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Downwards movement continued for Thursday as expected. Price is now below the lower edge of the base channel on the hourly chart.

Summary: A pullback to about 1,230 may continue. The target may be reached now in another 3 days time. Volume and On Balance Volume today offer good support to this view.

New updates to this analysis are in bold.

Last weekly charts are here and the last video on weekly wave counts is here.

Grand SuperCycle analysis is here.



Gold Elliott Wave Chart Daily 2017
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This daily chart will suffice for both weekly charts.

Upwards movement at primary degree is either a third wave (first weekly chart) to unfold as an impulse, or a Y wave (second weekly chart) to unfold as a zigzag. If upwards movement is a zigzag for primary wave Y, then it would be labelled intermediate waves (A) – (B) and now (C) to unfold.

Intermediate wave (1) or (A) is a complete five wave impulse lasting 39 days. Intermediate wave (2) or (B) looks like an expanded flat, which is a very common structure.

So far, within intermediate wave (3) or (C), the first wave up for minor wave 1 looks complete. Minor wave 2 may unfold lower. Minor wave 2 may not be a very deep correction because the strong upwards pull of a big third wave may force it to be more shallow than otherwise. However, if it is relatively deep, it may find support at the lower edge of the base channel. It should offer another opportunity to join the upwards trend. At this stage, it looks like minor wave 2 is unfolding as yet another common expanded flat correction.

Minor wave 2 may not move beyond the start of minor wave 1 below 1,195.22.


Gold Elliott Wave Chart Hourly 2017
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Minor wave 2 may be any corrective structure except a triangle. At this stage, it looks like it may be unfolding as an expanded flat correction, which are very common structures. Within minor wave 2, minute wave b is now a little longer than the common length of minute wave a, but is less than twice the length of minute wave a.

The target for minute wave C is calculated at two degrees and both yield exactly the same price point. This has a reasonable probability.

Minute wave c must subdivide as a five wave structure, either an impulse or an ending diagonal. An impulse is more common so more likely. At this stage, that looks like what is unfolding.

A base channel is drawn about minuette waves (i) and (ii). Minuette wave (iii) should have the power to break below support at the lower edge of the base channel. Now that the channel is breached the lower edge should offer resistance.

Within the impulse of minute wave c, there may now be three overlapping first and second waves. MACD now indicates downwards momentum is increasing, and it looks likely to increase further.

Gold often exhibits swift strong fifth waves within its impulses, particularly its third wave impulses. Look out for a strong end to one or more of subminuette wave iii or minuette wave (iii).

Minor wave 1 lasted 9 days, 1 longer than a Fibonacci 8. So far minor wave 2 has lasted 5 days. If it continues for 3 more, it may total a Fibonacci 8, and that would give the wave count good proportions and the right look.



Gold Elliott Wave Chart Daily 2017
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This alternate wave count is in response to queries from members.

Fibonacci ratios are noted on both daily charts, so that members may compare the main and alternate wave counts. This alternate wave count has slightly better Fibonacci ratios. This gives this wave count a reasonable probability. Due mostly to volume, this wave count is judged to have a lower probability than the main wave count.

At this stage, this wave count would be considered confirmed if price makes a new low below 1,195.22. At that stage, the target for intermediate wave (2) or (B) to end would be the 0.618 Fibonacci ratio of intermediate wave (1) or (A) at 1,175.

At the hourly chart level, this wave count would see minute wave c of minor wave B as a five wave structure. This would now have a reasonably good fit.



Gold Weekly 2017
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Last week saw price move higher with a small increase in volume. Overall, the rise in price has some support from volume and this supports the main Elliott wave count, which saw it as the end of a first wave up.

On Balance Volume is not close to resistance, so it gives no signal.

ADX has now been pulled right down from extreme. There is now room again for a longer term trend to develop.


Gold Daily 2016
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On Balance Volume is giving a clear bearish signal today. This indicator usually works well with trend lines, and this strongly supports the main Elliott wave count.

Volume today also supports downwards movement, so it is bearish, and this also offers good support to the Elliott wave count.

ADX is a lagging indicator (it is based upon a 14 day average). It does not yet show any trend change from up to down.

It is very reasonable to expect a pullback to continue lower at this stage, so that Stochastics is pulled down from overbought.



GDX Daily 2016
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The bottom line for GDX is that it remains range bound. Volume suggests an upwards breakout is still more likely than downwards, but not by much. While this technique works more often than it fails, it is not certain.

Price is at support today, but Stochastics is only just returning from overbought. A range bound approach to this consolidation may need to be used on a lower time frame. The wisest course of action for GDX at this time may be to wait patiently for a breakout and then join the new trend.

This analysis is published @ 07:57 p.m. EST.