Select Page

Downwards movement was expected to continue. Overall, Friday’s session did move price lower with a lower low and a lower high, but the session closed green with a strong upwards push. This was not expected.

Members are offered some trading strategies for how to approach this market early next week.

Summary: The correction may be complete; confidence may be had if price makes a new high above 1,253.21. The short term target is now at 1,333 and a longer term target is initially at 1,392. There is a possibility still though that the pullback is not yet done and price may still move lower to the target at 1,230. Trading advice on how to approach this market next week is given under the classic technical analysis section.

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
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.

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.

There are two hourly Elliott wave counts to end the week. It is possible that minor wave 2 is complete as an expanded flat correction, with minute wave c moving only just very slightly below the end of minute wave a at 1,241.03 to avoid a truncation. Minor wave 2 would have lasted only six days and may be a relatively brief shallow correction. This is entirely possible now; the strong pull upwards from intermediate wave (3) within primary wave 3 may force surprises to the upside.

The alternate below looks at the possibility that minor wave 2 is not over and may yet move lower to reach the target, which we had this week at 1,230.

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


Gold Elliott Wave Chart Hourly 2017
Click chart to enlarge.

It is possible today that minor wave 2 is over as a completed expanded flat correction. Minute wave c would be 1.51 longer than 1.618 the length of minute wave a. Minute wave c ends slightly below minute wave a, so a truncation is avoided.

The Elliott channel for this first wave count is drawn using the first technique. The clear and strong breach at the end of the session suggests the downwards wave is over and the next wave up is underway.

The last downwards wave here labelled minuette wave (v) will fit neatly as an ending expanding diagonal on the five minute chart.

Upwards movement at the end of the session subdivides neatly as a five wave structure.

Minute wave ii may offer a good entry point to join a strong upwards trend. It may end with a little more downwards movement close to the 0.382 Fibonacci ratio.

A new high above 1,253.21 would invalidate the alternate hourly chart below and provide some reasonable confidence in this main wave count.


Gold Elliott Wave Chart Hourly 2017
Click chart to enlarge.

Alternatively, it is possible that the strong upwards movement at the end of Friday’s session is minuette wave (iv). Fourth waves are not always neatly contained within the Elliott channel, which is why Elliott developed a second technique to redraw the channel when the fourth wave breached it. This channel is redrawn.

The last downwards wave labelled here subminuette wave b may fit as a double zigzag on the five minute chart.

Minuette wave (iv) may not move into minuette wave (i) price territory.

Minuette wave (iv) is technically a regular flat correction, because within it subminuette wave b is a 1.02 length to subminuette wave a. Subminuette wave c is much longer than C waves within regular flats are, so this correction does not have the right look. Normally, regular flats have C waves that are close to even in length with their A waves, and they normally fit within a small channel.



Gold Elliott Wave Chart Daily 2017
Click chart to enlarge.

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
Click chart to enlarge. Chart courtesy of

The small real body and long upper wick for the third weekly candlestick completes a stalled candlestick pattern. “It indicates bulls strength has been at least temporarily exhausted. A stalled candlestick pattern should be used to liquidate or protect longs, but usually not to short. It is generally more consequential at higher price levels.” (Nison, “Japanese Candlestick Charting Techniques”, page 100).

Lighter volume for this upwards week is also concerning for bulls.

On Balance Volume is very close to resistance, but not quite there yet.

This weekly chart offers slightly more support to the alternate hourly Elliott wave count than the main hourly Elliott wave count.


Gold Daily 2016
Click chart to enlarge. Chart courtesy of

Friday completed a downwards day with a lower low and a lower high, but the candlestick closed green and the balance of volume during the session was upwards.

The longer lower wick and green colour of this candlestick is bullish. However, the decline in volume does not support upwards movement during the session, so this is bearish.

On Balance Volume is very close to resistance at the daily chart level as well as the weekly chart level. This should be taken as a bearish warning; there is strong resistance here for bulls to overcome.

RSI is not overbought, so there is room for price to rise. Stochastics is overbought, but this may remain extreme for reasonable periods of time during a strong trend from Gold. Members may like to look back at how price and Stochastics behaved from the 27th of January to the 11th of February, 2016: a powerful third wave within a third wave moved price higher while Stochastics remained overbought for the entire movement.

The bottom line is: look out for a possible strong upwards movement, but only have confidence that it has begun if price moves above 1,253.21 and / or On Balance Volume breaks above resistance.

There are a few possible approaches to trading this market next week.

More cautious and inexperienced members may like to wait patiently for clarity. An order may be set to open a long position if price makes a new high above 1,253.21. Or if members are able to watch the market, enter on a small correction after that price point is passed.

Another approach may be to open a hedge. The long position must have a stop just below 1,240.24 with a profit target at either 1,333 or 1,392. The short position must have a stop just above 1,253.21 and a profit target at 1,230. As soon as price breaks out of this zone, the losing position should be automatically closed and the winning position held with a good entry point.



GDX Daily 2016
Click chart to enlarge. Chart courtesy of

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.

This analysis is published @ 09:10 p.m. EST on 1st April, 2017.