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Upwards movement was expected after last analysis. Friday completed a higher high and a higher low, but a deep pullback at the end of the session closed the candlestick red. Price remains above the invalidation point on the hourly chart.

Summary: The target is now 1,376. The limit is now 1,393.92. Stops may be set just below the cyan Magee trend line.

If price breaks below the cyan trend line, then long positions should be exited and shorts considered.

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 for the main wave count are here, another monthly alternate is here, and video is here.

Grand SuperCycle analysis is here.



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

There is strong support from classic technical analysis for this wave count. Now that price has fully broken above the Magee trend line and has broken out above a consolidation zone, with support from volume, this wave count will now be the main wave count.

There are more than 23 possible corrective structures that B waves may take, and although cycle wave b still fits well at this stage as a triangle, 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.

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

There are two problems with this wave count which reduce its probability in terms of Elliott wave:

1. Cycle wave b is a double zigzag, but primary wave X within the double is deep and time consuming. While this is possible, it is much more common for X waves within double zigzags to be brief and shallow.

2. Intermediate wave (B) within the zigzag of primary wave Y is a double flat correction. These are extremely rare, even rarer than running flats. The rarity of this structure must further reduce the probability of this wave count.

Although this wave count still has these problems, technical analysis now points to it being more likely. The alternate will continue to be considered until price invalidates it.


Gold Elliott Wave Chart Daily 2017
Click chart to enlarge.

The analysis will focus on the structure of intermediate wave (C). To see details of all the bull movement for this year see daily charts here.

Intermediate wave (C) must be a five wave structure, either an impulse or an ending diagonal. It is unfolding as the more common impulse.

Within intermediate wave (C), minor waves 1 through to 4 now look complete. If my labelling of intermediate wave (C) is wrong, it may be in labelling minor wave 1 complete lower down; it is also possible that minor wave 1 only was complete at the last high.

For now this labelling fits with MACD. Minor wave 3 exhibits stronger momentum then minor wave 1. Minor wave 3 is 18.80 shorter than minor wave 1. This will limit minor wave 5 to no longer than equality in length with minor wave 3, so that minor wave 3 is not the shortest wave and the core Elliott wave rule is met.

There is alternation between the very shallow 0.21 single zigzag of minor wave 2 and the deeper 0.52 double zigzag of minor wave 4. Minor wave 2 lasted five days and minor wave 4 has lasted four days. There is excellent proportion giving the wave count the right look.

It is possible that minor wave 4 may move very slightly lower, still finding support at the cyan trend line. The second zigzag of minute wave y may not be quite complete; it may move to a slight new low on Monday before price turns up strongly.

This pullback look like an absolutely typical back test of support after a trend line is breached. Expect support to hold there as most likely. A more bearish view should only be considered if that line does not hold.

Minor wave 4 may not move into minor wave 1 price territory below 1,300.54.


Gold Elliott Wave Chart Hourly 2017
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Minor wave 4 fits as a double zigzag.

Minor wave 5 must subdivide as a five wave structure, either an ending diagonal or more commonly an impulse.

Within an impulse, the first second wave correction is usually very deep. Here, minute wave ii fits now as a double zigzag and is very deep. This follows typical behaviour for Gold.

After a breach of the pink trend channel containing minor wave 4, it looks like price is now finding support at that line.

Minute wave ii may not move beyond the start of minute wave i below 1,317.59.

If this invalidation point is breached, then minor wave 4 may be moving very slightly lower. Stops should be set just below the cyan line, not just below the invalidation point at this time.



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

The Magee trend line is now breached by a full weekly candlestick above and not touching the line. This substantially reduces the probability of this wave count.

The Magee bear market trend 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.

To use this trend line in the way Magee describes, we should assume that price will find resistance at the line if it gets back up there. Now that the line is breached, it is signalling a major trend change from bear to bull.

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.

Intermediate wave (Y) now looks like a complete zigzag at the weekly chart level.

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.

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 started its 38th week. A double zigzag may be expected to be longer lasting than single zigzags within a triangle, and so this continuation of primary wave C is entirely acceptable and leaves the wave count with the right look at this time frame.

With upwards movement continuing, the A-C trend line now has too weak a slope. At this stage, this wave count now looks less likely.


Gold Elliott Wave Chart Daily 2017
Click chart to enlarge.

The cyan Magee trend line has now been breached. This must reduce the probability of this wave count.

A breach of the blue Elliott channel by downwards movement would indicate a trend change.

The structure of minor wave C may now be complete.

If price makes a new low below 1,317.59 next week, then this wave count may again be seriously considered. That would involve a failure of the Magee bear market trend line, which would be unusual but is not without precedent.


Gold Elliott Wave Hourly 2017
Click chart to enlarge.

Minor wave 2 may be continuing sideways as a double combination. The most common two structures in a double combination are one zigzag and one flat correction.

Within the flat correction of minute wave y, minuette wave (b) must move slightly lower to retrace a minimum 0.9 length of minuette wave (a) at 1,319.26. Minuette wave (b) may make a new low below minuette wave (a) as in an expanded flat.

The purpose of double combinations is to take up time and move price sideways. To achieve this purpose the second structure in the double normally ends close to the same level as the first structure. Minute wave y may end about 1,335.

Minor wave 2 may not move beyond the start of minor wave 1 above 1,357.09.



Gold Weekly 2017
Click chart to enlarge. Chart courtesy of

This weekly candlestick completes as very bearish. It is not engulfing the prior weekly candlestick, but it is even more bearish than that. The week gaps open lower and then closes well below the prior weekly candlestick. Bears dominated this week. They managed to pull price down to new lows substantially below the prior week, closing below the lower wick of the week before.

This candlestick supports the alternate Elliott wave count.

ADX and On Balance Volume however remain very bullish.


Gold Daily 2016
Click chart to enlarge. Chart courtesy of

This chart is mixed.

Bearish: the Evening Star reversal pattern, extreme ADX now declining, and MACD.

Bullish: short term volume profile, On Balance Volume, and Bollinger Bands.

Neutral: RSI and Stochastics.

A bearish signal from On Balance Volume would be required for a more bearish outlook. If On Balance Volume moves lower on Monday, that would provide such a signal.



GDX Daily 2016
Click chart to enlarge. Chart courtesy of

On Friday GDX fell of its own weight. Volume does not support the fall in price. Short term volume remains bullish. This looks more likely a pullback within an ongoing upwards trend than it does a new downwards trend.

Only ADX turning downwards from extreme looks more bearish.


Gold Daily 2016
Click chart to enlarge. Chart courtesy of

This section will be left at the end of analysis until either the current wave count is proven wrong, or the third wave we are expecting has completed.

This chart has been published before. It shows the most recent example of a strong third wave in Gold from December 2015 to March 2016.

Note that during this strong upwards trend:

– RSI first reached overbought on the 4th of February and price then continued strongly higher for five more days culminating in a blowoff top on the 11th of February.

– RSI and Stochastics remained extreme for most of the second half of the trend. At the final high, they both exhibited strong divergence with price.

– Price found support at the short term Fibonacci 13 day moving average during the entire trend.

– All signals from On Balance Volume were bullish right up to the end of the trend. The 9th of March shows the first bearish signal, which was an important warning of a trend change.

– The trend begins with choppy overlapping and some hesitancy.

– The 6th of January was an important upwards breakout from resistance, with support from volume. Thereafter, price moved more strongly.

– While overall volume supported the upwards movement in price, this was not linear. Some weaker days occurred yet price continued higher. It is the overall trend of volume which is more important than any one or two days. On Balance Volume remaining bullish was an important guide.

No two waves are the same. So if the current wave count is correct, it may be different from this example. However, there are some important lessons to be learned here:

1. On Balance Volume is an important guide. Bullish signals should be taken seriously, particularly early on in the trend. Later in the trend, with RSI and Stochastics overbought, any bearish signal from On Balance Volume should see long positions closed.

2. RSI and Stochastics can reach extreme overbought. Only when they have been extreme for some time and then exhibit strong divergence should it be taken as a warning of a trend change.

Published @ 07:41 p.m. EST on 16th September, 2017.