Select Page

A little more downwards movement remains within the current consolidation zone. Only one hourly Elliott wave count now remains, giving some clarity on the structure of the correction.

Summary: A fourth wave may end within the next few hours. The target for one final low is at 1,274. Thereafter, a sharp reversal and a short upwards thrust to 1,305 – 1,310 is expected.

New updates to this analysis are in bold.

Grand SuperCycle analysis is here.

Last historic analysis with monthly charts is here.

Only two remaining wave counts have a reasonable probability and are published below: a triangle (the preferred wave count) and a double zigzag.

MAIN ELLIOTT WAVE COUNT

WEEKLY CHART – TRIANGLE

Gold Elliott Wave Chart Weekly 2018
Click chart to enlarge.

Cycle wave b may be an incomplete regular contracting triangle. Primary wave E may not move beyond the end of primary wave C above 1,365.68.

Within primary wave E, intermediate waves (A) and (B) may be complete. Intermediate wave (C) must subdivide as a five wave structure. Within intermediate wave (C), minor wave 4 may not move into minor wave 1 price territory below 1,241.88.

Four of the five sub-waves of a triangle must be zigzags, with only one sub-wave allowed to be a multiple zigzag. 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 E looks like it is unfolding as a single 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.

When primary wave E is a complete three wave structure, then this wave count would expect a cycle degree trend change. Cycle wave c would most likely make new lows below the end of cycle wave a at 1,046.27 to avoid a truncation.

It is possible now that primary wave E may end in January or February 2019. Some reasonable weakness should be expected at its end. Triangles often end with declining ATR, weak momentum and weak volume.

DAILY CHART – TRIANGLE

Gold Elliott Wave Chart Daily 2018
Click chart to enlarge.

Primary wave E may now be nearing its final stages for this wave count.

Primary wave E should subdivide as a zigzag. Intermediate waves (A) and (B) may now be complete. Intermediate wave (C) may now be nearing completion.

Minor wave 2 is a deep 0.75 zigzag. Minor wave 4 may be expected to most likely be a shallow sideways flat, triangle or combination. However, at this stage a triangle is now invalidated for minor wave 4 and a zigzag is now indicated. Alternation is a guideline, not a rule, and is not always seen. Zigzags are the most common corrective structure. There is still alternation in depth: minor wave 2 was deep and so far minor wave 4 remains very shallow.

Minor wave 3 exhibits the most common Fibonacci ratio to minor wave 1.

Minor wave 4 may not move into minor wave 1 price territory below 1,241.88.

A target for primary wave E is the strong zone of resistance about 1,305 to 1,310. Primary wave E may not move beyond the end of primary wave C above 1,365.68.

When minor wave 4 may be complete, then the target may be calculated at minor degree.

HOURLY CHART

Gold Elliott Wave Chart Hourly 2018
Click chart to enlarge.

At this stage, the only remaining valid structure for minor wave 4 is a zigzag. Within the zigzag, minute wave b may be a complete regular contracting triangle and minute wave c must complete as a five wave structure.

Minute wave c has moved below the end of minute wave a at 1,277.45 avoiding a truncation. Minute wave c is unfolding as an impulse and may require only one final slight new low to complete its structure.

Minor wave 2 was a deep 0.75 zigzag. Minor wave 4 may exhibit alternation as a very shallow correction but lack alternation in structure. Alternation is a guideline, not a rule, and is not always seen. Zigzags are the most common corrective structure.

Minor wave 4 may not move into minor wave 1 price territory below 1,241.88.

WEEKLY CHART – DOUBLE ZIGZAG

Gold Elliott Wave Chart Weekly 2018
Click chart to enlarge.

It is possible that cycle wave b may be a double zigzag or a double combination.

The first zigzag in the double is labelled primary wave W. This has a good fit.

The double may be joined by a corrective structure in the opposite direction, a triangle labelled primary wave X. The triangle would be about three quarters complete.

Within the triangle of primary wave X, intermediate wave (C) should be complete. Within intermediate wave (D), minor waves A and B may be complete. Minor wave C must subdivide as a five wave structure. Within minor wave C, minute wave iv may not move into minute wave i price territory below 1,241.88.

Intermediate wave (D) would most likely subdivide as a single zigzag.

This wave count may now expect choppy overlapping movement in an ever decreasing range for a few more months.

Primary wave Y would most likely be a zigzag because primary wave X would be shallow; double zigzags normally have relatively shallow X waves.

Primary wave Y may also be a flat correction if cycle wave b is a double combination, but combinations normally have deep X waves. This would be less likely.

This wave count has good proportions and no problems in terms of subdivisions.

TECHNICAL ANALYSIS

WEEKLY CHART

Gold Weekly 2018
Click chart to enlarge. Chart courtesy of StockCharts.com.

ADX indicates a potential trend change to upwards, but as yet it does not indicate a new trend at this time frame.

Last week completes an inside week with the balance of volume downwards and the candlestick closing red. Downwards movement within the week has some support from volume.

DAILY CHART

Gold Daily 2018
Click chart to enlarge. Chart courtesy of StockCharts.com.

The pennant pattern may be continuing. The adjusted lower trend line still has a positive slope. If price moves lower, then the pennant pattern may morph into a flag pattern. Both are continuation patterns.

With volume supporting the last two downwards day’s movement, there may be a little more downwards movement this week. It may be limited though as On Balance Volume is at support.

GDX WEEKLY CHART

GDX Weekly 2018
Click chart to enlarge. Chart courtesy of StockCharts.com.

Another breakout below 20.80 is very bearish. GDX may be now ready for another strong fall in price.

GDX DAILY CHART

GDX Daily 2018
Click chart to enlarge. Chart courtesy of StockCharts.com.

The flag pattern remains valid for GDX, which has lasted now 10 sessions. The best flags and pennants complete within 15 sessions.

Flags are continuation patterns. An upwards breakout would be expected. The target would be about 22.60.

Published @ 06:41 p.m. EST.


Careful risk management protects your trading account(s).
Follow my two Golden Rules:

1. Always trade with stops.

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