Upwards movement was expected for Thursday’s session.
Price moved a little lower.
Summary: Upwards movement is now expected and should show an increase in momentum and strong volume over the coming weeks. Corrections may now start to be more brief and shallow. A short term target is first at 1,376, and second at 1,412. A mid term target is at 1,437. The long term target remains the same at 1,585.
New updates to this analysis are in bold.
Last weekly charts are here.
Grand SuperCycle analysis is here.
DAILY ELLIOTT WAVE COUNT
Click chart to enlarge.
Primary waves 1 and 2 are complete. Thereafter, this wave count differs from the alternate.
This main wave count will expect primary wave 3 to be longer than primary wave 1. Because this is very common, this is the main wave count. The most common scenario is most likely. At 1,585 intermediate wave (3) would reach 1.618 the length of intermediate wave (1).
Intermediate wave (2) may now be complete ending just below the 0.382 Fibonacci ratio of intermediate wave (1) and lasting 40 days.
A multi day pullback for minute wave ii is most likely now complete; it should find very strong support here at the lower edge of the maroon channel. It has now lasted a Fibonacci five days. Minute wave ii may not move beyond the start of minute wave i below 1,306.70.
Draw a channel about intermediate wave (2) using Elliott’s technique for a correction (blue lines). Price is finding some resistance on the way up about the upper edge. After breaking through resistance at the upper blue line price may then turn down to find support about there.
With this wave count expecting a third wave at four degrees to begin, look out for surprises to the upside at this stage.
Intermediate wave (1) lasted 27 days and intermediate wave (2) lasted 40 days. Intermediate wave (3) may be reasonably expected to last longer than intermediate wave (1) in both time and price. A Fibonacci 55 days would be a first expectation. Intermediate wave (3) may end with a blowoff top.
The lower edge of the maroon base channel has proven to be providing strong support. Copy this over from weekly charts: draw a base channel from the start of a first wave to end end of the second wave, then place a parallel copy on the end of the first wave. In this case, the lower edge of the base channel is providing support. If price again comes down to touch it for another pullback, then it would provide an opportunity to join the trend at a very good price. Risk to long positions is at 1,306.70. Always use a stop loss for all trades, and do not invest more than 3-5% of equity on any one trade.
HOURLY ELLIOTT WAVE COUNT
Click chart to enlarge.
At 1,437 minor wave 3 would reach 2.618 the length of minor wave 1.
Minor wave 3 may only subdivide as an impulse. Within Minor wave 3, minute waves i and now ii both look complete.
The orange channel is now redrawn using Elliott’s second technique, but the upper edge is not working to show a trend change. Price has broken above it yet returned below. In this instance, price points may be a better method to judge confidence in a trend change.
A new high above the start of subminuette wave v at 1,325.30 could not be a second wave correction within subminuette wave v, at that stage subminuette wave v would have to be over. A new short term swing high would add confidence in a trend change.
The invalidation point and risk must remain at 1,306.70 while price remains below 1,325.30. It is still possible that minute wave ii may continue a little lower, but it may not move beyond the start of minute wave i below 1,306.70.
At 1,376 minute wave iii would reach 1.618 the length of minute wave i. If price keeps rising through this first target, or if when it gets there the structure is incomplete, then the second target would be used. At 1,412 minute wave iii would reach 2.618 the length of minute wave i.
Minute wave i lasted four days. Minute wave ii has now lasted a Fibonacci five days. It has slightly overshot the maroon channel on the daily chart. If this wave count is right, then downwards movement should end here.
Downwards movement is showing strong and persistent divergence with MACD; momentum is weakening, exactly as should be expected for the end of an impulse.
If price moves lower tomorrow and the maroon channel is breached, this wave count would be in serious doubt.
ALTERNATE DAILY ELLIOTT WAVE COUNT
Click chart to enlarge.
It is possible that primary wave 3 is over and shorter than primary wave 1. Primary wave 3 shows stronger volume than primary wave 1 (see technical analysis weekly chart).
If primary wave 3 is over, then the current consolidation for Gold would be primary wave 4.
Primary wave 2 was a relatively shallow 0.35 expanded flat correction. Primary wave 4 may be a deeper zigzag which would exhibit perfect alternation.
Within primary wave 5, minor wave 2 may move beyond the start of minor wave 1 below 1,306.70.
Primary wave 5 would be limited to no longer than equality in length with primary wave 3, so that the core Elliott wave rule stating a third wave may not be the shortest is met. Primary wave 5 would have a limit at 1,477.77.
The hourly chart would be exactly the same.
TECHNICAL ANALYSIS
WEEKLY CHART
Click chart to enlarge. Chart courtesy of StockCharts.com.
Last week completes a bullish engulfing candlestick pattern, but it is not supported by volume. To see more clearly what is happening for volume last week we’ll look at daily volume.
Price may find some resistance about 1,345.
On Balance Volume is still bullish at the weekly chart level.
At the weekly chart level, RSI is still not extreme. There is room for price to rise or fall. There is no divergence between price and RSI to indicate weakness.
DAILY CHART
Click chart to enlarge. Chart courtesy of StockCharts.com.
Gold remains range bound with resistance about 1,375 and support about 1,310 – 1,305. During this consolidation, it is four upwards days that have strongest volume suggesting an upwards breakout is more likely than downwards.
Volume for Thursday’s session is slightly lighter than Wednesday. With Thursday producing a lower low and a lower high, the session did move price lower and the decline in volume may be read as exhaustion for bears. However, the session closed green; the bulls rallied at the end but not enough to produce a new high. The doji candlestick with a long lower wick is slightly bullish but would need confirmation with a green daily candlestick for the following session.
The purple trend line on On Balance Volume was not working well. OBV had today come up to almost cross back above it. The line is redrawn. This new line allows for a little upwards movement before OBV may find resistance.
RSI is close to neutral. There is room for price to rise, or fall. There is no divergence today between price and RSI to indicate weakness.
ADX is today declining. It is not yet indicating a new upwards trend. The market is still consolidating.
ATR is still overall flat to declining, in agreement with ADX.
Bollinger Bands remain tightly contracted. This market may not yet be trending.
Both price and Stochastics are coiling within this consolidation. A recent series of lower highs and higher lows for both on declining volatility may be a triangle pattern. Resistance lines on price and Stochastics are drawn in purple, support lines on both in yellow. A break above resistance by price and / or Stochastics may signal a return of an upwards trend. A break below support may signal a new downwards trend. The lines on Stochastcis will be watched closely to see if they are breached first to possibly indicate the breakout direction for price.
The longer term trend remains up. The 200 day moving average is still pointing up and price is above it. The mid term Fibonacci 55 day moving average is still pointing up and is above the longer term average. The short term Fibonacci 13 day moving average is now moving up from the mid term average, and the short term trend is also up (within the larger consolidation).
This analysis is published @ 08:13 p.m. EST.
Lara, is the weekly alt. iii on Aug 26 still valid, but the one with big problems in terms of subdivisions?
Yes, but it has big problems in terms of subdivisions.
this is the one you mean?
No, I’ve been looking at the alt. weekly iii, published Aug. 26th.
I has the current sideways action as primary 4 wave. – looks to me like this P4 could continue to November.
Is this one still viable?
Yes, that’s better. Yes, it’s still viable.
Today has stronger volume for a downwards day. So I will publish an alternate idea with primary 4 continuing. Volume offers some support to this idea today.
That doesn’t sound bullish.
Darn I’m waiting for gold to be in a strong bullish hourly channel up for a month, then I can hop in with NUGT and ride the money escalator up.
Every single time that a second wave correction is deep, one or more members will ask for an alternate wave count which shows price continuing in the direction of the second wave.
I have to make my own judgement calls on what to publish. I could manufacture wave counts in response to members requests. But IMO that would sometimes give too much weight to those wave counts and introduce too much indecision and confusion.
It would also mean I’m reacting to emotion and noise of market participants, which is exactly what I need to not do if I’m to be as objective and unbiased as I should be.
And so what I will do is look at the weight of classic technical analysis, especially volume, and make a judgement about the likely trend from that. I’ll also consider all alternate EW counts and if I can see one which meets all rules and fits well then I’ll publish it. If I cannot, I won’t.
So if anyone has an alternate idea they’d like to share, please do so. If it’s a good fit I’ll chart and publish it.
Second waves have a purpose. They exist to convince us there has been no trend change, that price will continue in their direction, and they do it right before a third wave takes off.
Agree, Lara. 🙂
Here’s the daily chart updated with the channel overshoot.
And here’s Silver, which is playing nicely with it’s trend line and respecting it.
I am reverting to my original analysis of minute wave i as ending with a slightly truncated fifth wave.
The following movement then fits neatly as a zigzag.
On the daily chart there is an overshoot of the maroon trend line, but not a breach. I define a breach as a full candlestick beyond and not touching the trend line. Due to Gold’s upwards movement at the start of this candlestick the upper wick is well within the channel, crossing the trend line.
So far that’s acceptable.
Silver continues to respect it’s trend line.
Targets for minute iii will have to be recalculated.
Invalidation point is still far away..but i think think down move is breaking the legs of bulls..
Or is it a trap for bears ?.
The breach of trend line is a concern. I think Alternate bear count is needed here.
But i will be happy if lara concludes that its not required.
As long as we have an alternate weekly possibility (with invalidation at 1282.68) I think we should be having dailys and hourlys to match as well– now that downward movement is apparent. just mho.
No.
I have two alternate weeklies which expect downwards movement. One violates an EW rule, in other words, it’s an invalid wave count (but it’s EWI’s wave count).
The other has a really big problem in terms of subdivisions.
I am not going to publish anything that violates EW rules or won’t fit.
And remember, every time, every single time, a second wave is deep and takes it’s time, members call for me to produce a wave count which calls for more movement in the same direction.
I’m not going to manufacture a wave count because members ask me to, I’m going to go with the weight of evidence in hand. At this stage it’s bullish.
Woww..no bear count…im flying…lolzz
The weekly alt. iii on Aug 26, is that one the one with big problems in terms of subdivisions?
What happend to gold…sudden fall…how this move can be seen ?
In a bull market surprises are in the direction of major trend!!!!
Lara’s wave count is coming to head!! WOW thanks Lara.
what do you mean? it seems it might make another leg down
Too early…
Also the Juniors GDXJ needs to break above the neckline
Target around 48
Re GDX what do you think on daily we are in a contracting B wave triangle with current up move an e wave to end it and then a C wave drop to 22-23 range.
Very possible. That’s the alternate idea.
25.86 on GDX need to hold.
GDX iH&S needs to break above the neckline.
Target around 28
Looks like we may have some inverted H&S patterns in play. Gold has already broken above the neckline.
Initial target = 1,332
I have a question for the forum community. Has anyone used the netdania.com charting
service? If you have I would much appreciate any comments or opinions you have about it?
Thanks in advance,
Barry
I think there are some analysts on http://www.goldtadise.com that use it. You could try asking over there.
Florian Grummes on Gold
GDX DAILY update, watching for a breakout:
> Had an inside day. Still within the triangle.
> RSI is in a tight wedge. Has been moving up as GDX consolidates. May suggest an upward breakout.
> VOLUME is lower on recent down days and higher on up days
> MACD is above the signal line and rising, yet it is still below zero
> OBV appears to be wedging and is still above two significant support lines
USD in 2008
Bigger view in 2008
So what happens to Gold, Stocks, and USD if Deutsche Bank collapses?
Lets look at some history around the time of the Lehman Brother collapse:
> The USD was in an uptrend during much of that timeline as money flocked to it as a safe haven.
> Gold was in a correction from 3/17/08 to 10/24/08. The Lehman collapse resulted in a brief “fear” trade bounce for Gold, then it’s correction continued.
> Stocks were hit the hardest during the Lehman collapse as a deep recession took place
So, if history repeats or rhymes, the USD may go up (safe haven) and the Euro may collapse if DB collapses. Other than a quick bounce for Gold (fear), Gold may move down with the USD moving up. The stock market will likely get hit the hardest with a world recession looming.
Thoughts?
I think when market collapse it will be the time when gold and USD will move in same direction. Dollar, because most of the contracts and debt for corp. and governments world wide written in US dollar, debt must be served and it will be demand on dollars. Its always this way. Gold , you right dreamer, will collapsed as everything else at first days of chaos than will go up together with a dollar as alternative investment since stocks will be totally downtrended. Gold can go up on fear factor only when its in reasonable range that market can swallow. If fear more than it can take ( like 2008) it will do as all stocks and after shockwave will start rising. Good luck to all
Breakout watch:
So the big move for the day seems to be oil once again. It may be breaking out to the upside. Lets see if tomorrow’s candle will be completely outside the triangle. Oil moving up seems to generally be bullish for stocks and Gold lately.
GDX had an inside day.