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Again, upwards movement unfolded as expected from the Elliott wave count and classic technical analysis.

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. Caution is advised at this time with long positions. There is some bearishness from volume and On Balance Volume still, and ATR is not yet increasing. There is some weakness to this trend, which may be resolved shortly. But if it is not, then a deeper pullback may occur.

New updates to this analysis are in bold.

Grand SuperCycle analysis is here.

Last weekly chart is here.


Gold Elliott Wave Chart Daily 2016
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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).


Gold Elliott Wave Chart Hourly 2016
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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, minuette waves (i) and (ii) are now complete. This wave count now has Gold within a third wave up at six degrees. The middle of this big third wave should show a strong increase in momentum and it should be supported by volume.

Within minuette wave (iii), subminuette waves i and ii are now complete. Subminuette wave ii fits as a sideways combination: zigzag – X – flat. Subminuette wave iii may now be underway.

A base channel, in orange, is added to subminuette waves i and ii today. Along the way up, corrections should now find support at the lower edge of this channel. The strength of the middle of this third wave should have the power to break above resistance at the upper edge of this channel. When price breaks above the channel, then the upper edge should provide support for corrections.

Within suminuette wave iii, micro wave 2 may not move beyond the start of micro wave 1 below 1,347.23.

At 1,513 minor wave 3 would reach 1.618 the length of minor wave 1. 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. So far it has lasted only eight.



Gold Weekly 2016
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Last week completes a bullish engulfing weekly candlestick that has stronger volume than the week before. After a short downwards movement, this is a reversal pattern from down to up or down to sideways.

Price broke above resistance last week about 1,345 and closed above this line. Next resistance would be about the last high about 1,380.

On Balance Volume is giving a bullish signal at the end of last week with a break above the purple trend line. The next line to offer resistance for OBV is the new green line.

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

Overall, the weekly volume profile is bullish. Volume increases as price rises and volume declines as price falls. There is no indication yet of an end to this upwards trend at the weekly chart level.


Gold Daily 2016
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Some increase in volume today is seen over the prior upwards day. In the short term, there is support from volume for the rise in price today. However, volume is declining as price moves higher from the low seven days ago and this is of some concern for the wave count. With volume declining and price at resistance about the horizontal line at 1,375, caution is advised. It is essential that stops are used for long positions here, so that accounts are protected in the event of a deeper pullback developing.

On Balance Volume still exhibits hidden bearish divergence with price: OBV has made a new high above the prior high of 6th of July but price has not. This indicates some weakness in price. Sometimes this divergence disappears; it is not always a reliable indicator of an upcoming trend change. OBV works more reliably with trend lines. The break above both purple trend lines is a bullish signal from OBV.

RSI is still not overbought. There is room for price to continue to rise.

ADX is increasing indicating an upwards trend is in place. ATR overall disagrees still. There is something wrong now with this trend at this stage. Caution is advised with long positions here.

Stochastics is now entering overbought. Stochastics may remain extreme for reasonable periods of time during a trending market though.

Support may be expected at the 13 day moving average while an upwards trend is in place.

Looking back at the rise in price from Gold from the low at 3rd of December, 2015, it can be seen that early on in a new upwards wave volume and ATR are not always very clear. The most stark example is the three days from 29th of January, 2016, to 2nd of February, 2016: price printed green daily candlesticks for three days with a new high each day yet volume was light and declining. But this was followed by overall seven more days of very strong upwards movement to substantial new highs before any reasonable pullback was seen. Also, up to 3rd of February ATR had been declining.

Some weakness at the early stage of a new wave for Gold is acceptable.

This analysis is published @ 09:15 p.m. EST.