Again, upwards movement was expected.
A new high above 1,333.66 added further confidence to the main Elliott wave count. The target remains the same.
Summary: The trend is up. The target remains at 1,582. Corrections are an opportunity to join the trend. Invest no more than 3-5% of equity on any one trade and always use a stop loss on all trades. In the short term, another small second wave correction may arrive within the next 24 hours. The invalidation point is at 1,312.50 and stops may be set just below this point. The short term volume profile is still bearish, so members are strongly advised to manage risk carefully. It is still possible that the pullback is not over and may yet move lower below 1,312.50. For positive positions today, stops should be moved to at least break even to eliminate risk.
New updates to this analysis are in bold.
Grand SuperCycle analysis is here.
Last weekly chart is here.
DAILY ELLIOTT WAVE COUNT
Click chart to enlarge.
Primary wave 2 is a complete expanded flat correction. Price from the low labelled primary wave 2 has now moved too far upwards to be reasonably considered a continuation of primary wave 2. Primary wave 3 is very likely to have begun and would reach 1.618 the length of primary wave 1 at 1,582.
Primary wave 3 may only subdivide as an impulse.
So far intermediate waves (1) and (2) may be complete within primary wave 3. The middle of primary wave 3 may have begun and may also only subdivide as an impulse.
Within intermediate wave (3), the end of minor wave 1 is moved up to the last high. This fits on the hourly chart although it looks odd here on the daily chart. There was a small fourth wave correction up at the end of minor wave 1 and it subdivides on the hourly chart as an impulse. Minor wave 2 may be a complete zigzag, also subdividing as a zigzag on the hourly chart. If minor wave 2 is over, it would be 0.50 the depth of minute wave i.
No second wave correction may move beyond the start of its first wave below 1,310.84 within minor wave 3.
At 1,437 intermediate wave (3) would reach 1.618 the length of intermediate wave (1). If price keeps going upwards through this first target, or if it gets there and the structure is incomplete, then the next target would be at 1,552 where intermediate wave (3) would reach 2.618 the length of intermediate wave (1).
HOURLY ELLIOTT WAVE COUNT
Click chart to enlarge.
Minute wave iii may only subdivide as an impulse. At 1,372 it would reach 2.618 the length of minute wave i. If this target is wrong, it may be too low. If this target is right, then minute wave v would be a swift strong extension, which is what should be expected.
Minute wave iv may be expected to be very brief and shallow, so that minor wave 3 has a curved look. Gold often exhibits swift strong fifth waves, and this tendency is particularly prevalent for Gold’s third wave impulses. This is what should be expected for the end of minor wave 3 and probably also the end of intermediate wave (3). These impulses look like they are developing a typically curved look for Gold. When the fourth wave corrections higher up arrive, they may be very quick and shallow and not offer good entry points to join the trend except for the most nimble and active traders.
So far, within minute wave iii, the first wave of minuette wave (i) may be very close to completion. Within this impulse, subminuette wave iv may not move into subminuette wave i price territory below 1,321.60. Subminuette wave iv is likely to be very shallow because subminuette wave ii was very deep.
When subminuette wave v makes a new high above the end of subminuette wave iii, avoiding a truncation, then it may be over at any stage. The following correction for minuette wave (ii) may or may not show up on the daily chart. At this stage, within a big third wave, it may still show up. Gold often exhibits deep and time consuming second wave corrections to start its third wave impulses.
If minuette wave (ii) does show up on the daily chart as one or more red candlesticks or doji, it would offer an opportunity to join the upwards trend. Minuette wave (ii) may not move beyond the start of minuette wave (i) below 1,312.50.
Draw a best fit channel about this upwards movement, shown in orange. In the first instance, look for corrections to find support at the lower edge of this channel. If that trend line is breached, then look for support at the next trend line shown in cyan.
At 1,515 minor wave 3 would reach 1.618 the length of minute wave i. This target fits only with the second higher target for intermediate wave (3) on the daily chart.
Minor wave 3 should have support from rising volume and it should exhibit stronger momentum than minor wave 1.
Intermediate wave (1) lasted a Fibonacci thirteen days. Minor wave 1 lasted a Fibonacci eight days. Minor wave 3 may be expected to last longer, about a Fibonacci thirteen or maybe twenty one days.
ALTERNATE DAILY ELLIOTT WAVE COUNT
Click chart to enlarge.
Alternates should always be considered. This alternate today will be published as a daily chart only. No hourly chart will be published for it because that would give it undue weight.
This alternate is still possible in that many things are possible. It does have a reduced probability today though.
It is still possible that minor wave 2 could be continuing further sideways or lower as a double zigzag or double combination. It may not move beyond the start of minor wave 1 below 1,249.94.
If minor wave 2 is continuing, then it would be much longer in duration than intermediate wave (2), one degree higher. So far intermediate wave (2) lasted six sessions, and minor wave 2 would be in its fifteenth session but only just over half way through. At its end, minor wave 2 would be grossly disproportionate to intermediate wave (2). For this reason, this alternate wave count must be judged to have a lower probability than the main wave count today.
If minor wave 2 is continuing sideways as a double combination, then within it minute wave x may make a new high above the start of minute wave w at 1,374.91. There is no upper invalidation point for this alternate wave count, so there cannot be an upper confirmation point for the main wave count.
This alternate is presented again today because it has some support so far from volume; the short term volume profile is bearish still.
TECHNICAL ANALYSIS
WEEKLY CHART
Click chart to enlarge.
The week before last week completed a bearish engulfing candlestick pattern that was supported by an increase in volume. This bearish reversal pattern indicated a trend change from up to either down or sideways.
This weekly candlestick completes another red candlestick with lighter volume than last week. The fall in price last week was not supported by volume. Volume last week was lightest for six weeks, so this decline is significant. This last downwards week looks like a counter trend pullback within a larger upwards trend. The prior rise in price was supported by volume.
The reversal implications of the bearish engulfing candlestick pattern may now be fulfilled. A reversal pattern only indicates a trend change and gives no indication of how far or for how long the next trend should be. It also does not mean a change from up to down or down to up but may also mean a change from up to sideways or down to sideways.
Price may be finding support at the horizontal trend line about 1,310. Two weeks in a row with longer tails on these candlesticks is slightly bullish.
On Balance Volume is not working with the upper purple line, because it broke above the line giving a bullish signal only to turn and break below the line. The lower line so far should provide support if OBV moves lower.
DAILY CHART
Click chart to enlarge.
Monday’s session completes a small hammer candlestick pattern. When this pattern occurs at a low after a decline, then it is a bullish reversal signal.
The daily candlestick for today’s session is too small. The high for this candlestick is 1,329, but the high for the same candlestick on COMEX data is 1,341. Volume from both data feeds shows the two upwards days on declining volume, where the two downwards days immediately prior came on stronger and increasing volume. In the short term, this volume profile is bearish and does not support the main Elliott wave count.
This rise in price is not supported by volume, so it is suspicious. For this reason, the risk presented by the alternate Elliott wave count should be understood to be possible.
On Balance Volume today has broken above the lower stronger purple trend line. The previous bearish signal given by a break below this line is now negated. If OBV breaks above the upper purple line, that will be a reasonable bullish signal.
RSI is neutral. There is plenty of room for price to rise or fall.
ADX is still declining. This pullback has brought ADX right down from extreme back into normal range. A trend may again develop. The +DX and -DX lines are whipsawing about each other. ADX is not indicating yet which direction a trend may develop.
ATR is also declining in agreement with ADX. This market is still consolidating. Both these indicators are lagging as they are based on 14 day averages.
Stochastics reached oversold, just, and is now returning. An end to the downwards swing should be expected about here as Stochastics reached oversold and price reached support at the same time, at the trend line about 1,310.
This analysis is published @ 07:39 p.m. EST.
we will have an answer as to which count is correct after BOJ overnight US time. I’m certain of that. the weekly slow stochastics of GLD are no longer ’embedded’ as of last Fri and it will take a strong move up tomorrow to re-embed. If we don’t get it, it suggests gold will go lower to visit 18 wk MA near $1277 now but rising. This fits alt count. If it re-embeds, it should ride the upper BB a few more weeks as main count suggests. If anyone is familiar with Ira Epstein, this is his own teaching over 4 decades of studying charts. Doesn’t work all of the time, but the majority of the time.
It looks like minuette (i) is a complete impulse, and it looks like a pretty good five.
Now minuette (ii) down unfolding.
Minuette (ii) is very likely to break out of the channel drawn here about minuette (i). The 0.618 Fibonacci ratio is still a reasonable expectation, even at this stage in a third wave. But if this expectation is wrong it may be too low.
I would expect minuette (ii) to have a clear three wave look to it though. And it hasn’t got that yet.
I’ve moved the stop on my long to breakeven, now will look to add to my long at the end of this correction. Buy the dips. Buy and hold, let the profit run all the way up to 1,582 is my plan. Now, plans like that don’t always work out. But when they do it’s great.
Lara,
thanks for the update. 2 Q’s?
1. At what level would you say the ALT. is in play it heading lower to 1297 for Minor 2?
2. Can Minute Y of Minor2 have 5 waves Or it needs to be 3 Waves?
1. Below 1,312.50.
2. Minute y must be a three.
Lara,
Thanks, here is another viable option, it works for a deeper drop in a five waves for a Minute [c] of Minor2. Curious to see which one works out as both have the same purpose.
Used your Alt. chart for easy labeling from yesterday, hope you don’t mind.TIA
Recent comments from Avi Gilburt….see chart. A little confusion on his site also, but he is generally bullish (big picture) up to 39ish.
Melanie Thanks a Lot!!!
Anybody else thinking sideways until BoJ statement later?
Gold started dropping 8:30 am the minute this news came out this morning.
THURSDAY, JULY 28
8:30am
U.S. jobless claims rise 14,000 to 266,000
Interesting. I know there is more economic data tomorrow, although always hard to guess the significance for gold.
Yes hard to guess effect on gold.
Today 8:30 a big effect and may not be awake and ready to trade pre-market.
The news might get credit, however it was the EW sentiment effect that was the cause.
FRIDAY, JULY 29
8:30 am Gross domestic product Q2 2.6% 1.1% (Q1)
8:30 am Employment cost index Q2 0.6% 0.6%
9:45 am Chicago PMI July — 56.8
10 am Consumer sentiment July 90.4 89.5 (July)
http://www.marketwatch.com/Economy-Politics/Calendars/Economic
Thanks for posting the info.
July 29 BOJ Monetary Policy meeting
I have no idea the effect of this?
I am no expert on this, but I think the potential effect on gold would come indirectly through the BoJ’s decision on whether to opt for more stimulus and the subsequent effect on the dollar. If anybody knows more than I, by all means correct me if I am wrong.
Is gold still dropping to 1331.36 to 1330.65 before heading up again or was the drop to 1332.55 at 1:21 market low it?
Gold did drop from 1336.45 at 1:42 pm but NUGT didn’t care and kept going up strong from 12:10 150.14 at 2:32
I reckon that 1332.55 could be the low. Let’s wait for Lara’s analysis.
Thanks Alan.
Quite amazing how NUGT started at a pre market high of $154.00 at 8:09 am then gold dropped $13.00 and NUGT dropped $13.50 down to 12:10 pm day low of 140.57 and then gold only went back up $4.00, however NUGT climbed back up $10.27 to the 2:53 pm market high of 150.84. Incredible demand pouring back into NUGT has huge effects on price. Most popular miners ETF 3x in the world.
That is a huge Buy the Miners Dip testimonial.
I’m struggling with short term direction. The main wave count looks good, but I’m struggling with any wave 2 which retraced 93% especially within a third wave. I’m more inclined to think a flat correction completed a few hrs ago. Just don’t know where it fits in with any wave count other than alt count which has its own issues. Nonetheless, I remain neutral for now but int trend is still up. Maybe BOJ tonight proves me wrong and gold rockets higher.
oops doesn’t look anything like a flat so would be ZZ in this case.
Subminuette (i) started at 1312, and ended at either 1342 or 1345 depending on how you look at it. SM (ii) has retraced back to 1332, which makes it a 30.3% or 39.4% retracement (depending on where you see SM (i) end)…
I was wondering how you got a 93% retracement calculated?
The move down is looking complete imo
Awesome. Thanks. Only issue I have is look of C wave on 1 hour chart to end subminuette wave 4. The second to last candle is green and would have preferred all red going down so possibility exists this a a/b/c down and not part of expanded flat, although it has a good look otherwise.
I’m referring to subminuette ii. It’s right in the analysis as ‘very deep’.
i think we are in minuette 2
We have clean 5 Micro Waves to complete impulse subminuette i down from the Peak at 8:30 AM, very likely
NUGT day low at 140.57 at 12:10 gold low 1333.12 at 12:15
Alan, your early morning analysis posted earlier was awesome. Easy to read/digest too. And now you’re right on top of this thing. Thanks so much for sharing your knowledge for excellent trade placement.
Thanks dsprospering.
It does seem that Lara is right after all. The price rise from the 1333.12 low looks like it is a 4th wave. I just took a quick profit, and am waiting for the 5th wave down to complete subminuette 4 at 1331.36 to 1330.65 calculated at two degree levels before getting back in.
If it is a 4th wave, there are 3 waves up. If my original count is correct, there will be 5. Let’s wait and see.
Was the low of 1335.67 at 10:52 the bottom of subminuette 4 ?
Or just the bottom of the 3rd or 5th wave down of a 5-3-5 down to the target still at 1,333.53?
There is some slight ambiguity with the wave count today.
If Lara’s count is correct, price is following an expanded flat for subminuette 4. The reason is because she chose 1342.18 as the end point of subminuette 3. Price moved down to 1336.43 and then up to 1345.70. These are the A and B waves. Fib ratios are excellent, B=1.618*A. So C should be 2.618*A, which translate to a price of 1330.65. We are now in a 5-wave down for the C wave.
I chose 1345.70 as the end point of subminuette 3 so that micros 3, 4 and 5 are not so bunched up together. This makes for a better look. So, my wave count begins subminuette 4 at 1345.70. It would end at 1333.53.
The difference is this: Lara’s count requires the down wave to be a five, mine a three. I will use this to distinguish the counts. This is important for those of us seeking a perfect entry point to trade subminuette 5.
Alan, great comment and very helpful target 1,333.53 for bottom of subminuette 4 entry point to buy for the subminuette 5 move up higher well above the 8:30 am high of 1,345.70.
Thanks Richard. I’m out. It now does look like a 4th wave, too slow to be a first wave up. See my reply to dsprospering for my next play.
It might be also that 1345 was the end of minute (i) and now we’re in minute (ii). We’ll just have to see how this plays out… Any price that would differentiate a subminuette 4 vs. minute (ii) anyone?
No ari. From my analysis, it is not possible, unless you can somehow wish away that expanded flat.
ok, thanks 🙂
Ari, did you mean that 1345 was the end of Minuette (i) and that we are currently in Minuette (ii)? If so, my husband agrees with you and thinks that we are close to the end of Minuette (ii) where 1333 = 0.382 Fib.
My count is closer to Alan’s, but I’m wondering if Subminuette iii ended around 1343 at 4 AM ET and the high of 1345 is the B wave of an expanded flat of Subminuette iv.
Beth, for some reason I can’t reply to your post, so i’ll reply to mine. Yes, I meant subminuette (i) and (ii)… thanks for the clarification.
We have reached or most likely reached the end of the third wave at 1333.64. It is crunch time.
Anyway, to be gungho, I am going to buy a small amount of NUGT.
I’m in. To cover all bases, I’ll monitor price as it reaches 1336.86, the 0.382 retrace of Lara’s 3rd wave, which will be submicro 4. If her count is correct, price will drop from there for a final fifth wave, ending subminuette 4.
likely Subminuette V, Minuette (i) completed at 8:30 Or slightly higher yet?
Here’s a look at volume, RSI and OBV breakouts. Bullish!
GDX had an upwards breakout today following a brief drop after the Fed minutes release.
We are clearly in some level of a wave 3 up, but it might not be Minute 3 as I have it labeled.
Comparing the GDX count and Lara’s Gold count, there appears to be a discrepancy in that the Gold count looks more bullish with two large 1-2’s in play (Intermediate and Minor).
I think the GDX count will need to be updated with higher targets and maybe some wave degree changes in the coming days.
This could include, among other options, an extended Minor wave 5, or relabeling Minor waves 3/4 to Minute waves 1/2 for a more extended Minor wave 3.
Overall, this is even more bullish for GDX. The trend is up!
Lara, thanks for the iPhone / iPad app. I look forward to giving them a try, although I would say that the website works well with both, so not sure what the advantages of the app will be. One thing that I like with the website is that you can enlarge any of the screens to easily zoom in for better detail on the small screens.
You’re welcome, but TBH it was Cesar that built it.
We thought some people may prefer an app icon on their mobile devices for easier access. And it offers us better access to the mobile market.
Android version coming really soon, just waiting for approval (it’s built and submitted)
Regarding closing gold prices and volume:
I’ve never really understood why this is, but gold prices “officially” close at 1:30 eastern time, even though trading continues until 5:15… that is why the candlestick today shows 1326, on light volume. That’s the price and volume at 1:30 eastern, when price “closed” for the day. Obviously the price action and volume was much higher after 1:30, because the FED announcement was not until 2 pm eastern. So the chart is not incorrect, it’s showing the price and volume at the official closing time.
Hope that helps with the confusion… it might be better to find a TA chart that takes into account price and volume until 5:15 pm eastern; if there is any.
That is strange. And it’s happening with COMEX data too… from Chicago…. I was under the mistaken impression that data up to 4:30pm EST was taken for each daily candlestick.
That’s a hassle, but does explain the discrepancy.
Thank you for the information Ari.
To save myself some time I’ll ask if you have a link to a data source that takes volume data closer to closing time? You or another member may do so… which would mean I don’t have to ask Google 🙂
I haven’t found any sites that do that. All platforms want to go with the official numbers. So following GLD might’ve the next best option as others have mentioned here…
PMbull.com shows prices/candlesticks of what we’re looking for (closing at 5:15) but not sure if their volume data is correct/reliable…
Okay, thanks Ari.
I have a really big problem with doing volume analysis on the Gold cash market using SPDR data.
I’ll look at it, and consider it, but I can’t take that data as correct.
I understand the problem though.
No problem 🙂
Lara et al, regarding volume the front month August is starting to roll to Dec contract. 211k August traded and 160k Dec traded today. All in over 400k contracts traded which is biggest day since brexit.
Thanks Lara. I see the same thing you’re seeing with Stockcharts end of day. It seems the volume data may be incorrect, as indicated by their incorrect candlestick for the day. I don’t know about comex data, but as a proxy, I typically use GLD data (since that’s what I trade anyway), and it does indeed show an expected large increase in volume today over prior days (about 10 previous days). I’m going with that, as it would be expected to see high volume, whether prices are up or down, on fed decision day.
Thanks so much Eli for that information.
Sometimes StockCharts data changes retrospectively. Normally it’s stable after 6:30pm. But not always 🙁
I’m going to bet now that it’ll be showing an increase in todays volume… tomorrow.
So if today has strong volume, then that strongly supports the main wave count.
Actually Lara, Eli raises a good point. There seems to be many occasions where Stockcharts and/or Comex volume data are doubtful or implausible. When that happens, reference to GLD data may help to adjudicate how much weight should be given to each.
(Posted before you replied)
Possibly. But then which do I assume is correct? StockCharts for the Gold cash market? Or COMEX for the Gold cash market? Or GLD which is not the Gold cash market but SPDR Gold Shares?
It’s a perennial problem. It’s really annoying, and it just shouldn’t happen.
StockCharts has now caught up since this analysis was posted. It now shows an increase in volume today above yesterday, and it now agrees with COMEX.
Please see my explanation above. It is a bit of a dilemma…
Thanks Ari. Yes, a bit of a dilemma.
I don’t really want to be doing the analysis too much later….
I’ll just have to keep going with what I’ve got and find somewhere else to check volume on at publication time.
Wherever there is disagreement between Stockcharts and Comex, then GLD could provide a third (voting) opinion. As it’s a ‘share’ traded on one exchange, without the complication of cash and futures and in limited hours, it may be a purer measure.
I’m only speculating here.