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The Elliott wave counts are swapped over today.

The long term target remains the same for the new main Elliott wave count. The short term target is changed.

Summary: The main wave count expects an impulse to end with a final fifth wave up at 1,255. Thereafter, a second wave correction should follow which may be deep. The alternate wave count expects downwards movement from here. In the short term, a new high above 1,248.46 would add confidence to the main wave count and a new low below 1,234.82 (before a new high) would add confidence to the alternate wave count.

New updates to this analysis are in bold.

To see last weekly charts click here.


Gold Elliott Wave Chart Daily 2016
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Volume analysis favours this wave count, which is now more likely than the alternate.

Intermediate wave (2) may be a complete expanded flat correction. It would be a shallow 0.350 correction of intermediate wave (1) lasting 56 days, just one more than a Fibonacci 55. There would be no Fibonacci ratio between minor waves A and C. Minor wave C is a complete impulse.

Within intermediate wave (3), no second wave correction may move beyond the start of its first wave below 1,200.07.

The first wave up within intermediate wave (3) is incomplete. When it is complete, then a following second wave correction should unfold and last about a week. If this wave count is correct, then the upcoming second wave correction may offer an opportunity to join the upwards trend at a good price.

At 1,582 intermediate wave (3) would reach 1.618 the length of intermediate wave (1).


Gold Elliott Wave Chart Hourly 2016
Click chart to enlarge.

An impulse looks like it is unfolding upwards at both the daily and hourly chart levels. This increases the probability of this wave count over the alternate below.

There is no Fibonacci ratio between minuette waves (i) and (iii) so far within the impulse. This makes it more likely that minuette wave (v) will exhibit a Fibonacci ratio to either of (i) or (iii). The most common ratio is equality with the first wave which would be achieved at 1,255.

If price keeps going through this first target, then the next likely target would be at 1,267 where minuette wave (v) would reach 1.618 the length of minuette wave (i).

This wave count would increase in probability further as soon as price makes a new high above the end of minuette wave (iii) at 1,248.46. At that stage, it would be fairly clear that a five wave structure is unfolding upwards.

Draw a channel about this upwards movement: draw the first trend line from the ends of minuette waves (i) to (iii) then place a parallel copy on the end of subminuett wave ii so that most upwards movement is contained. The lower edge of this channel perfectly showed today where downwards movement found support, so the channel is now reinforced.

Sometimes Gold exhibits swift strong fifth waves. Look out for this tendency here. If price breaks above the upper edge of this channel, then that would be what is happening. At that stage, targets may be too low. However, swift strong fifth waves for Gold are more commonly seen to end its third wave impulses and not often for its first wave impulses. Be aware of this possibility, but in this instance it is not the most likely scenario.

When minute wave i is complete, then a Fibonacci retracement may be drawn along its length. The 0.618 Fibonacci ratio would then be a target for minute wave ii.


Gold Elliott Wave Chart Daily 2016
Click chart to enlarge.

This wave count is now an alternate because volume and short term structure do not favour it at this stage.

Intermediate wave (2) may still be incomplete; minute wave v downwards may still be required to complete it. At 1,183 minor wave C would reach 1.618 the length of minor wave A.

Minor wave C may be an incomplete impulse. Minute wave iv may be over. If minute wave iv continues any higher, then it may not move into minute wave i price territory above 1,269.07. That must remain the final invalidation point for this wave count.

To the downside, 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.

Minute wave ii was a quick deep 0.76 zigzag lasting 23 hours. If minute wave iv is over now as labelled, then it exhibits no alternation in structure with minute wave ii: both are zigzags. Minute wave iv no longer exhibits good alternation in depth because it is now relatively deep at 0.51 of minute wave iii.

The lack of alternation in structure reduces the probability of this wave count. The reduction in alternation in terms of depth reduces probability further.

Sideways movement labelled minuette wave (b) fits perfectly as a triangle. There is no Fibonacci ratio between minuette waves (a) and (c).

A new low below 1,234.82 now would invalidate the main wave count at the hourly chart level and provide some confidence in this alternate wave count. A new low below 1,200.07 would provide final price confirmation of this alternate wave count.

In the short term, a new high above the start of minuette wave (i) at 1,248.46 would substantially reduce the probability of this wave count. At that stage, the structure of minuette wave (c) would be seen as continuing higher which becomes problematic. It is possible that minute wave iv could yet continue higher, and the invalidation point must remain at 1,269.07.



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

I am finding for technical analysis the daily chart rather than the weekly chart more useful at this stage, so only the daily will be used.

Volume over the last nine days now has two strongest days as upwards days. Price found strong support about the lower pink trend line which is about 1,210 and has bounced up from there.

The last two days complete small range days on lighter volume. This looks like a small consolidation within an upwards swing. Price today found some support about the 13 day moving average.

ADX does not indicate this market is trending. It indicates the market may still be consolidating. The ADX line is declining and the directional lines are fluctuating about each other. ATR agrees. This market is not currently trending.

A range bound approach may be used. With Stochastics returning from oversold and price returning from support, more upwards movement would be expected to continue until price finds resistance and Stochastics reaches overbought at the same time.

On Balance Volume gave a weak bullish signal with a break above the yellow horizontal line. Now OBV has come down to test support at that line. If OBV turns up from there, the strength of that line would be reinforced and that would provide a further bullish signal. This favours the main wave count.

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

This analysis is published @ 07:31 p.m. EST.