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Price made a lower low and lower high today, the definition of downwards movement. Overall, this was expected.

But the session closed green with a strong bounce and that was not expected as the most likely scenario, but it was allowed for.

Summary: The target for a deep pullback is at 1,148. Corrections along the way down present opportunities to join the trend.

Follow my two Golden Rules of risk management:

1. Always use a stop.

2. Invest no more than 1-5% of equity on any one trade.

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.

MAIN ELLIOTT WAVE COUNT

DAILY CHART

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) is an impulse that may have lasted 23 days, two longer than a Fibonacci 21. Intermediate wave (2) may be unfolding as a very common expanded flat correction.

Within intermediate wave (2), minor wave A fits best as a regular flat and minor wave B is a zigzag. Minor wave B is longer than the common length of 1 to 1.38 times A, but within the allowable convention of up to two times the length of A.

The appropriate target for minor wave C is 2.618 the length of minor wave A.

So far intermediate wave (2) has lasted 21 sessions. Minor waves A and B have lasted a Fibonacci eight sessions each. If intermediate wave (2) exhibits a Fibonacci duration, it may be a total 34 sessions.

Alternatively, intermediate wave (2) may not exhibit a Fibonacci duration.

HOURLY CHART

Gold Elliott Wave Chart Hourly 2017
Click chart to enlarge.

Minute wave ii is not over and is most likely continuing further as an expanded flat correction. These are very common structures.

Within minute wave ii, minuette wave (b) is 1.2 times the length of minuette wave (a). This is within the common range of 1 to 1.38.

The target for minuette wave (c) assumes the most common Fibonacci ratio to minuette wave (a). It may also see price come up to touch the cyan resistance line.

When minute wave ii is over, then a base channel may again be drawn about minute waves i and ii. Minute wave ii is expected to be very deep because this is reasonably common for the first in a series of Gold’s second wave corrections within its new trends. When it does this, it introduces substantial doubt as to the trend and convinces us there is no new trend right before a third wave takes off in the opposite direction. Be aware of this psychology.

The next wave down for minute wave iii should exhibit an increase in momentum.

ALTERNATE ELLIOTT WAVE COUNT

DAILY CHART

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.

The alternate idea reverts back to seeing the correction here labelled intermediate wave (B) (and for the main wave count it would be labelled intermediate wave (2) ) as a complete regular flat.

The next five up, for this alternate labelled intermediate wave (C) (and for the main wave count labelled intermediate wave (3) ), may have begun.

Within the impulse upwards, a first wave labelled minor wave 1 may now be complete. Minor wave 2 may not move beyond the start of minor wave 1 below 1,181.41.

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

The long lower wicks on three of the last four daily candlesticks offers some support today to this wave count.

HOURLY CHART

Gold Elliott Wave Chart Daily 2017
Click chart to enlarge.

Minor wave 2 may have continued lower. Within minor wave 2, a triangle may be seen for minute wave b. However, this triangle looks forced: minuette wave (e) falls too far short of the (a)-(c) trend line for a normal look.

There is no Fibonacci ratio between minute waves a and c.

It is possible that minor wave 2 could continue lower as a double zigzag. If a new low below 1,217.05 is seen, then that would be the option. However, minor wave 2 should find support at the lower edge of the black channel on the daily chart and this does not allow for much more downwards movement for this alternate.

If that black trend line is breached, then this alternate wave count would be discarded.

TECHNICAL ANALYSIS

WEEKLY CHART

Gold Weekly 2017
Click chart to enlarge. Chart courtesy of StockCharts.com.

The long upper wick and smaller real body on last week’s candlestick is slightly bearish. The decline in volume is also bearish.

The strongest weekly volume in recent weeks is a downwards week, and this too is bearish.

On Balance Volume is some distance away from resistance.

ADX continues to decline indicating no clear trend.

DAILY CHART

Gold Daily 2016
Click chart to enlarge. Chart courtesy of StockCharts.com.

Price made a lower low and lower high today, the definition of downwards movement. However, the candlestick closed green and the balance of volume for the session was upwards. A decline in volume from yesterday’s balance of downwards day indicates more support yesterday for downwards movement during the session than support today for upwards movement during the session.

On Balance Volume has some distance to travel before it finds support.

ADX is now extreme, so a pullback should be expected.

GDX

DAILY CHART

GDX Daily 2016
Click chart to enlarge. Chart courtesy of StockCharts.com.

The bearish signal from On Balance Volume yesterday should still be given weight. OBV may be coming up now to back test resistance at the line. If it moved down tomorrow, that would strengthen the bearish signal.

The balance of volume for this session was upwards and it shows a reasonable decline. There was not support during the session for upwards movement. This is bearish.

This analysis is published @ 07:20 p.m. EST.