I have a new alternate for GDX for you. It fits perfectly with Gold’s Elliott wave analysis today.

Click charts to enlarge.

Main Wave Count

GDX daily 2014

This main wave count has an even probability with the alternate below.

Both wave counts are identical to the end of minor wave 1. Thereafter, they see minor wave 2 differently.

This main wave count sees the first wave up within minor wave 2 as a five wave structure. Within minute wave a there is a truncation at the end of minuette wave (ii), or this structure could be a combination. It would be most likely that minuette wave (iv) is a triangle, so there is no truncation there.

For this main wave count minor wave 2 is a zigzag which subdivides 5-3-5.

This possible truncation at the end of minuette wave (ii) has meant that I have considered the alternate. I do not know how readily this market exhibits truncations, but from my experience with GDX so far it does seem to sometimes exhibit truncations. I have noticed so far that its waves do not seem to be as textbook perfect as Gold, and maybe this is because it does not have as high a volume as Gold.

If minute wave a subdivides as a five then minute wave b may not move beyond its start below 16.45. This means that it is very likely that minute wave b would be over now, and has almost no room for downwards movement left. At 23.50 minute wave c would reach 1.618 the length of minute wave a, and minor wave 2 would reach up to the 0.618 Fibonacci ratio of minor wave 1 at 23.45.

Minor wave 2 may not move beyond the start of minor wave 1 at 27.78.

Alternate Wave Count

GDX daily 2014

It is also possible to see minute wave a as a three wave structure. Now the truncation is avoided. There is no Fibonacci ratio between minuette waves (a) and (c) within minute wave a, but then so far I have noticed that GDX does not exhibit reliable Fibonacci ratios. This does make target calculation more difficult.

For this alternate wave count minor wave 2 is a flat correction which subdivides 3-3-5.

If minute wave a subdivides as a three, then minute wave b may move beyond its start. The lower invalidation point does not apply for this idea. In fact, minute wave b is very likely to move below the start of minute wave a at 16.45 as in an expanded flat correction, because those are very common structures indeed.

Within minute wave b minuette wave (c) will reach 1.618 the length of minuette wave (a) at 16.44.

Within minuette wave (c) the structure must be a five wave structure. So far it looks like subminuette waves i through to iv would be complete within an impulse. Subminuette wave iv may not move into subminuette wave i price territory above 18.86.

If we see a new high above 18.86 and we do not see a new low below 16.45, then the main wave count will be most likely and I would expect that GDX is in an upwards trend to the target about 23.45.

Alternatively, if price does not break above 18.76 in the next day or so and we see a new low then I would expect this alternate wave count is most likely. There is no downwards invalidation point for this wave count; minute wave b can move substantially below 16.45.

The overall picture is still the same though: the structure of minor wave 2 for both wave counts is incomplete and the final target is mostly the same.

Second Alternate Wave Count

GDX daily 2014

This is the other alternate wave count which remains viable for GDX and Gold, but it is invalidated for Silver. Because of that, I consider this to have a very low probability. I probably will not publish this idea again.

For Gold this idea has a horrible look, so much so I don’t want to publish the equivalent wave count for Gold.

Any movement at all at any stage above 20.42 would invalidate this wave count for GDX. I expect this wave count will be invalidated within one or two weeks.

Minor wave 2 is far too brief and shallow to be complete.