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Upwards movement has continued as the main Elliott wave count expected.

Summary: A bounce or a sideways consolidation has begun within the larger downwards trend. With On Balance Volume at resistance, price at resistance, and weak volume for Friday, look out for a downwards reaction on Monday.

This correction for intermediate wave (B) may be a choppy sideways movement. It may not present a good trading opportunity. More experienced members may like to use a range bound trading approach at this time for short term scalps. Less experienced members should stand aside and wait patiently for it to end before re-entering the trend.

Always use a stop on every trade. Do not invest more than 1-3% of equity at this time on any one trade.

New updates to this analysis are in bold.

Last monthly charts and alternate weekly charts are here, video is here.

Grand SuperCycle analysis is here.


Gold Elliott Wave Chart Weekly I 2017
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The Magee bear market trend line is added to the weekly charts. This cyan line is drawn from the all time high for Gold on the 6th of September, 2011, to the first major swing high within the following bear market on the 5th of October, 2012. This line should provide strong resistance.

At this stage, a triangle still looks most likely and has the best fit for cycle wave b.

Within a triangle, one sub-wave should be a more complicated multiple, which may be primary wave C. Primary wave C may not move beyond the end of primary wave A above 1,374.91. This invalidation point is black and white.

At this stage, it looks like primary wave C is now complete at the hourly and daily chart level. However, at the weekly chart level, it looks possible it may continue higher. This possibility must be acknowledged while price remains above 1,214.81. Within intermediate wave (Y), minor wave B may not move beyond the start of minor wave A.

Primary wave D of a contracting triangle may not move beyond the end of primary wave B below 1,123.08. Contracting triangles are the most common variety.

Primary wave D of a barrier triangle should end about the same level as primary wave B at 1,123.08, so that the B-D trend line remains essentially flat. This involves some subjectivity; price may move slightly below 1,123.08 and the triangle wave count may remain valid. This is the only Elliott wave rule which is not black and white.

Primary wave C may end when price comes up to touch the Magee trend line.

There are three alternate wave counts that have been published in the last historic analysis, which is linked to above. They are all very bullish. Members may like to review them at this stage. They will only be published on a daily basis if price shows them to be true with a new high now above 1,295.65.


Gold Elliott Wave Chart Daily 2017
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Intermediate wave (Y) may now be a complete zigzag if it is accepted that a triangle completed in the position labelled minor wave B. This has a perfect fit on the hourly chart.

A new low below 1,214.81 could not be minor wave B within intermediate wave (Y) and would provide strong confirmation that intermediate wave (Y) is over.

A common range for triangle sub-waves is from about 0.8 to 0.85 the prior sub-wave, this gives a range for primary wave D from 1,158 to 1,149.

If primary wave C is correctly labelled as a double zigzag, then primary wave D must be a simple A-B-C structure and would most likely be a zigzag. Within primary wave D, minor wave B may not move beyond the start of minor wave A above 1,295.64.

With a clear breach of the Elliott channel today at the hourly chart level, and a strong overshoot at the daily chart level, it looks very much like intermediate wave (A) is over. If intermediate wave (A) is over, then it would have lasted 10 days (not a Fibonacci number). For the wave count to have the right look intermediate wave (B) may be at least even in duration with intermediate wave (A).

Intermediate wave (B) may be any one of more than 23 possible corrective structures. It may be a swift sharp zigzag with a strong upwards slope, or it may be a shallow sideways complicated combination, triangle or flat. It is impossible until it is almost complete to know with confidence what structure it has taken. B waves exhibit the greatest variety in price behaviour and structure, so they do not present good trading opportunities.

Only the most experienced of traders should attempt to trade B waves, even at intermediate degree. If members choose to attempt to trade intermediate wave (B) upwards, it is my strong advice to reduce risk to only 1-3% of equity. It is essential that stops are always used.

Primary wave A lasted 31 weeks, primary wave B lasted 23 weeks, and primary wave C may have been complete in 25 weeks.

Primary wave D should be expected to last at least 8 weeks (but most likely longer). The next Fibonacci ratio in the sequence would be a Fibonacci 13 and then 21.


Gold Elliott Wave Chart Hourly 2017
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The strong breach of the Elliott channel at the hourly chart level is a strong indication of a trend change.

If intermediate wave (A) is complete, then a new wave up at intermediate degree should start with a five wave structure upwards on the hourly chart. This is incomplete. It may be unfolding as a leading expanding diagonal.

Because the diagonal is expanding, minute wave v must be longer than minute wave iii. At 1,260.16 minute wave v would reach equality in length with minute wave iii; minute wave v must end above this point.

When minor wave A is complete, if it is a five, then minor wave B may not move beyond its start below 1,241.33.

The first five up may also be moved down one degree; this may be only minute wave i of minor wave A. If it is minute wave i, then minute wave ii may not move beyond its start below 1,241.33.


Gold Elliott Wave Chart Hourly 2017
Click chart to enlarge.

Because intermediate wave (B) may be any one of more than 23 possible structures, it is necessary to consider alternate wave counts as it unfolds.

Minor wave A may be a complete double zigzag. When A waves subdivide as threes, then the larger correction is either a flat or triangle. Within flats and triangles, B waves may make new price extremes beyond the start of A waves as in expanded flats and running triangles. Minor wave B may make a new low below 1,241.33.

The minimum requirement of 0.9 the length of minor wave A at 1,243.07 is for a flat correction.

If intermediate wave B is unfolding as a triangle, there is no minimum requirement for minor wave B.



Gold Weekly 2017
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The long lower wick of the last weekly candlestick is bullish. This puts the short term trend from down to neutral.

Lighter volume for the last week does not support the fall in price. In conjunction with the longer lower wick and doji candlestick, a bounce here looks like a very real possibility.

Declining ATR for a long time fits neatly with the expectation of a large triangle unfolding.


Gold Daily 2016
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Long upper wicks on the last two daily candlesticks indicate weakness in upwards movement. Look out for a downwards reaction from resistance here, about 1,260. A lack of volume for Friday’s session also suggests a downwards reaction short term. On Balance Volume supports this view.



GDX Daily 2016
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GDX looks more clearly bullish than Gold.

If the gap up is a breakaway gap from a small consolidation, then the lower edge of the gap should offer support. Breakaway gaps are not usually closed.

While GDX still looks more clearly bullish than Gold for the short term, upwards movement has small range and overall lighter volume than the prior downwards movement. This looks like a counter trend movement that is not yet done.

This analysis is published @ 11:02 p.m. EST.