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Another upwards day sees the main and alternate Elliott wave counts switched over.

What is now the alternate Elliott wave count still remains viable. It illustrates the risk today to trading based upon the main Elliott wave count.

Summary: Probability has shifted today to an upwards trend continuing. The target is at 1,336. If price breaks above the base channel, this probability would substantially increase. If that happens, then corrections may become increasingly brief and shallow and look out for a blowoff top.

Alternatively, a new low below 1,227.82 would shift probability back to a downwards trend and a downwards wave to the target at 1,149. If price breaks below the channel, then exit long positions and consider opening a short position.

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.



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.

At this stage, the degree of labelling within intermediate wave (2) is moved up one degree. With continuing upwards movement now reducing the probability that intermediate wave (2) is continuing, this wave count now sees intermediate wave (2) complete as a regular flat correction lasting 8 days (intermediate wave (1) lasted 23 days) and shallow at only 0.388 the depth of intermediate wave (1). This is slightly unusual but entirely possible. It is my judgement today that this wave count is about 55% likely.

If intermediate wave (3) is underway, then a reasonable target for it would be 1.618 the length of intermediate wave (1) at 1,336.

Base channels are drawn about both the starts of intermediate waves (1) and (3). Within intermediate wave (1), minor wave 3 was able to break above the upper edge of the base channel that then provided support. This is typically how price behaves around base channels. However, so far within intermediate wave (3), minor wave 3 has not been able to break above the base channel and this is atypical.

The alternate idea published below, which sees an expanded flat still unfolding, works in exactly the same way for this main wave count with the only difference that it would be labelled intermediate wave (2) rather than intermediate wave (B).


Gold Elliott Wave Chart Hourly 2017
Click chart to enlarge.

Price continues to fit within the base channel. If this wave count is correct, then price should be able to break above the upper edge. If that happens, then the alternate wave count will be discarded and the probability of this main wave count would substantially increase.

If price breaks above the upper edge of the base channel, then that upper trend line should then offer support. If price turns down to test support, it would offer a very good opportunity to join an upwards trend with confidence.

Along the way up towards the target for intermediate wave (3), if this wave count is correct, corrections should now begin to be more brief and shallow. Gold often ends its third waves with very strong fifth waves and a blow off top is expected at the end of minor wave 3 and possibly also intermediate wave (3).

Within minuette wave (iii), no second wave correction may move beyond the start of its first wave below 1,227.82.



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 today is that the correction here labelled intermediate wave (B) (which for the main wave count would be labelled intermediate wave (2) ) is an incomplete expanded flat correction.

At its end, if intermediate wave (B) continues, it would have better proportion to intermediate wave (A). It would be a deeper correction.

Expanded flats are very common structures. The normal range for their B waves is from 1 to 1.38 the length of their A waves. In this instance, minor wave B is now 1.73 the length of minor wave A. This is longer than normal but within acceptable range of up to two times the length of minor wave A.

Minor wave B still exhibits some weakness. It remains tightly contained within a channel and still exhibits some divergence with Stochastics. Volume is still relatively light. Because this wave count still has some support from classic technical analysis today it is my judgement that it is about 45% likely. This wave count illustrates the risk to entering a long position based upon the main wave count, and why it is absolutely essential that members use stops and manage position size to no more than 1-5% of equity.

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 Elliott Wave Chart Daily 2017
Click chart to enlarge.

A zigzag may now be complete for minor wave B. There is no Fibonacci ratio between minute waves a and c.

This wave count would substantially increase in probability if price breaks below the lower edge of the Elliott channel. This channel is drawn in exactly the same way on both hourly charts.

If price breaks below the channel, then long positions should be exited. A short position may be entered there, or on a throwback to resistance at the lower edge of the channel.

If minor wave B continues, then when it reaches twice the length of minor wave A at 1,256.81 this idea will be discarded based upon an exceptionally low probability.

If price breaks above the upper edge of the channel, then this idea would be discarded based upon price behaviour.



Gold Weekly 2017
Click chart to enlarge. Chart courtesy of

The bearish engulfing candlestick pattern of last week has failed. Price has made a new high.

Since four weeks ago, volume is overall declining. Price is still finding strong resistance about 1,225.

On Balance Volume has bounced up off the yellow support line. Next resistance is some distance away at the purple line. Another breach of the yellow line would be a weak bearish signal.

RSI is not extreme and exhibits no divergence with price. There is plenty of room for this market to continue higher, or lower.

ADX is strongly declining, indicating a consolidation. The -DX line remains above the +DX line, so at this stage a downwards trend would be indicated if ADX turns upwards.


Gold Daily 2016
Click chart to enlarge. Chart courtesy of

Price overshot resistance at 1,240 but could not close above this point. Volume is still light relative to the last wave up, but it does show a small increase today. This is slightly bullish.

On Balance Volume gives a weak bullish signal today with a break above the purple resistance line. This is a weak signal because although the line has an almost horizontal slope it is not very long held and only tested twice before.

RSI is not yet overbought and exhibits no divergence with price to indicate weakness.

ADX still indicates an upwards trend in place, which is not yet extreme. There is room for the trend to continue.

ATR is still overall flat, but this is not normal for a third wave. This supports the alternate Elliott wave count, but third waves can sometimes start off slowly. So this is not definitive.

Stochastics still exhibits divergence with price at the last high, but it is slight. Divergence is only single. This is a very weak bearish signal. This divergence between price and Stochastics can persist for extended periods of time during Gold’s trends and normally develops into multiple divergence before price turns. Sometimes it just disappears as it did today for GDX.

Bollinger Bands may be just beginning to widen, so volatility may be returning to this market. This would be normal for a third or C wave, so this supports the main Elliott wave count slightly.

Price is still close to upper edge of Bollinger Bands. This can persist for several days when Gold trends strongly. This does not mean price must pull back here. However, it is a warning that price may very well pullback here or very soon. If a pullback does unfold (and as long as price remains within the channel on the Elliott wave charts) then it should be used as an opportunity to join the trend.

Price still is finding resistance at the gold trend line, which previously provided support. Next horizontal resistance is about 1,255.

Overall, there is now more bullish indication in this chart than bearishness.



GDX Daily 2016
Click chart to enlarge. Chart courtesy of

Most commentary is on the chart.

GDX today shows strong notes of caution regarding this upwards trend, and this caution also applies to Gold.

A bullish change today is the disappearance of divergence between price and Stochastics at today’s new high.

Note declining volume on rising price for the last two sessions. This is bearish.

This analysis is published @ 08:20 p.m. EST.