Upwards movement was expected. Price moved lower, but has rebounded strongly after the session closed. Downwards movement remained above the invalidation point on the hourly chart.
Summary: Look out for strong upwards movement from both Gold and GDX, which may still happen within the next 24 hours. The target is at 1,333 in the first instance. If this is wrong, it may not be high enough.
A new low below 1,244.72 now would indicate more downwards movement to the original target for this pullback at 1,230.
Trading advice is again given under the classic 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.
MAIN ELLIOTT WAVE COUNT
DAILY CHART
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.
Two wave counts are again provided today at the hourly chart level.
The first hourly wave count expects that minor wave 3 has begun. The alternate looks at the possibility that minor wave 2 will still continue lower.
Minor wave 2 may not move beyond the start of minor wave 1 below 1,195.22.
HOURLY CHART
Click chart to enlarge.
It is possible 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.
Minor wave 3 may only subdivide as an impulse. Gold’s third waves often exhibit swift and strong fifth wave extensions. Minor wave 3 may end with a blowoff top.
Within minor wave 3, minute waves i and ii may now be complete. The middle of a large and strong third wave up should now begin to build momentum.
Minute wave iii may only subdivide as an impulse. Within minute wave iii, minuette wave (i) may be complete. Minuette wave (ii) may yet move a little lower but may not move beyond the start of minuette wave (i) below 1,244.72.
Price remains within the pink base channel drawn about minute waves i and ii. Minute wave iii should have the power to break through resistance at the upper edge of the channel. When it has done that, then upwards momentum may increase strongly. The upper edge of the channel may then provide support.
A target is provided for minor wave 3 to end. No target is provided for minute wave iii because minute wave iv should be expected to be very brief and shallow.
ALTERNATE HOURLY CHART
Click chart to enlarge.
Within minor wave 2, it is possible that only minute wave b is over.
Minute wave b is longer than the common length of up to 1.38 times the length of minute wave a, but still within the allowable convention of up to 2 times the length of minute wave a.
If minute wave b has ended, it would subdivide as a regular flat correction.
Minute wave c may be unfolding as an ending diagonal. The downwards wave labelled minuette wave (i) will not fit well as an impulse, so it may be a zigzag. Within ending diagonals, all subwaves must subdivide as zigzags.
Minuette wave (ii) may not move beyond the start of minuette wave (i) above 1,261.00.
ALTERNATE ELLIOTT WAVE COUNT
DAILY CHART
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.
Minor wave B may not move beyond the start of minor wave A above 1,263.64.
TECHNICAL ANALYSIS
WEEKLY CHART
Click chart to enlarge. Chart courtesy of StockCharts.com.
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 the last 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.
DAILY CHART
Click chart to enlarge. Chart courtesy of StockCharts.com.
Gold remains range bound with resistance about 1,260 and support about 1,240. During this range bound period, it is now today’s downwards day that has strongest volume suggesting now a downwards breakout is more likely than upwards.
However, On Balance Volume has recently broken above the purple line, which offered resistance, giving a reasonable bullish signal. Now On Balance Volume has turned down to test support at this line and it should be expected to hold and halt the fall in price.
There is very strong resistance here for price to overcome. The signal from On Balance Volume will be given reasonable weight in this analysis. It supports the main Elliott wave count.
Trading advice:
Profitable long positions may have stops moved up to breakeven to eliminate risk. The larger trend is still up and corrections offer an opportunity to join the trend. Always use a stop. In this case, it should be at breakeven or preferably just below 1,244.72 now. Do not invest more than 1-5% of equity on any one trade.
More cautious traders may still like to wait for a classic breakout before entering the new trend.
GDX
DAILY CHART
Click chart to enlarge. Chart courtesy of StockCharts.com.
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.
On Balance Volume for GDX also gives a bullish signal. The purple trend line on On Balance Volume is long held, not too steeply sloped, and has been tested five times before. It has good technical significance. This signal should be given reasonable weight. Expect it is now very likely that GDX will break out upwards.
Look out for a strong upwards movement from GDX.
This analysis is published @ 12:20 a.m. EST on 6th April, 2017.
Just noticed that GDX has printed 5 daily green candles in a row. Although price has not skyrocketed upwards yet, every day price closes above its opening. I see that as a good sign.
GDXJ has 7 green candles in a row now… pretty good strength with miners going into tomorrow’s job data.
I’m showing .618 of wave 1 (subminuette) was reached and has been up since, even if it is very slow and not quite moving like I’d expect a iii. Maybe another pattern at lower levels to push out time? NFP tomorrow…
Hourly…
So far a very small inside day. I can’t see the structure of this downwards wave as complete yet, so I’ll be expecting a little more downwards movement.
https://www.investing.com/analysis/nonfarm-payrolls,-trump,-xi:-equities…prepare-for-liftoff-200181445
Nice summary of the importance of tomorrow’s economic data and Trump/ China meeting along with this analyst’s expectations.
Lara, I’m not sure I understand your comments in your first two paragraphs.
My comment was not meant as a criticism of your analysis, just an observation in the hope a third wave will develop.
I didn’t take it as a criticism at all, I took it as a query. That’s all.
It’s all good.
I’m not at home ATM and I’m driving home tomorrow. I have to deal with the remnants of ex tropical cyclone Debbie; flooding and slips on my journey. Will be stopping to work and rest in Tauranga.
Just in case I can’t get through, if analysis is late then that’s why.
Hi Lara,
Sorry to here of your inconvenience, but better out of harms way. Here in Charleston, SC…we have hurricanes.
When you are settled and have an opportunity I would be grateful for a current chart w/wave count for US Dollar and perhaps your short, intermediate take on what is going on.
There has been a H&S pattern that began forming in Oct 2016 and is possibly headed towards completion. Of course these patterns do not always come to fruition.
Thank you…
The road I need to travel on is now open today, but reduced to one lane in parts so it’s going to be slow going.
A town near to me, Edgecumbe, has been evacuated as it’s completely flooded.
We get the tail ends of tropical cyclones down here, the equivalent of your hurricanes. I think they’re differently named for each hemisphere because they have different directions of rotation.
I have two counts for USD index, and I’ve kinda been waiting for some clarity before publishing. I’ll just publish them both over the weekend.
this is a slow and worrying start to what should be a third wave in multiple degrees!
It’s minuette 2. Stronger and faster will come in minuette 3.
Glad that it’s slow. Market isn’t open yet!
My guess is that minuette 2 will finish up at 8:30 am tomorrow morning being that it’s always the important job numbers release. https://www.bloomberg.com/markets/economic-calendar
A poor number will benefit gold simply because the expected rate hikes may need to be re-evaluated. This would also weaken the US dollar.
However, a strong number and gold could drop.
Once Lara kindly explained “4 degrees” yesterday, I jumped in and made my purchase; JNUG at 7.00.
In the world of probabilities, it sounds like the alternate wave count is carrying a lower percentage but what do you think this might be… 30%?
Go back and look at 10th of April 2013. Look at On Balance Volume, did it give any signals then? What direction was volume strongest in for recent movement? Did ADX look clear or not, and was it extreme? Were Bollinger Bands widening or steady?
Don’t look at what happened next. Only consider, what would you expect to happen next. If someone had told you there was a big third wave in the wings, would you have doubted it?
Now, I may certainly be wrong here today. I’ve been wrong before and I’ll be wrong again. And that is exactly why I offer risk management advice.
I’m reminded of this analysis when I was told, insistently, that the third wave was over and I must be wrong.
Thanks for providing link to 10Apr 2013 analysis. This is classic. When gold dropped below 1530 all gold bugs blamed manipulation by Bankers.
This being an important analysis for historic gold drop I suggest it to be moved to Gold Historic cat for easy access.
Thanks for excellent analysis.
Hi Lara – that candle on gold looks incorrect to account for the full trading day, as we know gold ended up over 1250. It looks like a candle that accounts for only the action before the pit close, or something close to that. I had mentioned in a post a few days ago, that seems to happen with $gold on stockcharts lately
Yes, I know. And I’ll bet that tomorrow it will look different 🙁