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Upwards movement continues as expected towards the target. A short term target is now provided.

Summary: The short term target is now at 1,264. About here another small consolidation to last about two days may unfold, to be followed by a final small upwards wave that still has its target to be calculated.

Classic technical analysis still offers more support for the main wave count than the alternate.

Always use a stop. Invest only 1-5% of equity 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.

MAIN ELLIOTT WAVE COUNT

WEEKLY CHART

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

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 possible and has the best fit for cycle wave b. It has some support from declining ATR and MACD now beginning to hover about zero.

Within a triangle, one sub-wave should be a more complicated multiple, which may be primary wave C. This is the most common sub-wave of the triangle to subdivide into a multiple.

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.

Triangles normally adhere very well to their trend lines. So far the A-C trend line has been tested 11 times; this line has very strong technical significance. If this wave count is correct, then intermediate wave (B) should find very strong resistance if it gets up to the A-C trend line. A small overshoot is acceptable. A breach is not.

Finally, primary wave E of a contracting or barrier triangle may not move beyond the end of primary wave C above 1,295.65. Primary wave E would most likely fall short of the A-C trend line. But if it does not end there, then it can slightly overshoot that trend line.

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 now be expected to last a Fibonacci 13 or 21 weeks in total.

The gold trend line drawn on prior weekly charts has been removed at the end of this week. The trend line did not offer resistance and was weakened when price closed well above it.

DAILY CHART

Gold Elliott Wave Chart Daily 2017
Click chart to enlarge.

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. At this stage, to try and see the whole of primary wave D complete at this week’s low does not look right. The B-D trend line would be too steep for a normal looking contracting Elliott wave triangle, and primary wave D would have been far too brief at only 5 weeks duration. For the wave count to have the right look and good proportions (as Gold almost always does), primary wave D should not be labelled over yet.

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.

It is possible that only intermediate wave (A) was over at the last low and the current bounce is intermediate wave (B).

Intermediate wave (B) looks to be unfolding as a zigzag, a three wave structure. Corrective waves have a count of 3, 7, 11, 15 etc. Each extension adds another 4. So far intermediate wave (B) has a count of 5 on the daily chart, and so a further 2 is required to total 7. The structure cannot be complete at this stage. This means that another small consolidation lasting about two days should unfold along the way upwards to end intermediate wave (B).

So far intermediate wave (B) has lasted 9 days and the structure is incomplete. The next Fibonacci number in the sequence is 13, which would see intermediate wave (B) end in a further four days.

Within the zigzag of primary wave D, intermediate wave (B) may not move beyond the start of intermediate wave (A) above 1,295.65.

While it is still possible that intermediate wave (B) may end close to the 0.618 Fibonacci ratio of intermediate wave (A) at 1,260, it now looks less likely. The target for minute wave iii calculated at the hourly chart level would see intermediate wave (B) end higher. When minute waves iii and iv are complete, then a new target will be calculated at minor and minute degree for the final high of intermediate wave (B).

HOURLY CHART

Gold Elliott Wave Chart Hourly 2017
Click chart to enlarge.

Upwards movement may be a zigzag for intermediate wave (B). Zigzags subdivide 5-3-5, exactly the same as the start of an impulse.

Minor waves A and B look correct. Minor wave C must be a five wave structure.

Upwards movement for Friday’s session shows an increase in momentum. The Elliott wave count fits with MACD: minute wave iii now has stronger momentum than minute wave i.

Minute wave iii may only subdivide as a simple impulse. Within minute wave iii, minuette wave (iv) may not move into minuette wave (i) price territory below 1,247.33.

Use the best fit channel as a guide to upwards movement and for trading. With price now expected to be nearing the end of a third wave, it may stay within the upper half of the channel. When price moves into the lower half of the channel, then minute wave iii may be over and minute wave iv may be underway. Minute wave iv may find support at the lower edge of the channel. That may provide another entry point to join the upwards trend.

If minute wave iii shows a further increase in upwards momentum, it may break above the upper edge of the channel. If that happens, then the channel may be redrawn.

If this wave count is invalidated by downwards movement below 1,247.33, then it may be possible that intermediate wave (B) could be over.

ALTERNATE ELLIOTT WAVE COUNT

WEEKLY CHART

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

This wave count has been published only in historical analysis. At this stage, it will be published on a daily basis.

There are more than 23 possible corrective structures that B waves may take, and although cycle wave b fits best at this stage as a triangle (main wave count), it may still be another structure. This wave count looks at the possibility that it may be a double zigzag.

If cycle wave b is a double zigzag, then current upwards movement may be part of the second zigzag in the double, labelled primary wave Y.

The biggest problem with this wave count is the structure of intermediate wave (A). This upwards wave looks very much like a three and not a five. This upwards wave must be seen as a five for this wave count to work.

Within the second zigzag of primary wave Y, intermediate wave (B) is a completed regular flat correction. Minor wave C ends just slightly below the end of minor wave A avoiding a truncation. There is no Fibonacci ratio between minor waves A and C.

The target remains the same as previously published for this wave count.

Along the way up, some resistance should be expected at the cyan Magee trend line.

Within intermediate wave (C), no second wave correction may move beyond the start of its first wave below 1,205.41.

DAILY CHART

Gold Elliott Wave Chart Daily 2017
Click chart to enlarge.

Intermediate wave (C) may be unfolding as an impulse. So far minor waves 1 and 2 may be complete. It is common for Gold to exhibit short first waves and very long extended third waves.

When minor wave 3 is complete, then minor wave 4 may not move down into minor wave 1 price territory below 1,225.33.

HOURLY CHART

Gold Elliott Wave Chart Hourly 2017
Click chart to enlarge.

A-B-C of a zigzag subdivides 5-3-5. This is exactly the same as 1-2-3 of an impulse. Both wave counts at the hourly chart level may have the same subdivisions.

The target for minor wave 3 is reasonable given that minor wave 1 was very short. This is not an uncommon Fibonacci ratio for Gold, and it fits with the higher target for minor wave 5 to end primary wave Y.

Minor wave 3 may only subdivide as an impulse. So far only minor waves 1 and 2 may be complete. This wave count now expects to see a further increase in upwards momentum as a third wave at two degrees moves higher. This should also have strong support from volume.

If this wave count is correct, then either or both of minute wave iii and minor wave 3 may end with blow off tops.

Minuette wave (iv) may not move into minuette wave (i) price territory below 1,247.33.

TECHNICAL ANALYSIS

WEEKLY CHART

Gold Weekly 2017
Click chart to enlarge. Chart courtesy of StockCharts.com.

A lack of support for upwards movement from volume favours the main Elliott wave count.

ADX and ATR favour the main Elliott wave count.

DAILY CHART

Gold Daily 2016
Click chart to enlarge. Chart courtesy of StockCharts.com.

In last published analysis volume data provided by StockCharts for the 20th of July was clearly lower than volume four sessions prior for the 14th of July, but today this volume data has been changed: the 20th of July is slightly stronger than the 14th of July.

Volume is slightly bullish. On Balance Volume is looking very bullish. Divergence is still present, but will no longer be given weight at this time as it is not being followed by any downwards movement. On Balance Volume does work better with trend lines than it does with divergence.

If price reaches resistance about 1,260, and Stochastics is overbought at the same time, look out for a downwards reaction there.

Upwards movement may be over when Stochastics is overbought then exhibits divergence with price, or RSI is overbought and price is at resistance at the same time. For now that is not the case, so expect upwards movement to continue.

GDX

DAILY CHART

GDX Daily 2016
Click chart to enlarge. Chart courtesy of StockCharts.com.

The rise for GDX is still looking more clearly weak than the rise for Gold. If Stochastics fully enters overbought and price reaches resistance at the same time, it would be reasonable to expect an end to upwards movement then. That is not the case yet, so expect upwards movement to continue.

Published @ 02:08 a.m. EST on 22nd July, 2017.