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Another inside day completes a Shooting Star candlestick pattern. The implications of this pattern today are evaluated in context of recent price movement.

Members’ attention today is directed to the long term picture for GDX, which is significant for this market.

Summary: With support from volume, GDX has today effected a downwards breakout from a very long held consolidation (beginning December 2016). The target is at 16.10.

A mid term low for Gold may still be in place. Confidence may be had with a new high above 1,227.46.

A target for a strong bounce here is about 1,304, which may be reached in several weeks. Along the way up, there may be either a sharp pullback or a sideways time consuming consolidation.

Always trade with stops to protect your account. Risk only 1-5% of equity on any one trade.

New updates to this analysis are in bold.

Grand SuperCycle analysis is here.

Last historic analysis with monthly charts and several weekly alternates is here, video is here.

Weekly charts are last updated here. Only one weekly chart will be published on a daily basis. All may be reviewed on a once a week basis.



Gold Elliott Wave Chart Weekly 2018
Click chart to enlarge.

There are four remaining weekly wave counts at this time for cycle wave b: a triangle, flat, combination or double zigzag. All four weekly charts were reviewed in last end of week analysis, and may be again reviewed at the end of this week. At this time, all four weekly charts expect some upwards movement here.

While the direction does not diverge for these four weekly wave counts, only one weekly wave count shall be published on a daily basis, so that the analysis is manageable for me to publish and for members to digest. Note: This does not mean that the remaining three counts may not be correct.

The triangle so far has the best fit and look.

Cycle wave b may be an incomplete triangle. The triangle may be a contracting or barrier triangle, with a contracting triangle looking much more likely because the A-C trend line does not have a strong slope. A contracting triangle could see the B-D trend line have a stronger slope, so that the triangle trend lines converge at a reasonable rate. A barrier triangle would have a B-D trend line that would be essentially flat, and the triangle trend lines would barely converge.

Within a contracting triangle, primary wave D may not move beyond the end of primary wave B below 1,123.08. Within a barrier triangle, primary wave D may end about the same level as primary wave B at 1,123.08, so that the B-D trend line is essentially flat. Only a new low reasonably below 1,123.08 would invalidate the triangle.

Within both a contracting and barrier triangle, primary wave E may not move beyond the end of primary wave C above 1,365.68.

Four of the five sub-waves of a triangle must be zigzags, with only one sub-wave allowed to be a multiple zigzag. Primary wave C is the most common sub-wave to subdivide as a multiple, and this is how primary wave C for this example fits best.

Primary wave D must be a single structure, most likely a zigzag.

There are no problems in terms of subdivisions or rare structures for this wave count. It has an excellent fit and so far a typical look.


Gold Elliott Wave Chart Daily 2018
Click chart to enlarge.

Primary wave D may again be over. The structure may again be complete at all wave degrees.

Minor wave 5 may have ended almost exactly at the lower edge of the blue Elliott channel.

A target is calculated for primary wave E to end. Primary wave E must subdivide as a zigzag. It may last several weeks.

The main hourly chart today expects that primary wave D is over. An alternate hourly chart looks at the possibility it may still continue to one more low.


Gold Elliott Wave Chart Hourly 2018
Click chart to enlarge.

Minute wave iv may have been a double combination. Minute wave v is a complete impulse.

The bounce up during Friday’s session is very strong and has good support from volume.

Minute wave ii may now be a complete zigzag. But if it is complete, as labelled, then minuette wave (c) is slightly truncated by 0.61.

Minute wave ii may not move beyond the start of minute wave i below 1,204.69.

A new high now above 1,227.46 would invalidate the new hourly alternate wave count below and provide some confidence that a low should be in place.


Gold Elliott Wave Chart Hourly 2018
Click chart to enlarge.

Minute wave iv may have been over earlier as a single zigzag. Minute wave v may have begun at that point. This has a slightly better look for minute wave iv, but there would then be no alternation in structure between minute waves ii and iv because both would be single zigzags.

The overlapping within minute wave v means that an impulse will not at this stage fit. But an ending diagonal will fit, and the diagonal would be expanding: minuette wave (iii) is longer than minuette wave (i), minuette wave (iv) is longer than minuette wave (ii), and the trend lines diverge. Minuette wave (v) must be longer than minuette wave (iii), so that all rules for an ending expanding diagonal are met.

Ending diagonals require all sub-waves to subdivide as zigzags. Minuette wave (v) must subdivide as a zigzag.

Within the diagonal, minuette wave (iv) must overlap into minuette wave (i) price territory. This rule is met. Minuette wave (iv), if it continues any further, may not move beyond the end of minuette wave (ii) above 1,227.46.

Diagonals, like triangles, normally adhere very well to their trend lines. The slight overshoot of the upper (ii)-(iv) trend line today by subminuette wave b is a small cause of concern for this wave count.



Gold Weekly 2018
Click chart to enlarge. Chart courtesy of

At the end of last week, BarChart data has made a new low but StockCharts data has not.

The long term picture for this chart is bearish due to the long term bearish divergence between price and On Balance Volume. The short term is bullish due to long lower candlestick wicks and single short term divergence between price and Stochastics at last lows.


Gold Daily 2018
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It sill looks like a low may be in: the short term volume profile is bullish; there is a bullish candlestick reversal pattern at the last low; and, there was bullish divergence between price and Stochastics and RSI.

The downwards trend is extreme and stretched. It is time to look for a low. That does not mean price may move a little lower before it turns, only that a low should be anticipated here.

The Shooting Star candlestick pattern today should not be given weight. Shooting Stars are bearish reversal patterns, but only if they occur at the end of upwards trends. From Nison, “Japanese Candlestick Charting Techniques” page 74:

“Since the shooting star is a bearish reversal signal, it must come after a rally.”


GDX Weekly 2018
Click chart to enlarge. Chart courtesy of

GDX has been range bounce since January 2017. This is a very long sideways consolidation. The longer it continues, the more sustained the eventual breakout will be. Volume suggests the breakout may more likely be downwards.

Support about 20.80 has been tested about eight times and so far has held. The more often a support area is tested and holds, the more technical significance it has.

Price is now almost at support about 20.80. Stochastics is now oversold. Normally, it would be reasonable to expect that downwards movement may end here and an upwards swing may develop. But the very bearish signal from On Balance Volume suggests a downwards breakout may be about to happen.

A downwards breakout would require a close below support. If it has support from volume, it would be very bearish; but that is not necessary for a downwards breakout, because the market may fall of its own weight.


GDX Daily 2018
Click chart to enlarge. Chart courtesy of

GDX has now closed below support on a strong downwards day with support from volume. The low today is the lowest low for GDX since December 2016, so this downwards day is extremely significant for GDX.

Look now for a possible throwback to resistance about 20.80.

GDX is in a downwards trend. This trend is not yet extreme. It will not move in a straight line. Bounces may be opportunities to join the trend.

Please remember to protect your trading accounts by careful risk management. Follow my two Golden Rules:

1. Always trade with stops.

2. Risk only 1-5% of equity on any one trade.

A possible target for this downwards trend to end may be now calculated using the measured rule, giving a target about 16.10.

While GDX and Gold are often positively correlated, this correlation is unreliable. Gold may still have a multi week shallow bounce and GDX may still move overall lower with smaller bounces along the way. The two wave counts, and indeed technical analysis for these two markets, cannot be reliably linked while the correlation is unreliable.

Published @ 08:48 p.m. EST.