Select Page

Downwards movement continued exactly as expected for Gold. The Elliott wave count remains the same.

The hourly wave count will be watched carefully to manage short positions.

Summary: A deeper pullback has most likely begun. Short positions should be watched carefully because this may be a choppy overlapping counter trend movement. A short term target for short positions is now at 1,183 or 1,159. If price keeps falling through the first target, then use the second target. If price breaks clearly above the upper edge of the channel on the hourly chart, then short positions may be closed to take profit.

New updates to this analysis are in bold.

Last monthly and weekly charts are here. Last historic analysis video is here.

Grand SuperCycle analysis is here.



Gold Elliott Wave Chart Daily 2017
Click chart to enlarge.

This main wave count has a better fit for prior movement. To see the difference between this main wave count and the alternate below please refer to last historic analysis linked to above.

This main wave count expects Gold has had a primary degree trend change in December 2016. The new upwards wave is either a primary degree third wave, or a primary degree zigzag to complete a double zigzag.

Intermediate wave (1) may now be over in 30 days. Intermediate wave (2) may be about even in duration (it may last a Fibonacci 34 days), or it may be longer lasting though because corrections are often more time consuming than the impulses they correct. If it does not end in a total Fibonacci 34 days, then the next Fibonacci number in the sequence is 55.

Today’s candlestick is a clear breach of the gold channel at the daily chart level.

The first in a series of second wave corrections for Gold’s new impulses is usually very deep. Intermediate wave (2) is expected to be at least 0.618 the depth of intermediate wave (1), and very likely may be deeper. It may not move beyond the start of intermediate wave (1) below 1,123.08.


Gold Elliott Wave Chart Hourly 2017
Click chart to enlarge.

A movement at intermediate degree should begin with a five down at the hourly chart level. This is still incomplete.

When minute wave i is a complete five wave impulse, then the invalidation point for minute wave ii will move to its start at 1,219.11.

For now the invalidation point may be at 1,211.55. Minuette wave (iv) may not move into minuette wave (i) price territory.

The gold channel is a best fit; the lower edge is slightly pulled down today. So far it shows where price is finding resistance and support. Minute wave i may end when price again comes down to touch the lower edge.

There is a truncation for the end of micro wave 5 to end subminuette wave iii. This came after the strongest downwards candlestick ending micro wave 3; it may have been a movement that could be described as too far too fast. This truncation may be acceptable.

Minuette wave (iii) is just 0.73 longer than 4.236 the length of minuette wave (i). The target calculated for minuette wave (v) to end expects it to exhibit the most likely Fibonacci ratio to minuette wave (i). This target has a good probability.

If price keeps falling through this first target, then a second target may be about 1,159 where minuette wave (v) would reach equality in length with minuette wave (iii). This second target expects that both minuette waves (iii) and (v) may be extended, which would mirror the structure within minuette wave (iii). This second target is also entirely possible.

Ratios within minuette wave (iii) are: subminuette wave iii is 0.48 longer than 1.618 the length of subminuette wave i, and subminuette wave v is just 0.21 longer than equality in length with subminuette wave iii.

The upper edge of the channel should provide resistance while minute wave i continues lower. If this channel is breached with a full hourly candlestick above and not touching the upper edge, then something else may be happening. At that stage, the short term labelling within minor wave A down may be wrong; a deeper upwards wave may be developing. If the upper edge of this channel is breached, then short positions should be closed.

Intermediate wave (2) has so far lasted only two days. It should have a reasonable proportion to intermediate wave (1), so at this stage it is very unlikely that minor wave A is close to completion. Minor wave A should continue lower for a few days yet at least.

The target of 1,160 for intermediate wave (2) is a minimum. It is fairly likely to be deeper than the 0.618 Fibonacci ratio of intermediate wave (1). Within intermediate wave (2), when it arrives minor wave B should be a reasonable upwards or sideways movement. At that stage, it would be wisest to exit this market and wait patiently for minor wave C downwards to arrive. B waves do not present good trading opportunities.

If any members are choosing to trade this downwards wave, then please remember my two golden rules for risk management:

1. Always use a stop. If it is a mental stop, then apply it with discipline and watch the market carefully.

2. Do not invest more than 1-5% of equity on any one trade. Less experienced members should invest only 1-3% of equity on any one trade.



Gold Elliott Wave Chart Daily 2017
Click chart to enlarge.

This alternate wave count expects that Gold is still within a bear market. Targets for new lows can be seen on weekly and monthly charts.

Within the bear market, a primary degree correction is underway.

Primary wave 2 is most likely to subdivide as a zigzag. Intermediate wave (A) is complete and a correction for intermediate wave (B) may have begun.

Intermediate wave (B) may not move beyond the start of intermediate wave (A) below 1,123.08.

Primary wave 2 may not move beyond the start of primary wave 1 above 1,374.81.



Gold Weekly 2017
Click chart to enlarge. Chart courtesy of

The first three weeks of upwards movement came with a steady increase in volume to support the rise in price, but last week saw a decline in volume. This indicates some weakness for last week.

The long upper wick and small real body of the last weekly candlestick is slightly bearish. This is not a reversal signal at all but only a warning of internal weakness. This upwards trend will either end or see a correction at the weekly chart level; trend changes are often preceded by signs of weakness.

Price may find some resistance about 1,225.

On Balance Volume gave a weak bullish signal last week. The signal is weak because this line has been broken before. The purple resistance line offers stronger technical significance.

At the weekly chart level, RSI is increasing along with price.

ADX is still declining, indicating the market is not yet trending (but this is a lagging indicator). ADX has not yet indicated a trend change from down to up; the -DX line remains above the +DX line.


Gold Daily 2016
Click chart to enlarge. Chart courtesy of

Another downwards day is now providing a very clear breach of the best fit channel that contained prior upwards movement. A deeper pullback looks likely to have begun. This could also be a new downwards wave, but it will only be possible to distinguish which scenario is unfolding if Gold makes a new low.

These three red daily candlesticks in a row is not properly a Three Black Crows candlestick pattern because the second candlestick body does not open within the body of the first candlestick (Bulkowski’s definition). However, three red candlesticks in a row is still bearish.

A decline in volume for today’s red candlestick is slightly bullish, but not enough to have confidence that tomorrow may print a green candlestick.

On Balance Volume trend lines have been redrawn. OBV has provided a bearish signal to support the Elliott wave count as it broke below the yellow support line. Both lines may now offer resistance.

ADX previously reached extreme and is now declining. It has not yet indicated any trend change from up to down as the +DX line remains above the -DX line. ADX is a lagging indicator as it is based upon a 14 day average.

ATR is still overall flat.

Stochastics reached overbought at recent highs and there exhibited multiple divergence with price. It would be reasonable now to expect that with a breach of a trend line offering support for price that Stochastics and price may now both move lower. Look for price to find support about 1,170 and 1,140. If price finds support and Stochastics is oversold at the same time, then look for an end to downwards movement. That is not the case today, so more downwards movement overall may be expected here.

Price is about the mid line of Bollinger Bands. This may possibly offer support but the lower edge would be stronger support. Bollinger Bands are now contracting as price falls after expanding previously as price moved higher. This indicates that prior upwards movement may have been a trend and this downwards movement so far looks like a counter trend movement.


GDX Daily 2017
Click chart to enlarge. Chart courtesy of

GDX today has printed a full daily candlestick below the blue support line on price. This is a bearish signal. It looks more likely today that GDX is in line with Gold for a pullback.

There is some support here for GDX about 22.80. If price can close below this point, then the next support may be about 20.0.

The decline in price today comes with a decline in volume. The market fell of its own weight today for GDX. This does not offer support for the view that price may fall further from here; price may still be within a consolidation.

ADX is still declining, indicating the market is consolidating. ATR is also declining in agreement. No trend change from up to down is yet indicated. A consolidation may be continuing sideways here.

On Balance Volume is at support today. If OBV breaks below the yellow line tomorrow, then that would offer a reasonable bearish signal, so then expect a deeper pullback. Until that signal is seen though OBV should be expected to offer support and halt the fall in price, along with support on price at 22.80.

RSI did not reach overbought for the upwards trend. There is room for it to continue.

Stochastics did reach overbought and there exhibited some divergence with price. With Stochastics now returning from overbought, it may be reasonable to expect price to continue lower while Stochastics moves towards oversold and price moves towards support.

But first for GDX a downwards move to close below 22.80 and a downwards breakout by On Balance Volume would offer confidence to this view.

This analysis is published @ 04:54 p.m. EST.