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Price has moved a little lower after a channel breach of the hourly chart. The long term Elliott wave targets remain the same.

Summary: In the short term, a second wave correction, when it is over, may present an opportunity to join the upwards trend. The short term target for the correction to end is at 1,273. The target for the longer term upwards trend to end is at this stage 1,477.

New updates to this analysis are in bold.

Last published weekly chart is here.


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.

Within intermediate wave (3), no second wave correction may move beyond the start of the first wave 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.


Gold Elliott Wave Chart Hourly 2016
Click chart to enlarge.

Upwards movement for minute wave i fits as a completed impulse.

Ratios within minute wave i are: minuette wave (iii) is 1.06 short of 0.618 the length of minuette wave (i), and minuette wave (v) has no Fibonacci ratio to either of minuette waves (i) or (iii).

There is alternation between the shallow zigzag of minuette wave (ii) and the more shallow triangle of minuette wave (iv).

If my labelling on this hourly chart is wrong, it would be a premature labelling of minuette wave (b) within the correction of minute wave ii as over. Minuette wave (b) may move higher, and may make a new high above the start of minuette wave (a) at 1,303.51. This is entirely possible because minuette wave (a) fits as a zigzag, a three wave structure, on the five minute chart. It can also be seen as an impulse, so both possibilities must be considered. Minute wave ii may be unfolding as a flat or double zigzag. The structure may be relabelled minuette waves (w) – (x) – (y) for a double zigzag.

If minuette wave (b) is over as labelled, then at 1,273 minuette wave (c) would reach 1.618 the length of minuette wave (a).

Minute wave ii is likely to show up on the daily chart as two to four red candlesticks or doji. It will likely continue overall lower tomorrow.

A low degree second wave correction is not a trading opportunity. It presents an opportunity to join the larger trend. The trend at this stage for Gold is up. Do not trade against the trend. If choosing to enter long during or at the end of minute wave ii, the risk is at 1,237.97. Manage risk carefully. Do not invest more than 3-5% of equity on any one trade and always use a stop loss order. The risk is in the alternate daily wave count below.


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. I have already moved my stop to break even. If the main wave count is right, then I will not have a profit but nor will I have a loss. If this alternate is right, then I can wait until intermediate wave (2) is over to enter long for intermediate wave (3), or possibly enter a small short position to ride down minor wave C.

Intermediate wave (2) may be an expanded flat correction. Minor wave A is a three, minor wave B is a three and now 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.


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

Upwards movement for Friday closed comfortably above prior resistance at 1,280 on a day with increased volume. This looks like a classic breakout from a consolidation.

After a breakout, often price will turn back down for a correction a few days later to find support at prior resistance. Price moved slightly higher today and may now be beginning to turn down for a typical throwback to support. I have added a second support line; there are now two, one about 1,280 and the other about 1,270. Downwards movement may be expected to end at either of these two lines.

For five days in a row price rises with increasing volume. The rise in price is supported by volume. The volume spike for Monday will probably disappear when StockCharts finalise their volume data at 6:30pm EST.

ADX is increasing and the +DX line is above the -DX line. ADX is indicating an upwards trend is in place.

ATR still may be agreeing as it has so far made a small higher high and so far a higher low. ATR may be increasing.

On Balance Volume has given a strong bullish signal with a break above the orange trend line.

While the trend is up, the 13 day moving average may be expected to provide support for counter trend corrections.

RSI is not extreme. There is room for price to rise further.

This technical analysis still supports the main Elliott wave count. It does not support the alternate daily Elliott wave count.

This analysis is published @ 05:27 p.m. EST.