Downwards movement for the short term was expected to 1,177. Price moved lower to reach 1,178.59.
Summary: The short term outlook is unclear. Only a new high above 1,219.99 would confirm minor wave 2 as over and minor wave 3 as underway. If minor wave 2 continues further it may end in two or five more days time. It is possible minor wave 2 is over already and lasted just three days, but this is unconfirmed and careful attention to momentum, volume and structure is needed to see if this is the case.
Click on charts to enlarge.
Main Daily Wave Count
There are more than thirteen possible corrective structures that cycle wave b may take. At this stage it is unclear what degree to label this big movement. Primary wave A (or W) may be an incomplete zigzag.
Cycle wave b may be a flat correction where primary wave A is a zigzag. Cycle wave b may be a triangle where primary wave A is a zigzag. Cycle wave b may be a combination where primary wave W is a zigzag. Cycle wave b may be a double zigzag with the first in the double, primary wave W, incomplete.
When the big zigzag now labelled primary wave A is complete it is also possible that cycle wave b could be over there with the degree of labelling within it moved up one degree.
A new high above 1,308.10 would invalidate the alternate and confirm this main wave count at primary and cycle degree.
The upwards wave labelled intermediate wave (A) fits only as a five wave structure, a leading expanding diagonal. Within a leading diagonal the first, third and fifth waves are most commonly zigzags, and the fourth wave should overlap first wave price territory.
Because intermediate wave (A) subdivides as a five, intermediate wave (B) may not move beyond its start below 1,131.09.
At 1,320 intermediate wave (C) would reach equality in length with intermediate wave (A). This would complete a 5-3-5 zigzag trending upwards. At that stage alternate wave counts would be required to manage the various possibilities for cycle wave b.
At 1,429 intermediate wave (C) would reach 1.618 the length of intermediate wave (A).
Because intermediate wave (A) is a diagonal then it is highly likely intermediate wave (C) will be an impulse in order to exhibit alternation. Intermediate wave (C) may end about the upper edge of the channel drawn about primary wave A.
This wave count sill has problems of structure within primary wave 5 of cycle wave a:
– within primary wave 5 intermediate wave (2) is a running flat with its C wave looking like a three and not a five.
– within intermediate wave (5) the count is seven which is corrective; either minor wave 3 or 5 will look like a three wave structure on the daily chart where they should be fives.
It is for these reasons that I will retain the alternate until price confirms finally which wave count is correct and which is invalidated.
Lower volume for the last three days fits this main wave count. If price has entered a correction and not a new trend at a larger degree then it should be expected that during the correction volume declines. Minor wave 2 so far has lasted three days. It may be over there (second hourly wave count) or it may yet continue. If it continues it may end in another two days to total a Fibonacci five, or maybe even five days to total a Fibonacci eight.
I have three hourly wave counts for you today. I present them in no particular order; they are all three equally as likely. Price, structure, momentum and volume will tell which one is correct over the next couple of days.
Main Wave Count – First Hourly
All three wave counts see downwards movement from the high labelled minor wave 1 to the low during Tuesday of 1,178.59 as a 5-3-5 structure. All three wave counts see the subdivisions within this movement in exactly the same way.
Minor wave 2 is very likely to end about the 0.618 Fibonacci ratio at 1,172. It is most likely to subdivide as a zigzag.
This first hourly wave count sees minute wave a an incomplete impulse, with only minuette waves (i), (ii) and (iii) now complete. Minuette wave (iii) is 1.34 short of 1.618 the length of minuette wave (i).
Minuette wave (iv) would be an incomplete zigzag. This would provide alternation with the flat correction of minuette wave (ii). Minuette wave (iv) has broken out of the channel drawn using Elliott’s technique about minute wave a impulse. That is okay, sometimes fourth waves do that, which is why Elliott had a second technique to use when they do. When minuette wave (iv) is complete redraw the channel using the second technique: draw the first trend line from the ends of minuette waves (ii) to (iv) then a parallel copy on the end of minuette wave (iii). That channel should show where minuette wave (v) comes to an end.
Minuette wave (iv) may not move into minuette wave (i) price territory above 1,202.03. At 1,194 subminuette wave c would reach equality in length with submineutte wave a.
Minuette wave (v) would reach equality in length with minuette wave (i) if it is close to 18 in length.
When minute wave a is complete then minute wave b should unfold upwards and / or sideways. Minute wave b may be one of more than thirteen corrective structures and for this wave count it should show up on the daily chart as a at least one green candlestick or doji. Minute wave b may not move beyond the start of minute wave a above 1,219.99.
This first hourly wave count may see minor wave 2 end about the 0.618 Fibonacci ratio at 1,172 in another two or maybe even five days, depending on how long minute wave b lasts.
Main Wave Count – Second Hourly
Because there is now a complete 5-3-5 structure trending downwards minor wave 2 may be over there as a single zigzag. It would have lasted a Fibonacci three days and would have ended a little short of the 0.618 Fibonacci ratio at 1,172.
If minor wave 3 has begun then within it no second wave correction may move below the start of its first wave below 1,178.59.
I would have some confidence in this wave count if we see a new high above 1,202.03. But at that stage the third hourly wave count below would also remain valid.
The following three things would also add confidence to this wave count:
1. A clear five up on the hourly chart.
2. An increase in volume on the daily chart for the next daily candlestick.
3. An increase in momentum on the hourly chart (although this may not build for another couple of days).
A new high above 1,219.99 would provide full and final confirmation of this wave count.
At 1,303 minor wave 3 would reach 1.618 the length of minor wave 1. Minor wave 3 may only subdivide as an impulse, and it should show an increase in momentum beyond that seen for minor wave 1.
Main Wave Count – Third Hourly
With a 5-3-5 downwards zigzag now complete, it is also possible that minor wave 2 is an incomplete double zigzag.
Double zigzags are relatively common structures. The second zigzag in the double exists to deepen the correction when the first does not move price deep enough. Here the first zigzag labelled minute wave w has not managed to take price down to the 0.618 Fibonacci ratio, and so a second smaller zigzag may be necessary to deepen the correction.
Within a double zigzag, to achieve the purpose of deepening the correction, the X wave is often relatively shallow. Unlike a double combination (which is a sideways movement) double zigzags normally have X waves which do not make a new price extreme beyond the start of the first zigzag of wave W.
Minute wave x may not move beyond the start of minute wave w above 1,219.99. This is not a rule clearly outlined in Frost and Prechter, but my interpretation of the form outlined there for double zigzags, and my interpretation of how they behave based upon experience.
At 1,194 minuette wave (c) within minute wave x would reach equality in length with minuette wave (a).
Thereafter, this wave count expects to see a second zigzag unfold downwards to end about 1,172.
This wave count may see minor wave 2 end in two more days to total a Fibonacci five.
Alternate Daily Wave Count
This alternate wave count sees Gold as still within a primary degree downwards trend, and within primary wave 5 intermediate wave (3) has begun.
At 956.97 primary wave 5 would reach equality in length with primary wave 1. Primary wave 5 may last a total Fibonacci 55 weeks. So far it is now in its 36th week.
The maroon channel about cycle wave a from the weekly chart is now breached by a few daily candlesticks and one weekly candlestick. If cycle wave a is incomplete this channel should not be breached. The breach of this channel is a warning this wave count may be wrong.
This wave count still has a better fit in terms of better Fibonacci ratios, better subdivisions and more common structures within primary wave 5, in comparison to the main wave count above.
Within intermediate wave (3) minor wave 1 is a long extension. Within minor wave 1 minute waves iv and ii are grossly disproportionate, with minute wave iv more than 13 times the duration of minute wave i. This also reduces the probability of this wave count.
Although the invalidation point is at 1,308.10, this alternate wave count should be discarded long before that price point is reached. If the maroon channel is breached again by one full daily candlestick above it and not touching it then I would discard this alternate wave count.
A new low below 1,131.09 would confirm that intermediate wave (3) down is underway.
Lower volume for the last three days now is concerning for this wave count. If minor wave 3 of intermediate wave (3) has just begun volume should increase. Minor wave 2 already has lasted 7 days and is longer than minor degree corrections normally are. Although it is possible that only minute wave a is over and this downwards movement is minute wave b, that would see minor wave 2 far too long in duration. The probability of that idea is very low indeed. So low I hesitate to publish it and I will not give it undue weight by publishing an hourly chart for it at this time.
This wave count now needs to prove itself. It needs to show strong downwards movement with an increase in momentum and an increase in volume. A new high above 1,219.99 would further reduce the probability of this alternate at this stage, I may discard it at that point.
This alternate wave count remains technically possible.
This analysis is published about 05:52 p.m. EST.
While I have less confidence that I understand where gold is heading, the GDX daily chart doesn’t look especially bullish to me, even after today’s action. I see a number of warning signs and the H&S pattern is still in play. http://scharts.co/1IRCLNS
Miners sure blew through those gaps today though.
Agreed. When I typed that the daily volume numbers must not have been in yet. It turns out the volume was much better than I thought today but the pattern is still intact and so is the OBV divergence. Follow-on up move tomorrow would be bullish confirmation and I will change my stance if that occurs. For now, I think today was a good setup to sell the GDX.
u mean sell short. I agree.
Yes, sell short. In my case via DUST long.
Lara, Any idea what is the time frame and upper price target for minute i for (hourly 2) and what might be a down target for minute ii?
Good morning all. It looks like hourly 2 is most likely. Volume on the daily chart has increased. Momentum on the hourly chart has increased strongly. My main wave count will have minor wave 2 over and minor wave 3 now beginning.
I will have an alternate hourly wave count which will have a lower probability, quite low actually. It will allow for the possibility that minor wave 2 could be continuing sideways as a double combination; zigzag – x – second structure must be a flat or triangle. This is technically possible, this upwards move may be a zigzag for an X wave. But it’s unlikely because X waves don’t usually have strong momentum like this and it should have lower volume.
My main wave count has minor wave 3 beginning with a first wave which so far has only 1-2-3 complete. Downwards red candlesticks on the hourly chart look like the start of a fourth wave which may not move below 1,190.88. If this current downwards movement remains above that point, and then price turns back up to make a new high above 1,208.72 then we will have a clear five up on the hourly chart. Structure would confirm a third wave up underway.
Okay, I’m off to write that up with charts. Good luck everyone!
To me it appears that gold is now in hour 3 count. A double zigzag.
Lara: “Minute wave x may not move beyond the start of minute wave w above 1,219.99…..” … “Thereafter,( after wave x) this wave count expects to see a second zigzag unfold downwards to end about 1,172.”
Need confirmation from Lara to identify the hour wave count before market close.
To my eyes the Hour 3 count looks like the best fit too among the options Lara presented.
Invalidation for hourly 2 wave count now is the price point of wave i ( 1190.85.)
Now have 2 parabolic SAR on top of gold in 15 minute chart and US dollar moved up slightly. MACD and slow stochastic and momentum have all crossed down.
Is this Hourly 2 or Hourly 3 and where does it pause for correction?
Strength and length seem to indicate it’s an Hourly 2 but what do underlying wave patterns say?
I am waiting for a GDXJ pullback to the 23.30 area.
The US Dollar today is still averaging down now, that moves gold up. I would be avoiding going bearish as this bullish reaction to news could continue much longer today. Many big US news events can move gold almost the whole day. A few minutes of down action is not a sign of weakness.
On the 15 minute chart, the parabolic SAR has been under gold from 6:45 am up to right now.
Looks like GLD just made another back test. I’ve added to my DUST. I wish I had been long NUGT overnight but I was in cash instead (plus a long UWTI position). http://scharts.co/1IgSndg
There is a gap left open from this morning too, my feeling is that has to be filled or at least back tested.
Thanks. I bought UWTI at 2.18 yesterday. I put a limit sell on it at 2.50 when I went to lunch today and it got hit. I think it ended up running up close to $2.60.
If it’s a breakaway gap then its best to not expect it to be filled. They often aren’t.
I agree…and judging by the move and volume today, that may very well be the case.
Hi Mark what is you GLD target?
I tend to trade GDX (via NUGT & DUST) and not gold directly. So I dont have a GLD target but I do think these are good risk/reward levels to sell GDX via DUST. As you can see I sold my DUST nearly perfectly yesterday but I admittedly started adding back to it too soon today. I am long DUST now and added at $16.50. I could see DUST moving back to channel top north of $20. http://scharts.co/1EEEp6P
Here’s another look of the back test that I posted on 3/26. Same resistance point. http://scharts.co/1IRnGvE
Just sold my NUGT from yesterday.
Great trade. Was everyone long yesterday? I am short and currently thinking about putting my kidneys on ebay.
I went long yesterday after I saw JNUG reverse off of $16.24…I had buy orders in at $16 and $15.75 that didn’t hit. NUGT didn’t reverse as hard so I picked that up at close. I sold the position because both GDX and GDXJ are at the top of their BB’s, and the BB width isn’t expanding much yet, so I am expecting a pull back. Not sure how far, but I will be watching.
Jnug is up almost 20% since late yesterday afternoon.
Lara how can we determine between hour 2 and 3 while gold is at 1203.71?
Momentum, volume and structure.
Momentum is increasing strongly on the hourly chart. It looks like a typical third wave.
Volume has increased for the daily candlestick. If the main trend has resumed that would be expected.
My analysis will have hourly 2 as the main wave count. I will have a variation of hourly 3 as an alternate.
Unfortunately there will be no price point which differentiates the two to the upside, but in the short term a new low below 1,190.88 would tell us minor wave 2 is not over.
A clear five up on the hourly chart (we have only 1-2-3 so far) would confirm minor wave 2 as over and a third wave up in it’s early stages.
If second hour wave count is unfolding gold is not expected to go down much not to 1172???
But if third wave is unfolding gold can rise up to 1303 and then down to 1172???
Am I correct?
I think you mean 1,203 then down to 1172. The answer would be yes it is possible. Probability is in question. Lara does suggest that: Price, structure, momentum and volume will tell which one is correct over the next couple of days. I’m going with 2nd hourly especially with confidence point.
Apologies. I missed out wave count III. In that scenario, it is possible that price may drop to as low as 1162, in which minute x = minute w.
Lara’s hourly 3 seems to still be in play.
No. From my calculations, it will not touch 1172 again. After this third wave (minuette 3) is over, then minuette 4 and/or minute 2 may touch around 1195 and that is the lowest we will see until cycle C.
Main first hour count invalidated.
Is second hour wave count unfolding????
It looks like 2nd hourly count as gold is strong since 8:15 am
2nd hourly chart now has Confidence as just moved above 1,202.03.
A downbeat U.S. economic report also gave a boost to gold and silver prices. A downbeat U.S. economic report also gave a boost to gold and silver prices.
The March ADP national employment report came in at up 189,000 in March, which was a significant miss to the downside. Gold prices saw a modest pop to the upside immediately after that report was released.
We got the gap fill and backtest on GDX that I was looking for. I climbed back into my DUST position. http://scharts.co/1Dp8YM4
Yes time is up for DUST. BT complete. TSI indicator flashing buy here.
Gold jumped up and is still going up from weak US jobs data released at 8:15 am.
Buying DUST before gold stops going up is trying to catch a falling knife, dangerous.
I don’t feel that it’s akin to catching a falling knife when I identified an entry point the day before and that entry point gets hit. I will know very quickly if I’m wrong and can keep any losses at a minimum. I’m not just randomly buying DUST here because gold shot up. There’s a difference.
papudi. I have my strong doubts. It is now almost a given that wave count II is correct. Especially when price breaches 1202.03 which it did a while ago. But that would be close to minuette 3 of minute 1 of minor 3, hence we will need to wait for the pullback for minute 2 before being long in NUGT in minute 3. That is Lara’s count. I think the count could be moved down by one degree.
Tham thanks for your count and strategy.
If you have any idea of retrace target for minute 2 please share thanks.
It is still too early to tell when minuette 3 may end, let alone minute 1. I will take a hiatus until the end of minute 1 then enter a very small position for DUST down to minute 2. This will be a countertrend play so I will not put in too much. (I will concentrate more on S&P for the time being as it is seeing interesting action there. The ADP report has facilitated stronger selling pressure. There is a chance that S&P may plunge by at least 10% in a primary 4 wave).
My main play will be the third wave of minor 3, i.e. minute 3. That is the first lucrative trade, perhaps 80-90 dollars gain in gold price in an impulse movement. As a rule, I seldom touch 4th waves, they take too long and leveraged ETFs suffer slippage due to too much choppy action.
2 possible scenarios
BULLISH BAT in 1hour forming…. for this to be confirmed price has to move to 1215 and then 1148 and then buy
BEARISH BAT in Daily
for this price can move to either 1284 or 1352 at either rate bearish bat can be completed.
“Minuette wave (iv) may not move into minuette wave (i) price territory
above 1,202.03. At 1,194 subminuette wave c would reach equality in
length with submineutte wave a.”
Minuette wave c is complete at 1194.78. Now comes the target $1172.
” minor wave 2 end about the 0.618 Fibonacci ratio at 1,172 in another two or maybe even five days,”
You are assuming that wave counts I or III is correct. Wave count II takes price much higher.
Now above 1195.
Do you read ” gunner 24 ” , he’s a Gann guy and has a scary prediction for the HUI between july and october 2015
A VIEW: Gold price neutral between 1181-1190…. With 1179 holding, if unable to break below would likely see gold price rise through 1190-91/97-98…. A take out of 1169 should put the longs on the backburner; can’t say if gold price has enough in it to get this done; momentum and ROC are bullish, favors an upside
Maybe First hourly – Peak 11:00 pm at 1,189.12 – $18 = 1,171.12 wave (v) possible. Lara said minuette (v) down may be close to $18 in length.
Jim Wyckoff says Janet Yellen is giving an important speech on Thursday 8:40 am EST Speech – Chair Janet L. Yellen Brief Welcoming RemarksAt the Ninth Biennial Federal Reserve System Community Development Research Conference, Washington, D.C.
US Jobs Report is released on Friday, but the NYSE is closed Friday.
Basis what Lara had mentioned about double zig-zag unfolding into 5 wave pattern. We could see that unfolding now in the 30 minute chart. I’m already carrying my position on the buy side
So far the 3rd hourly pattern best chooses the pattern on the charts
Gold today has retraced to 50% of minor wave 1.
LARA, how does this GDX chart look to you?
Silver and Gold Still Looking Higher
Tuesday, 31 March 2015 – By Avi Gilburt
Silver and Gold Still Looking Higher
Tuesday, 31 March 2015 – By Avi Gilburt
Mark and Richard have both advised not to hold positions overnight until we see a clear low…
Lara mentioned all 3 hourly charts have the same probability. It is good that 2 out of 3 hourly charts so 67% likely have gold going down to $1,172 so I can buy GDX there as didn’t want to hold anything overnight tonight.
I know a top day trader who has an extremely high trading success percentage using an incredibly accurate custom trading software and after todays close he is predicting gold may need another 2 to 3 days to bottom and that 1,172 sounds about right.
The main hourly wave count fits very nicely with my non-Elliott view of the GDX over the next couple of days. I could see a back test to broken support around $18.60 followed by one last thrust down to make a swing low around $17.90. http://scharts.co/1Dp8YM4