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Upwards movement was expected for Tuesday’s session. Price moved sideways to complete a small green doji.

Summary: It is still most likely that price will begin a third wave up from here or very soon. The target remains at 1,477 and risk remains at 1,237.97.

New updates to this analysis are in bold.

Last published weekly chart is here.

DAILY ELLIOTT WAVE COUNT

Gold Elliott Wave Chart Daily 2016
Click chart to enlarge.

Intermediate wave (2) may be a double combination.

Minor wave W is a zigzag, the first structure in a double. The two structures in the double may be joined by a simple zigzag for minor wave X in the opposite direction.

Minor wave Y may be a running contracting triangle. The triangle is supported by MACD hovering at the zero line here on the daily chart.

Minor wave 2 may not move beyond the start of minor wave 1 below 1,237.97.

The next wave up for intermediate wave (3) should be swift and strong. It must move above the end of intermediate wave (1) at 1,282.68. It must move far enough above this point to allow room for intermediate wave (4) to unfold and remain above intermediate wave (1) price territory.

At 1,477 it would reach equality in length with intermediate wave (1). This target is reasonable because intermediate wave (2) was very shallow.

If intermediate wave (2) is over as labelled, then it may have totalled a Fibonacci 34 sessions.

Minor wave 2 has moved lower and is now 0.71 the depth of minor wave 1. Minor wave 1 lasted two days. Minor wave 2 now has lasted a six days. If it is over here, it would still have good proportion and look like a clear three wave structure on the daily and hourly charts.

HOURLY ELLIOTT WAVE COUNT

Gold Elliott Wave Chart Hourly 2016
Click chart to enlarge.

Minor wave 2 fits as a zigzag. Minute wave a must be seen as a five wave structure. This will fit although it does seem a little forced.

Minute wave c no longer has a Fibonacci ratio to minute wave a.

Within minor wave 3, a first wave may be close to completion for minuette wave (i). If upwards movement makes a new short term high, it may be subminuette wave v. If that is followed by a three wave structure downwards which does not make a new low, then some confidence may be had in a trend change.

When minuette wave (i) is a complete impulse, then the following three wave structure downwards for minuette wave (ii) may find support at the pink trend line, copied over from the daily chart. If price behaves like that in the next 24 hours, it may offer a good entry point for a long position on Gold.

The invalidation point and risk must remain at 1,237.97 while there is no confirmation of a trend change.

Confidence may be had in a trend change with each of these conditions being met, in order:

1. A five up followed by a three down which does not make a new low.

2. A breach of the upper edge of the pink channel.

3. A new high above 1,295.34.

4. A new high above 1,303.51. This will be final confirmation.

Depending upon risk appetite, members may choose to wait for one or more of these conditions to be met before entering long. Manage risk carefully. The risk of a loss on a long position here must be accepted. The alternate wave count does remain viable, although unlikely. Do not invest more than 3-5% of equity on any one trade, and always use a stop loss to protect your account.

At 1,367 minor wave 3 would reach 1.618 the length of minor wave 1. If this target is wrong, it may be too low. The next possible target would be at 2.618 the length of minor wave 1 at 1,433.

Minor wave 3 may only subdivide as an impulse. Within the impulse, minute wave i may begin about here. When it arrives minute wave ii may also be deep and may also be time consuming.

It would not be until the middle that acceleration to the upside may be expected to be clear for minor wave 3. The fourth wave corrections within it may be quick and shallow, and the fifth waves to end minor wave 3 and then the final fifth wave up of minor wave 5 also may be expected to be very strong movements, completing blowoff tops for Gold.

ALTERNATE DAILY ELLIOTT WAVE COUNT

Gold Elliott Wave Chart ly 2016
Click chart to enlarge.

It is still possible that intermediate wave (2) is not over.

Normally, the first large second wave correction within a new trend is very deep, often deeper than the 0.618 Fibonacci ratio. The main wave count sees intermediate wave (2) as very shallow at only 0.19 of intermediate wave (1). This is unusual. And so this alternate must be considered.

If any members have long positions on Gold already it is essential that stops are used in case this alternate unfolds.

Intermediate wave (2) may be an expanded flat correction. Minor wave A is a three, minor wave B is a three and a 1.28 length of minor wave A. This is within the normal range of 1 to 1.38.

At 1,183 minor wave C would reach 1.618 the length of minor wave A. This would be the most likely target. If price keeps falling through this first target, then the second target would be at 1,108 where minor wave C would reach 2.618 the length of minor wave A.

Intermediate wave (2) may not move beyond the start of intermediate wave (1) below 1,046.27.

ALTERNATE HOURLY ELLIOTT WAVE COUNT

Gold Elliott Wave Chart ly 2016
Click chart to enlarge.

Minor wave C must subdivide as a five wave structure. So far only minute waves i and ii may be complete.

Minute wave iii must subdivide downwards as an impulse. It would be unlikely to be over because that does not allow enough room for upwards movement for minute wave iv to unfold and remain below minute wave i price territory.

Minute wave iii is most likely to be incomplete. Minuette wave (i) is a complete impulse. Minuette wave (ii) may be close to complete as an expanded flat correction. At 1,270 subminuette wave c would reach 2.618 the length of subminuette wave a. As soon as subminuette wave c is a complete five wave structure, then minuette wave (ii) should be over.

Thereafter, minuette wave (iii) must make a new low below the end of minuette wave (i).

Minuette wave (ii) may not move beyond the start of minuette wave (i) above 1,295.34.

TECHNICAL ANALYSIS

Gold Elliott Wave Chart Hourly 2016
Click chart to enlarge. Chart courtesy of StockCharts.com.

A small green doji indicates indecision, a balance between bulls and bears. Overall, the bulls were slightly winning for the session.

A doji on light volume isn’t concerning for the bullish scenario, but the fact that the candlestick is green and volume is light is slightly concerning. This concern would be alleviated with one more upwards day on increasing volume.

So far as price rises volume rises (except for today). Volume declines as price falls. So far overall the volume profile remains bullish.

On Balance Volume is very clear today. It has found support and moved away from the blue trend line. This trend line has strong technical significance. It should serve to hold up price about here, and stop price falling much if at all further.

ADX is today declining indicating there is currently no clear trend. It has not indicated a trend change. When a trend returns at this stage it would remain upwards.

ATR is flat overall also indicating there is currently no clear trend. With the last six days price movement most likely corrective, this makes sense.

RSI is neutral. There is room for price to rise or fall.

Stochastics has returned from overbought. There is room for price to rise again.

This analysis is published @ 07:20 p.m. EST.