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A small correction was expected to move sideways and end within 24 hours. Downwards movement still fits the Elliott wave count (although deeper than expected) and price remains above the invalidation point on the hourly chart.

Summary: While price remains above 1,244.28, it is possible that this bounce may be close to completion. The target is now at 1,265.

If price makes a new low below 1,244.28 within the next 24 hours, then expect this small pullback within the mid term upwards trend is not over. Targets are at 1,238 or 1,226. Volume favours the view that this pullback is not quite over yet.

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.



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 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.


Gold Elliott Wave Chart Daily 2017
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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 last 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 6 on the daily chart, and so a further 1 is required to total 7. To see it over at the last high would have a count of 5, which is impulsive and not corrective. A final wave upwards is required for the count to look right at the daily chart level now.

So far intermediate wave (B) has lasted 11 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 two 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. 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).


Gold Elliott Wave Chart Hourly 2017
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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.

With price now moving below the lower edge of the best fit channel in last analysis, the channel is now redrawn. Sometimes fourth waves are not neatly contained within channels, which is why Elliott developed a second technique to redraw the channel when the fourth wave breaches it. At this stage, the breach of this Elliott channel is small and it will be left as is for now. If the breach gets bigger, then the channel may need to be redrawn again using the second technique.

There is now perfect alternation between the shallow flat of minute wave ii and the deep zigzag of minute wave iv.

Because minute wave iii is shorter than minute wave i, minute wave v is limited to no longer than equality in length with minute wave iii, so that minute wave iii is not the shortest and this core Elliott wave rule is met.

Fifth waves most commonly exhibit Fibonacci ratios to their first waves. The target assumes minute wave v will exhibit a Fibonacci ratio to minute wave i.

Minute wave v may end mid way within the channel.

Minute wave iv may not move into minute wave i price territory below 1,244.28.

If this first hourly wave count is invalidated, use the second count below.


Gold Elliott Wave Chart Hourly 2017
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There is a five up complete now at the daily chart level. This may be only minor wave A within intermediate wave (B).

If minor wave A has subdivided as a five wave impulse, then minor wave B may not move beyond its start below 1,205.31. If minor wave A is a five wave structure, then the larger correction for intermediate wave (B) is indicated as a zigzag and the structure should be incomplete.

Minor wave B may be any one of more than 23 possible corrective structures. At this stage, it looks like it may be unfolding as a double zigzag. But if this wave count is correct, then the labelling within minor wave B may change. If it continues as a flat or running triangle, then it may include a new high above its start at 1,258.59.

B waves exhibit the greatest variety in structure and price behaviour. B waves within B waves are the absolute worst trading opportunities. They are best avoided. If this wave count proves to be correct, then the focus over the next day to few will be on identifying when minor wave B may be complete and not on trying to predict the whipsaws within it.

Both the 0.382 and 0.618 Fibonacci ratios of minor wave A are equally likely targets for minor wave B.

If the first hourly wave count is invalidated with a new low below 1,244.28, then this second wave count would be the new main wave count.

Minor wave B may last anywhere from one to a few days. It may be a swift sharp zigzag or multiple zigzag down, or it may be a time consuming complicated combination or triangle lasting a few days.



Gold Elliott Wave Chart Weekly I 2017
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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.


Gold Elliott Wave Chart Daily 2017
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Intermediate wave (C) may be unfolding as an impulse.

With a five up now complete and downwards movement breaking below the lower edge of the pink Elliott channel, it looks like at the daily chart level minor wave 1 may have ended at the last high and downwards movement may be a correction to follow it for minor wave 2.

Minor wave 2 may not move beyond the start of minor wave 1 below 1,205.41.


Gold Elliott Wave Chart Hourly 2017
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Subdivisions for this alternate hourly chart are the same as the second hourly chart for the main wave count. A-B-C of a zigzag subdivides exactly the same as 1-2-3 of an impulse.

If minor wave 1 was over as a five wave impulse at the last high, then downwards movement may be minor wave 2. The most likely point for it to end would be the 0.618 Fibonacci ratio of minor wave 1 about 1,226.

Minor wave 2 would most likely subdivide as a single or multiple zigzag. A movement at minor degree should begin with a five down at the hourly chart level, which at this stage is incomplete.



Gold Weekly 2017
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A lack of support for upwards movement from volume favours the main Elliott wave count.

ADX and ATR favour the main Elliott wave count.


Gold Daily 2016
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Two small range days look so far like a correction within this upwards bounce and not yet the start of a new downwards trend. There is no candlestick reversal pattern at the last high.

An increase in volume today indicates this pullback is less likely to be over; another red daily candlestick looks most likely here. This fits the second hourly chart for the main wave count, and also fits the alternate wave count.

ATR and Bollinger Bands still support the main Elliott wave count.



GDX Daily 2016
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GDX also looks bearish for the short term.

Be aware that the correlation between GDX and Gold is unreliable. Although they are currently strongly positively correlated, their past behaviour absolutely shows that this correlation does not necessarily have to persist. In fact, we should assume that it may not and the correlation may be broken any day.

Published @ 11:33 p.m. EST.