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More upwards movement continued to start the new week as the main Elliott wave count expected.

Summary: Use the channel on the second hourly chart and the channel on the alternate hourly chart. Assume the upwards trend remains the same while price remains within the channel. The target is at 1,296.

If price breaks below the channel with downwards movement (not sideways), then the alternate wave count would be more likely. The target then would be 1,217 at absolute minimum and likely about 1,197 – 1,192.

The main wave count has little support today from classic technical analysis. If the middle of a third wave has just passed, it has no support from volume and shows weakness due to declining ATR, contracting Bollinger Bands, and Stochastics divergence. Lighten long positions to take some profit (or exit entirely and wait for clarification) and be prepared to switch back from bull to bear if the channel is breached.

GDX is today very bearish. Will Gold follow?

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.

A third wave up now at three degrees at the daily chart level may have begun.

Because minute wave ii is a little deeper than the 0.618 Fibonacci ratio of minute wave i, and because this is the middle of a larger third wave, the appropriate Fibonacci ratio for a target for minute wave iii is 2.618.

Within minute wave iii, no second wave correction may move beyond the start of its first wave below 1,226.53.

Corrections should now begin to be more brief and shallow along the way up for this wave count. Upwards movement should have support from volume and show an increase in momentum. It is concerning that Friday’s upwards day does not have support from volume. It is now very concerning that Monday has another upwards day with even lighter volume. This does not look like a third wave.

Two hourly charts are presented today to fit with this main daily chart. The first hourly chart follows the labelling on the daily chart which sees minute wave iii complete. If minute wave iii is over now, it would have no Fibonacci ratio to minute wave i and it would be a little shorter than 1.618 the length of minute wave i.

It is my judgement today that this wave count is close to 50% likely. There is good support for the alternate over the main, but the fact is so far that price has made new highs and price supports this main wave count.


Gold Elliott Wave Chart Hourly 2017
Click chart to enlarge.

The channel is redrawn using Elliott’s first technique. If minute wave iii is over, then it shows an increase in upwards momentum compared to minute wave i. The fact that it has declining volume is very concerning though.

Minute wave ii was a deep 0.64 zigzag. Minute wave iv may be expected to be a shallow flat, triangle or combination. The most likely target for it to end would be about the 0.382 Fibonacci ratio at 1,249.

If minute wave iv is an expanded flat, running triangle or combination, then it may include a new high above 1,263.64 as part of its structure. There is no upper invalidation point for minute wave iv.

This wave count expects that minute wave v will be a very swift strong extension that may end in a blowoff top. This is common for fifth waves of Gold’s third wave impulses.

Minute wave iv may not move into minute wave i price territory below 1,243.49.


Gold Elliott Wave Chart Hourly 2017
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All the subdivisions within this wave count are identical to the first hourly chart. Only here the degree of labelling within the impulse now labelled minuette wave (i) has all been moved down one degree.

The second wave correction of minuette wave (ii) is not complete.

When minuette wave (ii) is complete, then the middle of a third wave up at four degrees should show a strong increase in momentum and should have clear support from volume.

The pink channel is redrawn here to be a base channel about minute waves i and ii. Lower degree second wave corrections should find support at the lower edge of a bull market base channel. If price breaks below the base channel with downwards (not sideways) movement, then the probability of the main wave count would reduce substantially and the probability of the alternate wave count below would increase. They may be swapped over if that happens.

Minuette wave (ii) may end about the 0.382 or 0.618 Fibonacci ratio of minuette wave (i).

Minuette wave (ii) may not move beyond the start of minuette wave (i) below 1,226.53.



Gold Elliott Wave Chart Daily 2017
Click chart to enlarge.

This alternate wave count expects that the breakout may be false. Sometimes this happens, so this wave count would provide a road map for what may happen next.

Intermediate wave (1) may have been over later. The structure within it still looks adequate.

Intermediate wave (2) may be an incomplete expanded flat correction, and so far within it minor wave B would be a 1.70 length of minor wave A, now outside the normal range of 1 to 1.38.

If minor wave B is over here, then the appropriate Fibonacci ratio for minor wave C would be 2.618 the length of minor wave A. If minor wave B continues higher, then this target must also move correspondingly higher.

Intermediate wave (2) may not move beyond the start of intermediate wave (1) below 1,123.08.

It is my judgement today that this alternate wave count has about 50% probability.


Gold Elliott Wave Chart Hourly 2017
Click chart to enlarge.

1-2-3 of an impulse and A-B-C of a zigzag have exactly the same subdivisions: 5-3-5. The subdivisions of upwards movement from the low of minor wave A are labelled the same for all three hourly charts.

If price makes a new low below 1,226.53, then this would be the only wave count.

There is unfortunately no rule stating a maximum length for B waves within flat corrections. There is a convention within Elliott wave that states when the B wave reaches twice the length of the A wave the idea of a flat correction continuing should be discarded based upon a very low probability. In this instance that price point would be at 1,271.93.

This wave count now expects a strong five wave movement downwards for minor wave C. Minor wave C would be extremely likely to make at least a slight new low below the end of minor wave A at 1,217.05 to avoid a truncation and a very rare running flat.

One possible approach to trading this alternate wave count would be to exit any long positions if the base channel on the second hourly chart above is breached with downwards movement. The channel is drawn in the same way on this hourly chart. Members may consider entering short there, or reducing risk by waiting for a new low below 1,226.53. The minimum profit target would be at 1,217, with the upper edge of the range at 1,197 a reasonable target. Stops should be set just above the last swing high, and this may mean that this possible trade would have a large risk to small reward ratio. It is up to each member to judge for themselves if this is acceptable to their accounts.

Always use a stop and invest no more than 1-5% of equity on any one trade.



Gold Weekly 2017
Click chart to enlarge. Chart courtesy of

The last four weekly candlesticks are all green and all show a constant decline in volume. At the weekly chart level, this supports the alternate wave count but is very concerning for the main wave count. A third wave up at multiple degrees should have good support from volume.

On Balance Volume is nearing resistance, but it is not there yet.

RSI is not overbought. There is room for price to rise further.

ADX indicates a possible trend change from down to up, but does not yet indicate there is an upwards trend.


Gold Daily 2016
Click chart to enlarge. Chart courtesy of

Another upwards day with a higher high and a higher low closes as a red doji. Price has broken above prior resistance and is now finding support about 1,255.

It is very concerning for the main wave count that the last two upwards days have light and declining volume. This strongly supports the alternate wave count above the main wave count.

ATR is also declining. This is absolutely not normal for a third wave. The alternate wave count must be taken very seriously.

What was prior triple bearish divergence between price and Stochastics is now today only double bearish divergence. This still supports the alternate Elliott wave count over the main wave count.

Bollinger Bands have begun to contract in the last two days. If the middle of a third wave up has just passed, this makes no sense. This also supports the alternate wave count over the main wave count.



GDX Daily 2016
Click chart to enlarge. Chart courtesy of

Price has broken out downwards from the consolidation. The breakout is strong and has support from volume. There is support for price about here at 22.75. Thereafter, next support is about 21.50.

On Balance Volume gives another bearish signal today for GDX.

Stochastics is not yet oversold. Price may move lower while Stochastics moves further into oversold.

This analysis is published @ 07:34 p.m. EST.