trend are periods of consolidation. Currently, a small consolidation is unfolding and the strongest day is a downwards day, so expect a downwards breakout as more likely than upwards here.

Overall, this chart is neutral to slightly bearish.

This analysis of Chevron is included in Trading Room today as a result of a member’s request and not necessarily because it offers a good trading opportunity. It may offer an opportunity to short but only for more experienced and nimble members; this trend is not strong.

\$USB – 30 YEAR US TREASURY BONDS

TECHNICAL ANALYSIS – MONTHLY

Click chart to enlarge. Chart courtesy of StockCharts.com.

This chart looks at 20 years of data.

Bond price has remained bullish for this time. Pullbacks find final support at the 10 year moving average (dark blue). Some pullbacks fall short, finding support about the 5 year moving average (purple).

For this market to be confirmed as having switched from bull to bear, the major swing low in December 2013 should be exceeded by a new low below 127.30. Assume the bull market remains intact while price remains above 127.30.

Often at lows Stochastics exhibits divergence with price.

There is room here for price to fall further. However, with Stochastics turning up here it is also possible that the fall in price is over. The weekly chart may shed more light.

TECHNICAL ANALYSIS – WEEKLY

Click chart to enlarge. Chart courtesy of StockCharts.com.

Since early July 2016, Bonds have been in a pullback within the context of a larger bull market.

Strong bullish divergence between the last two swing lows for price and RSI and Stochastics indicates downwards movement has weakened. A low may be in place.

ADX does not indicate a change from down to up nor does it indicate a trend at this time.

This analysis suffers from a lack of volume data.

At this time, it looks reasonable to assume this may be a good buying opportunity for longer term investors. Always have an exit strategy for long term investments that includes at what point the investment would be exited if price falls. Do not invest funds which you cannot afford to lose.

OPEN POSITIONS

Click table to enlarge.

CLOSED POSITIONS

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This table ends April.

RECOMMENDATIONS

[Content protected for Elliott Wave Gold members only. To subscribe click here.]

DISCLAIMER

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.

Accept that this analysis may be wrong. It is impossible for any analyst to predict with certainty what a market will do next.

Trading advice will be updated throughout the week for Elliott Wave Gold members only in this comments section.

This analysis is published @ 02:18 a.m. EST.

[Note: Member comments and discussion will remain private.]

# Trading Room – 23rd April, 2017

Today’s Trading Room looks at Copper and US Oil.

Only a recommendation on Gold is given for Elliott Wave Gold members.

Trading Room will focus on classic technical analysis. Elliott wave analysis will be for support and for targets / invalidation points.

Copper (Spot)

TECHNICAL ANALYSIS

Click chart to enlarge. Chart courtesy of StockCharts.com.

On the 12th of April Copper had a classic downwards breakout from a consolidation zone, which was supported by volume.

A resistance line is added this week in green. Price might find some resistance at this line, but at this stage the line does not offer good technical significance because it is steep and not long held.

Looking back over the last 2 years, horizontal support and resistance lines are added. Price may find some resistance here about 2.55.

The long lower wick on the candlestick for the 20th of April is bullish. Now the relatively long upper wick on the 21st of April is a little bearish. This upwards movement looks like another small bounce and this view is supported by declining volume.

On Balance Volume is again bearish, turning down from the purple line.

There is a downwards trend which is not extreme.

TREND LINE

Click chart to enlarge.

Copper has found very strong resistance at the green trend line, which goes back to at least August 2011. The doji candlestick for February puts the trend from up to neutral.

ELLIOTT WAVE ANALYSIS

Click chart to enlarge.

The blue channel continues to show about where price may find resistance and support. If this Elliott wave count is correct, then Copper should break through support at the lower edge of the channel and then increase in downwards momentum.

US Oil (WTI Crude – Spot)

TECHNICAL ANALYSIS

Click chart to enlarge. Chart courtesy of StockCharts.com.

Elliott Wave Gold members were advised to enter short for US Oil on the 12th of April, at 53.11. Positions are now comfortably profitable and stops have been moved down to protect profits.

Analysis is now focused on managing short positions and determining when to take profit.

Downwards movement has some support from volume. ADX is bearish. ATR increasing supports the trend. On Balance Volume is very bearish.

With RSI and Stochastics not yet oversold, there is room for price to fall further.

US Oil can close outside the extreme range of Bollinger Bands for several days in row when it has a strong trend. With a close two days in a row below the lower edge of Bollinger Bands, this is not a concern.

ELLIOTT WAVE ANALYSIS

Click chart to enlarge.

This third wave for minuette wave (iii) must move below the end of minuette wave (i) at 47.06, to meet the core Elliott wave rule, and it must move far enough below this point to allow room for a subsequent fourth wave to unfold and remain below first wave price territory.

Minor wave C must subdivide as a five wave impulse. It has begun with two deep and very time consuming second wave corrections for minute wave ii and minuette wave (ii). The upcoming fourth wave corrections for minuette wave (iv) and minute wave iv may be expected to be relatively shallow to meet the guideline of alternation.

A narrow best fit channel is added to recent downwards movement. An upcoming correction for subminuette wave ii may breach the channel. At this stage, with the power of a third wave pulling to the downside, subminuette wave ii may be expected to be relatively brief and shallow.

OPEN POSITIONS

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Trading advice for gold given to Elliott Wave Gold members will be included in Trading Room summary tables. However, so that it remains private for Elliott Wave Gold members only, it will not be included in Trading Room posts.

CLOSED POSITIONS

Click table to enlarge.

Each month a new “closed positions” table will begin. To see all closed positions for March 2017 see the last Trading Room post for March here.

RECOMMENDATIONS

[Content protected for Elliott Wave Gold members only. To subscribe click here.]

DISCLAIMER

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.

Accept that this analysis may be wrong. It is impossible for any analyst to predict with certainty what a market will do next.

The technical problem with comments encountered last week has now been fixed. Members should log into the website then click on the title of this post to see comments.

Trading advice will be updated throughout the week for Elliott Wave Gold members only in this comments section.

This analysis is published @ 10:00 p.m. EST.

[Note: Member comments and discussion will remain private.]

# Trading Room – 17th April, 2017

Today’s Trading Room looks at Copper, US Oil and GBPUSD.

Trading Room will focus on classic technical analysis. Elliott wave analysis will be for support and for targets / invalidation points.

Copper (Spot)

TECHNICAL ANALYSIS

Click chart to enlarge. Chart courtesy of StockCharts.com.

Members were advised to enter short on the 10th of April. Stops were initially set just above 2.700 and are now moved down to breakeven to eliminate risk.

On the 12th of April Copper had a classic downwards breakout from a consolidation zone, supported by volume. Now price is turning up to test resistance at prior support, about 2.590. The downwards session for the 12th of April has strong volume. The last upwards session for the 13th of April has lighter volume. Volume is bearish.

The long upper wick on the candlestick for the 13th of April is bearish.

On Balance Volume is bearish. RSI is not extreme, so there is plenty of room for price to fall. ADX is still below 15 and does not yet indicate a new trend. Bollinger Band expansion indicates volatility returning after the consolidation; with price moving lower as Bollinger Bands expand, this is bearish.

ATR may be expected to begin to increase after a period of a small range.

Stochastics is not yet oversold. This may remain extreme for long periods of time during a trending market. Only when it has been extreme for some time and then exhibits divergence with price while extreme should it be read as a strong warning sign of an impending trend change. That is not the case yet.

TREND LINE

Click chart to enlarge.

Copper has found very strong resistance at the green trend line, which goes back to at least August 2011. The doji candlestick for February puts the trend from up to neutral.

ELLIOTT WAVE ANALYSIS

Click chart to enlarge.

The upper edge of the blue channel has still provided resistance, with a strong overshoot for the 30th of March. Copper may in the early stages of a third wave at three degrees now and this should see an increase in downwards momentum.

US Oil (WTI Crude – Spot)

TECHNICAL ANALYSIS

Click chart to enlarge. Chart courtesy of StockCharts.com.

The red daily candlestick of the 12th of April completes a Bearish Engulfing Candlestick pattern. This is the most reliable of candlestick reversal patterns when it comes after an upwards trend. It doesn’t always work (it didn’t work on the 3rd of April), but it works more often than not. It is supported by volume. The last upwards day for the 13th of April did not have support from volume. This is also bearish.

Overall, this chart is more bullish than bearish.

Members were advised that I entered short Oil on the 12th of April. At this stage, this position is now positive.

ELLIOTT WAVE ANALYSIS

Click chart to enlarge.

The basis for entering short was price breaking below the lower edge of the small gold channel that contains the upwards wave labelled minuette wave (ii).

Now price may be beginning to move down and away.

GBPUSD

TECHNICAL ANALYSIS

Click chart to enlarge. Chart courtesy of StockCharts.com.

The prior pennant pattern is no longer correct.

The last daily candlestick for the 13th of April is bearish and has support from volume.

ATR and Bollinger Bands show there is something wrong with this upwards trend due to a lack of range and volatility. This trend is relatively weak at this stage.

VOLUME ANALYSIS

Click chart to enlarge.

The bearish signal given in last analysis for On Balance Volume was negated. The support line is redrawn. On Balance Volume is constrained, giving no signal today.

ELLIOTT WAVE ANALYSIS

Click chart to enlarge.

Cycle wave c needs to complete as a five wave structure. The final fifth wave is incomplete and may only have just begun. The target expects to see the most likely Fibonacci ratio between primary waves 5 and 1.

Click chart to enlarge.

Primary wave 4 fits perfectly as a regular contracting triangle, offering perfect alternation with the zigzag of primary wave 2. Primary wave 2 lasted 2 months and primary wave 4 lasted 6 months. Triangles are usually longer lasting structures than zigzags, so this disproportion is not only acceptable but should be expected. This wave count has the right look.

The breakout from the triangle should be down.

Minor wave 2 moved higher and fits perfectly as an expanded flat correction. These are very common structures. The choice to try another short position here is based heavily on the three wave structure of minute wave b; with a three down following minor wave 1, only an expanded flat following an impulse will fit. The trend should therefore be down if this Elliott wave analysis is correct.

Minor wave 2 may not move beyond the start of minor wave 1 above 1.26157.

OPEN POSITIONS

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Trading advice for gold given to Elliott Wave Gold members will be included in Trading Room summary tables. However, so that it remains private for Elliott Wave Gold members only, it will not be included in Trading Room posts.

CLOSED POSITIONS

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Each month a new “closed positions” table will begin. To see all closed positions for March 2017 see the last Trading Room post for March here.

RECOMMENDATIONS

[Content protected for Elliott Wave Gold members only. To subscribe click here.]

DISCLAIMER

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.

Accept that this analysis may be wrong. It is impossible for any analyst to predict with certainty what a market will do next.

This analysis is published @ 03:39 a.m. EST.

[Note: Member comments and discussion will remain private.]

# Trading Room – 9th April, 2017

Today’s Trading Room looks at Copper, Natural Gas and GBPUSD.

Trading Room will focus on classic technical analysis. Elliott wave analysis will be for support and for targets / invalidation points.

Copper (Spot)

TECHNICAL ANALYSIS

Click chart to enlarge. Chart courtesy of StockCharts.com.

Last Trading Room advice to Elliott Wave Gold members advised to enter short with a stop just above 2.717. Members were advised that short positions should become profitable within 24 hours, which is what happened, and that stops should have been then moved to breakeven. The whipsaw of the 5th of April should have closed short positions for no loss.

Copper is now range bound with resistance about 2.70 and support about 2.59 (with overshoots). Volatility declines as price moves sideways, ATR remains very low and flat, and ADX indicates a consolidating market.

In the short term, the very long lower wick for the candlestick of the 7th of April indicates upwards movement is likely to begin the new trading week.

TREND LINE

Click chart to enlarge.

Copper has found very strong resistance at the green trend line, which goes back to at least August 2011. The doji candlestick for February puts the trend from up to neutral.

ELLIOTT WAVE ANALYSIS

Click chart to enlarge.

The upper edge of the blue channel has provided resistance, with a strong overshoot for the 30th of March. Copper may be ready to move lower in a third wave at three degrees now and this should see an increase in downwards momentum.

Natural Gas

TECHNICAL ANALYSIS

Click chart to enlarge. Chart courtesy of StockCharts.com.

Last trading advice for Natural Gas to Elliott Wave Gold members on the 31st of March was:

A trade set up is not seen at this time. Look for price to pullback to touch the green Magee trend line on the TA chart. If that happens, then enter long with a stop just below the line. Allow for overshoots, but exit long positions if the line is breached.

The Magee trend line was touched again on the 4th of April. This was the signal to enter long according to trading advice given. That best case entry point would have been at the low of the day at 3.122, but in reality members may not have entered exactly at the price point where price touched the line. However, any long positions should now be profitable and stops may be moved up to protect a little profit.

The Magee trend line may be used now as a trailing stop for long positions.

ADX indicates an upwards trend and RSI allows further room for price to rise. Stochastics is overbought and exhibits divergence with price, but this oscillator may remain extreme for long periods of time when this market trends. The bottom line is any pullbacks may be expected to find support at the green Magee trend line.

On Balance Volume is now bound within a small range. Watch this carefully; if it breaks below the yellow support line, it would indicate a deeper pullback may be underway; if it breaks above the purple resistance line, it would indicate an increase in upwards momentum.

ELLIOTT WAVE ANALYSIS

Click chart to enlarge.

The last Elliott wave count was invalidated with a new high this week above 3.174. Cycle wave b may be continuing higher as a double zigzag.

Click chart to enlarge.

MACD indicates an increase in momentum to support this third wave up.

When minor wave 3 is complete, then minor wave 4 may not move into minor wave 1 price territory below 3.088.

The gold channel’s lower edge is the same as the green Magee trend line on the daily technical analysis chart. Price should continue to find support at the lower edge while minor wave 3 continues.

GBPUSD

TECHNICAL ANALYSIS

Click chart to enlarge. Chart courtesy of StockCharts.com.

Price looked like it was forming a Pennant pattern. What StockCharts data does not show today is the daily candlestick for the 7th of April that broke out of the pattern to the downside. The candlestick is shown today on FXCM data below.

VOLUME ANALYSIS

Click chart to enlarge.

On Balance Volume gives a bearish signal with a break below the short term yellow support line. The downwards breakout from the pennant pattern has support from volume for a strong downwards day.

ELLIOTT WAVE ANALYSIS

Click chart to enlarge.

Cycle wave c needs to complete as a five wave structure. The final fifth wave is incomplete and may only have just begun. The target expects to see the most likely Fibonacci ratio between primary waves 5 and 1.

Click chart to enlarge.

Primary wave 4 fits perfectly as a regular contracting triangle, offering perfect alternation with the zigzag of primary wave 2. Primary wave 2 lasted 2 months and primary wave 4 lasted 6 months. Triangles are usually longer lasting structures than zigzags, so this disproportion is not only acceptable but should be expected. This wave count has the right look.

The breakout from the triangle should be down.

Within minor wave 3, no second wave correction may move beyond the start of its first wave above 1.25620.

OPEN POSITIONS

Click table to enlarge.

Trading advice for gold given to Elliott Wave Gold members will be included in Trading Room summary tables. However, so that it remains private for Elliott Wave Gold members only, it will not be included in Trading Room posts.

CLOSED POSITIONS

Click table to enlarge.

Each month a new “closed positions” table will begin. To see all closed positions for March 2017 see the last Trading Room post for March here.

RECOMMENDATIONS

[Content protected for Elliott Wave Gold members only. To subscribe click here.]

DISCLAIMER

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.

Accept that this analysis may be wrong. It is impossible for any analyst to predict with certainty what a market will do next.

This analysis is published @ 06:48 p.m. EST.

# Trading Room – 31st March, 2017

Today’s Trading Room looks at Copper and Natural Gas.

Trading Room will focus on classic technical analysis. Elliott wave analysis will be for support and for targets / invalidation points.

Copper (Spot)

TECHNICAL ANALYSIS

Click chart to enlarge. Chart courtesy of StockCharts.com.

The last trade for Copper was closed on the 27th of March.

Now Copper has moved higher.

The long lower wick of the 27th of March is bullish. Now the long upper wick of the 30th of March is bearish. A reasonable expectation would be for Copper to print at least one red daily candlestick next.

Strong volume for a session with the balance of volume downwards supports downwards movement.

On Balance Volume may find some support at the yellow trend line, but this line does not have much technical significance as it is steep and only tested twice before. The purple line does offer reasonable significance, so this may halt a fall in price.

Copper is range bound with resistance about 2.700 and support about 2.560. During this range bound period, it is two downwards days that have strongest volume suggesting a downwards breakout is more likely than upwards.

TREND LINE

Click chart to enlarge.

Copper has found very strong resistance at the green trend line, which goes back to at least August 2011. The doji candlestick for February puts the trend from up to neutral.

ELLIOTT WAVE ANALYSIS

Click chart to enlarge.

The upper edge of the blue channel has provided resistance, with a strong overshoot for the 30th of March. Copper may be ready to move lower in a third wave at two degrees and this should see an increase in downwards momentum.

Natural Gas

TECHNICAL ANALYSIS

Click chart to enlarge. Chart courtesy of StockCharts.com.

Natural Gas is now in an upwards trend. The breach of the blue bear Magee trend line indicated a trend change from bear to bull.

Now a new trend line is drawn for the new bull trend in green, so expect corrections to find support at this line. If it is breached, it would indicate a change.

There is strong volume for upwards movement in recent sessions. The new trend has support from volume.

On Balance Volume is constrained within sloping lines. A breakout would be a bullish or bearish signal.

Stochastics can remain extreme for reasonable periods of time. With price sitting close to upper edge of Bollinger Bands and Stochastics exhibiting divergence with price at highs while extreme, it looks like in the short term a small pullback may unfold.

ELLIOTT WAVE ANALYSIS

Click chart to enlarge.

The last Elliott wave count was invalidated with a new high this week above 3.174. Cycle wave b may be continuing higher as a double zigzag.

Click chart to enlarge.

The downwards wave labeled primary wave X is now a complete structure. It fits best and looks most like a three wave movement.

Intermediate wave (B) may not move beyond the start of intermediate wave (A) below 2.522.

OPEN POSITIONS

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Trading advice for gold given to Elliott Wave Gold members will be included in Trading Room summary tables. However, so that it remains private for Elliott Wave Gold members only, it will not be included in Trading Room posts.

CLOSED POSITIONS

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Trades advised to Elliott Wave Gold members for Gold have now been included in Trading Room summary tables.

*FTSE was a weak recommendation. Advice was given to only invest 1-2% of equity on this trade.

RECOMMENDATIONS

[Content protected for Elliott Wave Gold members only. To subscribe click here.]

DISCLAIMER

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.

Accept that this analysis may be wrong. It is impossible for any analyst to predict with certainty what a market will do next.

This analysis is published @ 02:53 a.m. EST.

# SILVER Elliott Wave Technical Analysis – 19th June, 2014

Movement above 19.824 and then 19.996 invalidated the main wave count and confirmed the alternate.

Silver has now finished its barrier triangle, and the next movement should be a five wave structure downwards. I will use the channels on the hourly chart to indicate when this trend change has occurred.

Click on charts to enlarge.

The triangle for intermediate wave (B) is now a complete barrier triangle. Within it the overshoot for minor wave E of the B-D trend line indicates that upwards movement is either over here or should be very soon.

At 10.85 intermediate wave (C) would reach 1.618 the length of intermediate wave (A). At 14.07 intermediate wave (C) would reach equality in length with the widest part of the triangle. This gives a wide target zone. When there is structure within intermediate wave (C) to analyse I will be able to use minor wave degree to add to the target calculation and narrow it down. I cannot do that yet.

Intermediate wave (C) may last about 18 weeks, if it is 0.618 the duration of intermediate wave (A).

If intermediate wave (B) moves higher (and the trend change is unconfirmed so it may do so) then it may not move beyond the start of intermediate wave (A) at 34.515.

The triangle structure is correct and now either complete here or extremely close to completion.

I know members and visitors will comment that this wave count does not fit with Gold. I disagree. Gold expects downwards movement for a B wave at minor degree and this may coincide with Silver’s first wave down at minor degree. When Gold expects a following upwards wave for a C wave at minor degree this may coincide with a deep second wave correction for minor wave 2 on Silver. They most certainly can move together. However, Gold and Silver do not always have their highs and lows at the same point in time. Silver tends to lead Gold.

If this wave count is correct then intermediate wave (C) should begin either here or extremely soon. Once there is some indication of this trend change on the hourly chart with channel breaches I would have some more confidence in this wave count.

Minor wave E has overshot the A-C trend line. E waves of triangles most commonly undershoot the A-C trend line, but when they do not then they tend to overshoot the trend line (they do not end right at the trend line). This gives the triangle structure a typical look and indicates it should be ending about now.

While the trend change is not indicated on the hourly chart the invalidation point remains at 22.224. Minor wave E may not move beyond the end of minor wave C.

Within minor wave E zigzag I have drawn a parallel channel about minute wave c using Elliott’s second technique: draw the first trend line from the lows of minuette waves (ii) to (iv), then place a parallel copy upon the end of minuette wave (iii). This trend channel is overshot by a strong fifth wave which is typical behaviour for a commodity market. When this channel is breached by downwards movement I will have confidence that minor wave E is over and there has been a trend change to the downside.

In the first instance a breach of the channel containing minuette wave (v) would provide earliest indication of this trend change.

There is no Fibonacci ratio between minute waves a and c within minor wave E zigzag.

Ratios within minute wave c are: minuette wave (iii) is 0.081 short of 4.236 the length of minuette wave (i), and there is no Fibonacci ratio between minuette wave (v) and either of minuette waves (i) or (iii).

Ratios within minuette wave (v) are: there is no Fibonacci ratio between subminuette waves iii and i, and subminuette wave v is so far 0.066 longer than equality with subminuette wave i.

The question mark next to the end of intermediate wave (B) indicates that it is not clear yet if this upwards movement is over. I want to see the channels on the hourly chart clearly breached before I have confidence in this trend change. If this wave count is correct then this trend change should happen within 72 hours, probably sooner rather than later.

# SILVER Elliott Wave Technical Analysis – Charts Only – 18th March, 2014

Click on charts to enlarge.

# US Oil Elliott Wave Technical Analysis – 14th November, 2013

Last week’s analysis of US Oil expected more downwards movement towards a target at 88.83 to 87.82. Price has moved lower. The structure is incomplete and the target has not yet been reached. The wave count remains the same.

Click on the charts below to enlarge.

The bigger picture sees US Oil in a new downwards trend to last from one to several years. When I can see a clear five wave structure downwards on the daily chart I will have confidence in a trend change at cycle degree. So far the downwards structure for the first wave at minor degree is incomplete, and I cannot say that there is yet a clear five down.

Typical of commodities, the fifth wave is showing an overshoot of the parallel channel. When minute wave v completes minor wave 1 then I would expect upwards movement for several days to a couple of weeks or so for minor wave 2.

The parallel channel drawn here about minor wave 1 is drawn first with a trend line from the lows of minute waves i to iii, then a parallel copy is placed upon the high of minute wave ii. When this channel is clearly breached by upwards movement then I would have confidence that minor wave 1 is completed and minor wave 2 is underway.

Minor wave 2 may not move beyond the start of minor wave 1. This wave count is invalidated with movement above 112.24.

This two hourly chart shows the end of minor wave 1. There is now divergence between MACD and price; as price moves lower MACD moves higher. I would expect divergence to continue between the end of minuette waves (iii) and (v) to come.

Minuette wave (iv) was a contracting triangle. Minuette wave (v) has begun. Within it a first and second wave are complete.

Draw the parallel channel about the impulse of minute wave v using Elliott’s second technique. Draw the first trend line from the highs of minuette waves (ii) (at 103.57) to minuette wave (iv), then place a parallel copy on the low of minuette wave (iii). I will expect downwards movement to find support at the lower edge of this channel, and it may overshoot the channel. Along the way down the upper edge of the channel should provide resistance.

When this channel is clearly breached by subsequent upwards movement that may be a first indication that minor wave 1 in it’s entirety is over and a time consuming deep second wave correction for minor wave 2 may have begun.

At 88.72 minuette wave (v) would reach 0.618 the length of minuette wave (iii).

At 88.83 minute wave v would reach 1.618 the length of minute wave iii.

I will expect this target now to be reached within a few days, probably before next week’s analysis.

Within minuette wave (v) no second wave correction may move beyond the start of the first wave. This wave count is invalidated with movement above 95.21.

# SILVER Elliott Wave Technical Analysis – 18th September, 2013

Last analysis expected upwards movement, but required a trend channel breach of the channel on the hourly chart before confidence could be had in a trend change. We have the breach now and a trend change confirmed, but price moved lower first.

This is exactly why I use trend channels; they are an integral part of Elliott wave analysis.

The wave count is mostly the same. A target can now be calculated for upwards movement to end.

Click on the charts below to enlarge.

A downwards zigzag is unfolding at primary wave degree. Within the zigzag intermediate wave (A) is complete. Intermediate wave (B) is an incomplete zigzag.

Within minor wave B the structure may be an almost complete zigzag, or this may only be minute wave a of a flat or double for minor wave B.

A parallel channel drawn about minor wave B is now clearly breached by upwards movement on the hourly chart, with an overshoot here on the daily chart. This channel breach indicates that minor wave B is over and now minor wave C is underway.

At 28.121 minor wave C would reach equality with minor wave A.

Within minor wave C no second wave correction may move beyond the start of the first wave. This wave count is invalidated with movement below 21.216.

Within minor wave B minute wave c is just 0.11 short of 1.618 the length of minute wave a.

Within minor wave C minute wave i is probably complete. Minute wave ii may be complete or it may continue further as a flat correction. If it moves lower then the target for minute wave iii must move correspondingly lower also.

At 26.09 minute wave iii would reach 1.618 the length of minute wave i.

Minute wave ii may not move beyond the start of minute wave i. This wave count is invalidated with movement below 21.216.