Select Page

A downwards day, which was expected as most likely, followed the blow off top.

Summary: It may be slightly more likely that price may move sideways and slowly higher towards 1,276 (the target may be too high). Alternatively, a high may be in place now and this would be confirmed with a new low below 1,214.81.

New updates to this analysis are in bold.

Last historic analysis with monthly charts is here, video is here.

Grand SuperCycle analysis is here.


For clarity I have decided at this time it may be best to publish on a daily basis weekly charts I and II. Both charts expect a zigzag down to complete and the difference is in the expected depth.


Gold Elliott Wave Chart Weekly I 2017
Click chart to enlarge.

Combinations are very common structures. Cycle degree waves normally last one to several years, and B waves do tend to be more time consuming waves than all other waves. Given these tendencies the most likely scenario at this point may be that cycle wave b is an incomplete double combination.

The first structure in the double labelled primary wave W fits as a zigzag. This upwards movement will subdivide as either a three (zigzag) or a five (impulse). It does have a three wave look to it.

The double is joined by a deep three in the opposite direction labelled primary wave X, which is a 0.77 depth of primary wave W. X waves within double combinations are normally very deep; this one looks right.

The second structure in the combination may be either a triangle or a flat correction. Both of these structures have A waves which subdivide as threes.

At this stage, the upwards wave from the low in December 2016 does now look best and subdivide best as a completed zigzag. This may be intermediate wave (A) of a flat correction or a triangle. Because a triangle for primary wave Y would look essentially the same as the second weekly chart below, only a flat correction is considered here. The most common two structures in a double combination are a zigzag and a flat.

This wave count follows the most common scenario and has the best fit.

Within the flat correction of primary wave Y, intermediate wave (B) must retrace a minimum 0.9 length of intermediate wave (A) at 1,140.27. The most common length for intermediate wave (B) is from 1 to 1.38 times the length of intermediate wave (A), giving a common range from 1,123.08 to 1,057.77.

Intermediate wave (B) may subdivide as any corrective structure, but the most common structure for B waves within flats is a zigzag. At this stage, on the hourly chart it looks like a five down is now complete, which would indicate intermediate wave (B) is a zigzag subdividing 5-3-5.

The daily and hourly charts will follow this weekly chart. That does not mean the other two weekly charts aren’t possible, they are, but the number of charts must be kept reasonable on a daily basis.


Gold Elliott Wave Chart Weekly II 2017
Click chart to enlarge.

What if cycle wave b is a triangle? This is also entirely possible. Triangles are not as common as double combinations, but they are not uncommon.

Within the triangle, primary waves A, B and C are all single zigzags. One of the five subwaves of a triangle normally subdivides as a more complicated multiple, usually a double zigzag. This may be what is unfolding for primary wave D.

Primary wave D of a regular contracting triangle may not move beyond the end of primary wave B below 1,123.08.

Primary wave D of a regular barrier triangle should end about the same level as primary wave B at 1,123.08, so that the B-D trend line is essentially flat. What this means in practice is that primary wave D may end slightly below 1,123.08 and the triangle would remain valid. This is the only Elliott wave rule which is not black and white.

Thereafter, primary wave E should unfold upwards and would most likely fall a little short of the A-C trend line. If not ending there, it may overshoot the A-C trend line.

At this stage, the structure on the hourly chart is still the same for both this weekly wave count and the first weekly wave count: a zigzag downwards is unfolding. However, they now diverge in how far down the next wave is expected to go. This second weekly wave count expects a more shallow movement to not end reasonably below 1,123.08.


Gold Elliott Wave Chart Daily 2017
Click chart to enlarge.

This daily chart will suffice for both weekly charts above, although the labelling follows weekly chart I.

Both weekly charts expect a zigzag downwards. Weekly chart I expects a deep zigzag for intermediate wave (B) to a minimum at 1,140.27. Weekly chart II expects a zigzag down for primary wave D to not move below 1,123.08 and most likely fall well short of that point.

The daily chart follows the expectations for weekly chart I, but the structure for weekly chart II would be exactly the same.

Within the flat correction of primary wave Y, intermediate wave (B) must retrace a minimum 0.9 length of intermediate wave (A) at 1,140.27. The most likely corrective structures to achieve the deep correction required for B waves within flats are single or multiple zigzags. These begin with a five, then a three in the opposite direction.

Minor wave A is complete. Minor wave B may be an incomplete zigzag. Volume remains heavy, price remains within a best fit channel, and the candlestick for the 18th of May closed with a long lower wick (StockCharts data). This looks slightly more like minor wave B is incomplete than not.

Minor wave B may not move beyond the start of minor wave A above 1,294.96.


Gold Elliott Wave Chart Hourly 2017
Click chart to enlarge.

It is my judgement after some consideration that the hourly wave counts should be swapped over.

Minor wave B may be incomplete.

After blow off tops, price usually immediately reverses to retrace some or all of the blow off top. That happened today. It then very often moves sideways and makes new highs a few days after the blow off top, before a final trend change.

The proportion of minute wave b is much better here than the alternate below. Minute wave b is an expanded flat correction.

If the target is wrong, it may be too high. Minute wave c may not exhibit a Fibonacci ratio to minute wave a.

Minute wave b may yet move further sideways to take up more time. It may not move beyond the start of minute wave a below 1,214.81.

I would judge this main wave count to have about a 55% probability.


Gold Elliott Wave Chart Hourly 2017
Click chart to enlarge.

This alternate wave count may have a slightly lower probability than the main wave count.

If minor wave B is over, then within it minute wave b was a very quick zigzag. This is acceptable, but it doesn’t have quite as good a look as the larger minute wave b on the main hourly chart.

Within minor wave C, minute wave ii may not move beyond the start of minute wave i above 1,264.72.

I would judge this alternate wave count to have about a 45% probability.


Gold Elliott Wave Chart Weekly II 2017
Click chart to enlarge.

What if the bull market beginning in December 2015 remains intact? Price has essentially been moving sideways since that date, so all possibilities should be considered.

A possible Morning Doji Star reversal pattern at the low labelled intermediate wave (B) would support this wave count.

This wave count requires confirmation above 1,294.96. That would invalidate the first three weekly charts (the third is seen in historic analysis only).

It is possible that cycle wave b is continuing higher as a double zigzag. However, double zigzags normally have brief and shallow X waves. The purpose of the second zigzag in a double (and the third when there is one) is to deepen the correction when price does not move deep enough in the first (or second) zigzag. Thus double (and triple) zigzags normally have a strong and clear slope against the prior trend. To achieve this look their X waves normally are brief and shallow.

In this case, primary wave X is neither brief nor shallow. It is a 0.77 depth of primary wave W and lasted 0.74 the duration of primary wave W. Overall, this does not have a typical look of a double zigzag so far.

This wave count also must see the rise up to the high labelled intermediate wave (A) as a five wave impulse, not a three wave zigzag. This looks a little forced, so it reduces the probability of this wave count.

This wave count should only be used if confirmed with a new high above 1,294.96. Low probability does not mean no probability, but should always be given less weight until proven.



Gold Weekly 2017
Click chart to enlarge. Chart courtesy of

Another downwards week closes green with a small real body. This is a spinning top candlestick that shifts the trend from down to neutral.

The balance of volume is upwards and shows a decline. Upwards movement may be a counter trend movement if it does not have support from volume.

The bullish signal from On Balance Volume suggests this week may see upwards movement.


Gold Daily 2016
Click chart to enlarge. Chart courtesy of

The blow off top has been followed by an upwards day, which made a slightly higher high and a higher low but closed red and has the balance of volume downwards. There was strong support for downwards movement during the session from heavy volume. This is bearish.

The long lower wick on this daily candlestick is bullish.

After a blow off top, price either moves sideways for a few days then trends slightly higher before a trend change, or sometimes the blow off top occurs at the final high.

The bearish divergence between On Balance Volume and price is slight. It may signal a reversal here, but divergence can develop further before price turns.

Bollinger Bands clearly contracting as price moves higher indicates this movement is more likely a counter trend movement. Normally, during a trend, Bollinger Bands expand then contract as price consolidates.



GDX Daily 2016
Click chart to enlarge. Chart courtesy of

The Evening Star candlestick pattern is supported by heavier volume on the last candlestick. This supports the idea of a high in place now for GDX.

Bollinger Bands expand when markets trend and contract when they consolidate. With the bands contracting as price has moved higher, it looks like this is a counter trend movement. It may now be over.

This analysis is published @ 12:35 a.m. EST on 19th May, 2017.