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Yesterday’s analysis expected the correction to continue sideways for another day.

A small downwards day mostly fits the expectation and price remains well above the invalidation point on the hourly chart.

Summary: The correction is still most likely incomplete. It may continue further for yet another one to few days. Thereafter, the upwards trend should resume. The target for long positions remains at this stage at 1,333. If this is wrong, it may not be high enough.

New updates to this analysis are in bold.

Grand SuperCycle analysis is here.

Last monthly and weekly charts are here.



Gold Elliott Wave Chart Daily 2017
Click chart to enlarge.

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. It is most likely a third wave because cycle wave a is most likely to subdivide as an impulse.

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), minor waves 1 and 2 are now complete. Minor wave 3 looks to have begun. Within minor wave 3, the middle portion for minute wave iii may now be complete. Minute wave iv may not move into minute wave i price territory below 1,261.00.

Minute wave v is expected to be very strong, possibly ending with a blow off top.

A cyan trend line is added to all charts. Draw it from the high in October 2012 to the high in July 2016. This line has been tested five times. Price is finding resistance at the cyan trend line now. If price can break through resistance here after some consolidation, then that may release energy to the upside for the end of minor wave 3.


Gold Elliott Wave Chart Daily 2017
Click chart to enlarge.

This chart steps back to see all movement since the important low on the 3rd of December, 2015.

To see how this fits into the bigger picture, please see the last historic analysis linked to at the start of this analysis.

The first upwards movement labelled primary wave 1 fits well as a five wave impulse. Primary wave 2 fits as a zigzag. It would be difficult to see the downwards wave of primary wave 2 as an impulse because that would require ignoring what looks very much like a triangle at its start (labelled intermediate wave (B) ). To see this as an impulse that movement would need to be a second wave correction, but second waves do not subdivide as triangles.

Primary wave 3 should have begun. Within it intermediate waves (1) and (2) should be complete. Intermediate wave (2) is a very common expanded flat correction.

My only concern at this stage is the labelling of minute wave iii as complete. It is possible that the middle portion of this third wave at three degrees has passed, if the next waves up for minute wave v and minor wave 5 are both very long and strong extensions.

It may also be possible that the middle of the big third wave has not passed and the degree of labelling within minor wave 3 needs to be moved down one degree. If minute wave ii is yet to unfold, it may not move beyond the start of minute wave i below 1,240.24.


Gold Elliott Wave Chart Hourly 2017
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Minute wave ii was a deep 0.79 double zigzag, which lasted 25 hours, and on the daily chart it shows as only one session.

Given the guideline of alternation, minute wave iv may be expected to most likely be a flat, combination or triangle. All of these structures may include a new high above its start at 1,294.96 as part of the correction. A new high does not indicate minute wave iv is over.

Combinations, flats and triangles are all usually more longer lasting structures than zigzags.

At this stage, a flat correction for minute wave iv may be ruled out because there is no upwards wave within it that has retraced a minimum 0.9 length of any downwards wave within it. The minimum length for minuette wave (b) within a flat correction for minute wave iv has not been met.

That leaves two possibilities. This first hourly chart looks at a possible combination for minute wave iv.

If minute wave iv is a combination, then the first structure within it labelled minuette wave (w) may be a complete zigzag.

The two structures in the double may be joined by a complete three in the opposite direction labelled minuette wave (x), which subdivides as an expanded flat correction.

Minuette wave (y) may have begun. It may be either a flat or a triangle. If it is a triangle, then it may continue to find support at the lower pink trend line.

The Elliott channel is drawn using Elliott’s first technique. A parallel copy is added and pulled down to sit on the end of minuette wave (ii) within minute wave iii, so that all of this upwards movement is contained. This lower edge may be where downwards movement now finds some support.

Fourth waves are not always neatly contained within Elliott channels, which is why Elliott developed a second technique to redrawn the channel when a fourth wave breaches it. A breach of this lower trend line now would not mean this wave count is invalid, only that the fourth wave is continuing.

Minute wave iv may not move into minute wave i price territory below 1,261.00.


Gold Elliott Wave Chart Hourly 2017
Click chart to enlarge.

This second hourly chart looks at the possibility that minute wave iv is completing as a contracting triangle. If this idea is correct, then it may continue to find support at the lower pink trend line.

Within the triangle, minuette wave (b) may make a new high above the start of minuette wave (a) at 1,294.96 if minute wave iv unfolds as a running triangle. 40% of triangles will do this.

Within the triangle, minuette wave (c) may not move beyond the end of minuette wave (a) below 1,276.96. At this stage, the triangle would be invalidated by a new low below this point.

This idea may see minute wave iv continue for another few days. Triangles can be very time consuming structures. Their purpose is to take up time, move price sideways, and provide endless frustration and confusion for traders.

If minute wave iv unfolds as a triangle, then the next wave up for minute wave v may be surprisingly short and brief. Gold often exhibits short and brief fifth waves out of its fourth wave triangles. There is a good example of this on the Daily Detail chart above; see the wave labelled minute wave v (ending on 4th March, 2016) of minor wave 3 of intermediate wave (3). This fifth wave lasted only two days and was less then the widest part of the triangle that preceded it.

If minute wave iv is a triangle and minute wave v is short and brief, then the blow off top may then be expected for minor wave 5 to end intermediate wave (3), and / or the end of intermediate wave (5) to end primary wave 3.



Gold Weekly 2017
Click chart to enlarge. Chart courtesy of

The relatively long upper wicks of the last two weekly candlesticks are a little bearish. The increase in volume last week is bullish.

The purple trend line on On Balance Volume has been carefully drawn to be as conservative as possible, sitting along the prior two highs. This trend line has a very shallow slope and is reasonably long held. It has only been tested twice before. It has some reasonable technical significance. Last week it is slightly breached offering a reasonable bullish signal. However, for the signal to have more weight it needs a clearer breach.


Gold Daily 2016
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I do not have confidence in the data from StockCharts for the daily candlestick for the 12th of April. As the session ended, I did not see a spike down to 1,278, which is their close, and creates the long upper wick on their candlestick.

Yesterday completed a day with the balance of volume upwards, and volume showed an increase. This is bullish. Now today completes a day with the balance of volume downwards, showing a decline. The downwards movement during Wednesday’s session did not have support from volume, so at this stage it looks more likely to be a small pullback within a continuing upwards trend.

The long lower wicks on the last two daily candlesticks are bullish. Volume is bullish. On Balance Volume is very bullish. ADX is still bullish. Bollinger Bands are bullish.

RSI coming down from overbought means there is again plenty of room for price to rise. This is good to see for the bullish scenario.

Stochastics may remain extreme for long periods of time when Gold has a strong trend. Only when it has been extreme for a while and then exhibits clear divergence with price (preferably multiple) is it a strong warning. That is not the case yet.

This chart overall remains bullish. The larger trend remains up. Corrections are an opportunity to join the trend or to add to long positions.


I have left my stop on my long position at 1,270.89. If price comes down again to the lower trend line, it may present another opportunity to add to long positions. Stops for new long positions may also be set at 1,270.89, but there is a risk here that a whipsaw may close out longs only to see price move higher. Alternatively, set stops just below 1,261 for new long positions here, and reduce position size to keep risk from 1-5% of equity.

Profit targets may be set at 1,333 in the first instance.

As always, risk management is the single most important aspect of trading. Take it seriously. My two Golden Rules are:

1. Always use a stop.

2. Invest only 1-5% of equity on any one trade.



GDX Daily 2016
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The prior gap labelled a breakaway gap in yesterday’s analysis is now closed. This means it is not a breakaway gap.

Price has closed back within prior consolidation. The upwards breakout is now proven to be false. While this was not expected, sometimes it does happen. The probability was low but not zero.

There is some distance to go before On Balance Volume finds support and price finds support. There is room here for more downwards movement. Support is about 22.50 again.


Gold Daily 2016
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This study of a third wave will be left in daily analysis until the current third wave is either proven to be wrong (invalidated) or it is complete.

This third wave spans 59 trading days.

It was not until the 40th day that the overlapping ended and the third wave took off strongly.

The middle of the third wave is the end of minute wave iii, which ended in a blow off top.

There is excellent alternation between second and fourth wave corrections.

This third wave began with a series of five overlapping first and second waves (if the hourly chart were to be added, it would be seven) before momentum really builds and the overlapping ends.

The fifth wave of minuette wave (v) is the strongest portion.

This third wave curves upwards. This is typical of Gold’s strong impulses. They begin slowly, accelerate towards the middle, and explode at the end. They do not fit neatly into channels. In this instance, the gold coloured curve was used.

Gold Daily 2016
Click chart to enlarge. Chart courtesy of

This trend began after a long consolidation period of which the upper edge is bound by the blue trend line. After the breakout above the blue trend line, price curved back down to test support at the line before moving up and away.

RSI reaches overbought while price continues higher for another five days and RSI reaches above 85. The point in time where RSI reaches overbought is prior to the strongest upwards movement.

ADX reached above 35 on the 9th of February, but price continued higher for another two days.

The lesson to be learned here: look for RSI to be extreme and ADX to be extreme at the same time, then look for a blow off top. Only then expect that the middle of a big third wave is most likely over.

The end of this big third wave only came after the blow off top was followed by shallow consolidation, and more highs. At its end RSI exhibited strong divergence with price and On Balance Volume gave a bearish signal.

Third waves require patience at their start and patience at their ends.

This analysis is published @ 08:06 p.m. EST.