All three hourly Elliott wave counts expected upwards movement, which is what happened on Friday.

Summary: Price may continue to move sideways in an ever decreasing range for another one to three weeks.

An upwards swing may continue here to end about resistance at 1,305 to 1,310.

Only the most experienced of traders should be trading the small swings within a consolidation. If trading the small swings, reduce risk to 1-3% of equity for any one trade and always trade with stops.

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.

The wave counts will be labelled first and second. Classic technical analysis will be used to determine which wave count looks to be more likely. In terms of Elliott wave structure the second wave count has a better fit and fewer problems. The second wave count is my preferred wave count.

FIRST ELLIOTT WAVE COUNT

WEEKLY CHART

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Both wave counts expect that Gold completed a large five down from the all time high in November 2011 to the low of December 2015, which is seen on the left hand side of both weekly charts.

If this analysis is correct, then the five down may not be the completion of the correction. Corrective waves do not subdivide as fives; they subdivide as threes. The five down is seen as cycle wave a within a Super Cycle wave (a).

Both wave counts then expect cycle wave b began in December 2015.

There are more than 23 possible corrective structures that B waves may take. It is important to always have multiple wave counts when B waves are expected.

It looks unlikely that cycle wave b may have been over at the high labelled primary wave W. Primary wave W lasted less than one year at only 31 weeks. Cycle waves should last one to several years and B waves tend to be more time consuming than other Elliott waves, so this movement would be too brief for cycle wave b.

This first wave count expects that cycle wave b may be an incomplete double zigzag.

While this first wave count is entirely possible, there are three problems now which reduce its probability.

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.

3. Although intermediate wave (C) should be continuing so that primary wave Y ends substantially above the end of primary wave W, the duration of minor wave 2 within it now looks to be too large at the weekly time frame.

Within intermediate wave (C), no second wave correction may move beyond the start of its first wave below 1,205.41. However, prior to invalidation, this wave count may be discarded if price breaks below the lower edge of the black Elliott channel. If this wave count is correct, then intermediate wave (C) should not break below the Elliott channel which contains the zigzag of primary wave Y upwards.

DAILY CHART

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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.

Minor wave 1 was a long extension. The target for minor wave 3 expects that too to be a long extension. If this is the case, then minor wave 5 may be shorter (only two actionary waves in an impulse may be extended).

The target for minute wave iii fits with higher targets and expects it to exhibit the most common Fibonacci ratio to minute wave i.

If price makes a new high above 1,357.09, then the second wave count below would be discarded and more confidence may be had in this first wave count.

This first wave count expects now that recent movement should be the start of a third wave. Friday’s strong upwards movement now fits third wave behaviour.

HOURLY CHART

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Friday’s strong upwards movement may have been the middle of the third wave as labelled. This would expect that minuette wave (v) to come may be a long and strong extended fifth wave, forming a blow off top.

Subminuette wave iii may only subdivide as an impulse. Micro wave 3 within it may now be over. Micro wave 4 may not move into micro wave 1 price territory below 1,288.32.

Now that price is above the green base channel the upper edge may provide support.

Targets remain the same.

SECOND ELLIOTT WAVE COUNT

WEEKLY CHART

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Both wave counts are identical to the low labelled cycle wave a. Thereafter, they look at different possible structures for cycle wave b.

This wave count looks at cycle wave b to be most likely a regular contracting triangle.

The B-D trend line should have a reasonable slope for this triangle to have the right look, because the A-C trend line does not have a strong slope. A barrier triangle has a B-D trend line that is essentially flat; if that happened here, then the triangle trend lines would not converge with a normal look and that looks unlikely.

Primary wave D should be a single zigzag. Only one triangle sub-wave may be a more complicated multiple, and here primary wave C has completed as a double zigzag. This is the most common triangle sub-wave to subdivide as a multiple.

Primary wave D of a contracting triangle may not move beyond the end of primary wave B below 1,123.08.

At its completion, primary wave D should be an obvious three wave structure at the weekly chart level. Within primary wave D, intermediate wave (B) is incomplete. At this stage, it looks like intermediate wave (B) may be unfolding as a triangle. This now has a better fit at the daily and hourly chart level. At its conclusion, intermediate wave (B) should look like a corrective structure at the weekly chart level.

DAILY CHART

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A common length for triangle sub-waves is from 0.8 to 0.85 the length of the prior wave. Primary wave D would reach this range from 1,170 to 1,158.

Primary wave D should subdivide as a zigzag, and within it intermediate wave (B) looks incomplete.

Intermediate wave (A) lasted twenty days, just one short of a Fibonacci twenty-one. Intermediate wave (B) may be about the same duration, so that this wave count has good proportions, or it may be longer because B waves tend to be more complicated and time consuming.

So far intermediate wave (B) has lasted thirty sessions, it is incomplete and needs several more sessions now to complete. The next Fibonacci ratio in the sequence is thirty four. If intermediate wave (B) completes as a triangle, then it may not end within a total Fibonacci thirty-four sessions and may need longer than that for the structure to complete. It may either not exhibit a Fibonacci duration, or it may last a total Fibonacci fifty-five sessions.

At this stage, intermediate wave (B) will be labelled as a triangle.

Within the triangle of intermediate wave (B), the zigzag of minor wave C may now be almost complete.

HOURLY CHART

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Within the possible triangle for intermediate wave (B), so far it is minor wave B that subdivides best as a double zigzag. This means that all remaining sub-waves of the triangle for intermediate wave (B) must be simple A-B-C structures, most likely zigzags, if that portion of the analysis is correct.

Minor wave C may still be a zigzag, and within it minute wave b will fit as a completed barrier triangle. The (b)-(d) trend line is essentially flat. All subdivisions fit perfectly.

Within the zigzag of minor wave C, minute wave c would reach equality in length with minute wave a at 1,295.85. If minor wave C ends very close to Friday’s high, then there would exist a Fibonacci ratio of equality between minute waves a and c.

One slight new high may be required for subminuette wave v to complete the impulse of minuette wave (v).

Thereafter, this wave count would expect zigzag downwards for minor wave D. Minor wave D may not move reasonably beyond the end of minor wave B below 1,262.50.

THIRD ELLIOTT WAVE COUNT

DAILY CHART

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This third wave count looks at intermediate wave (B) as a flat correction. Within a zigzag, minor wave C would need further upwards movement for the structure to complete. The target at 1,308 remains the same.

Minor wave C must subdivide as a five wave structure. So far within it, minute waves i and ii, and minuette waves (i) and (ii), may be complete.

HOURLY CHART

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If intermediate wave (B) is unfolding as a flat correction, then minor wave C upwards must subdivide as a five wave structure. It may be either an impulse or an ending diagonal.

Within the impulse, the middle of the third wave may have passed on Friday. Subminuette wave iv may not move into subminuette wave i price territory below 1,288.32.

The targets remain the same.

TECHNICAL ANALYSIS

WEEKLY CHART

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All commentary this week is on the chart.

On Balance Volume at the weekly chart level favours the second main wave count.

DAILY CHART

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Price is very clearly consolidating. Expect swings from support to resistance and back again. Use Stochastics in conjunction with support and resistance to signal when each swing ends. When price is at support or resistance and Stochastcis is oversold or overbought at the same time, then expect one swing to end and the next to begin.

Be aware that trading a consolidating market is much more risky than trading a trending market, and reduce risk accordingly. Only experienced traders should consider trading the swings within a consolidation. Reduce risk to 1-3% of equity. Always trade with stops. Here, move stops to a little below support and above resistance to allow for overshoots; give the market room to move.

Consolidating markets are risky because support and resistance may be overshot before price returns to within the consolidation. Price does not move in straight lines during each swing; it is often choppy and overlapping. Consolidations are characterised by declining ATR, as this one is, which makes profitable trades much more difficult.

Patience is required to stand aside and wait for a breakout. Sometimes it is the trades that you do not take that make the difference between profit and loss.

The strongest volume day within the current smaller consolidation delineated by blue trend lines is still a downwards day. This suggests a downwards breakout may be more likely. This supports the second wave count.

Volume supported upwards movement for Friday, so a green daily candlestick should be expected as fairly likely for Monday. It now looks more clear that an upwards swing to resistance is underway.

GDX DAILY CHART

Click chart to enlarge. Chart courtesy of StockCharts.com.

An upwards swing may be expected to continue to resistance about 23.95.

Price does not move in straight lines within consolidations, making them poor trading opportunities. If trading this upwards swing, then reduce risk to only 1-3% of equity to acknowledge higher risk.

Published @ 04:44 p.m. EST on 18th November, 2017..