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Upwards movement was unexpected and has invalidated the Elliott wave count at the hourly chart level.

Summary: The target is at 1,279, but it may be a little too low. If price moves above the target, look for resistance at the maroon trend line on the main daily chart. If that line is touched again, it may be offering another entry opportunity to join the next swing down.

Stops for any short positions should be set a reasonable amount above the maroon trend line (allow for overshoots), and just above 1,295.65 at maximum.

Members unsure of this analysis after today’s invalidation may like to open a long hedge to any short positions, with stops just below 1,252.39 at maximum.

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) may have ended just short of this trend line, finding strong resistance just below it.

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. It has now lasted 8 weeks, so a further 5 weeks minimum would now be expected.

DAILY CHART

Gold Elliott Wave Chart Daily 2017
Click chart to enlarge.

Intermediate wave (B) may be continuing higher to find resistance at the maroon A-C trend line. Triangles normally adhere very well to their trend lines; it is common for triangle sub-waves to test the triangle trend lines. There is a little room for further upwards movement before price touches the trend line.

If this wave count is correct, then intermediate wave (B) should be over within the next 24 hours.

Redraw the trend channel about the continuing zigzag of intermediate wave (B). When price breaks below the lower edge, that may be taken as an indication that intermediate wave (B) may be over and intermediate wave (C) may be underway.

HOURLY CHART

Gold Elliott Wave Chart Hourly 2017
Click chart to enlarge.

Upwards movement could only be a continuation of intermediate wave (B) if the larger premise for this wave count, a large triangle, is correct.

The target assumes a Fibonacci ratio between minor waves A and C. If the target is wrong, it may be a little too low. Minor wave C may move higher to find resistance at the maroon trend line on the daily chart. There may not be a Fibonacci ratio exhibited between minor waves A and C.

A best fit channel is drawn about minor wave C and anchor points are given for the channel. If downwards movement clearly breaches this channel, it may be taken as the earliest indication that intermediate wave (B) may again be over.

A breach of the wider blue channel by downwards movement would be a stronger indication that intermediate wave (B) may be over.

After trying various different ways of labelling minor wave C, my conclusion at this time is minute waves iii and iv are most likely incomplete. This labelling meets all Elliott wave rules and fits with momentum.

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 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.

Only minor wave 1 may have been over at the last high. Minor wave 2 may have begun. Minor wave 2 today may be continuing further as an expanded flat correction. It would be possible to label it over at the last low, but that would see minor wave 2 remarkably brief and shallow. It would have better proportion and be of more normal depth if it continued as a very common expanded flat.

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

HOURLY CHART

Gold Elliott Wave Chart Hourly 2017
Click chart to enlarge.

A new high above the end of minor wave 1 at 1,273.83 indicates the last wave down cannot be a five, so it must be a three. It will fit well as a double zigzag, which is classified as a three.

Minor wave 2 may be continuing as an expanded flat subdividing 3-3-5.

Minute wave b may be incomplete and may end within the normal range calculated here for B waves of flat corrections.

When minute wave b is over, then the ratio between minute waves a and c may be used to calculate a target for minor wave 2 to end. If the calculation coincides with one of the Fibonacci ratios of minor wave 1, then it would create a target zone with a good probability.

TECHNICAL ANALYSIS

WEEKLY CHART

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

An upwards week closes with a red weekly candlestick.

To correctly analyse volume for this week it should be done at the daily chart level, to look “inside” the week.

On Balance Volume gives no signal. It is constrained.

ADX and ATR both support the main weekly Elliott wave count. This is what a triangle should look like.

DAILY CHART

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

Stepping back and looking at the larger consolidation, Gold moved into a range back in February this year, delineated by support and resistance zones. During this consolidation, it is two upwards days of 7th of April and the 17th of May that have strongest volume. This suggests an upwards breakout is more likely than downwards, and it supports the alternate Elliott wave count and not the main Elliott wave count.

However, this signal is not a strong one. The third strongest day of the 18th of May is a downwards day, and it is very close in volume to the two upwards days.

Bullishness in the long lower candlesticks wicks has now been followed by a strong upwards day, and in hindsight now looks prescient.

The new high today comes with bearish divergence between price and RSI, and Stochastics.

A new resistance line is drawn for On Balance Volume.

Volume today supports upwards movement, but volume remains lighter than the prior downwards day of the 5th of August.

In the short term, this chart has some bullishness. Look for resistance now about 1,285. If divergence between price and RSI and Stochastics persists for another one or two days, then the view short term would change to bearish.

GDX

DAILY CHART

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

Stepping back for GDX too, to look at the past six months, a large descending triangle looks like it has formed and may be close to a breakout. Breakouts from descending triangles are usually downwards.

During this structure though it is an upwards day for the 15th of March that has strongest volume suggesting an upwards breakout may be more likely than downwards. This signal is also not a strong one for GDX. The next two strongest days are both downwards and both very strong.

The last gap is closed, so it cannot be a breakaway gap. It now looks like a pattern gap.

The bullishness of yesterday’s long lower wick is now followed by an upwards day with support from volume. The doji today puts the trend into neutral for the short term.

Neither Stochastics nor RSI are oversold; there is room for price to fall further.

Published @ 08:40 p.m. EST.