Another small range day and a little more downwards movement overall fits the expectations for the Elliott wave counts.

Summary: Three long-term targets are now calculated for cycle wave c to end. Confidence in a new downwards trend may be had with a new low below 1,160.75.

For the short term, minor wave 1 may now be coming to an end. When it is complete, then expect a multi-day bounce or consolidation for minor wave 2. Expect minor wave 2 to find strong resistance about 1,300 – 1,310.

New updates to this analysis are in bold.

Grand SuperCycle analysis is here.

Last historic analysis with monthly charts is here.

MAIN ELLIOTT WAVE COUNT

WEEKLY CHART – TRIANGLE

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This is the preferred wave count.

Cycle wave b may be a complete regular contracting triangle. If it continues further, then 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. 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.

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.

This wave count would expect a cycle degree trend change has just occurred. Cycle wave c would most likely make new lows below the end of cycle wave a at 1,046.27 to avoid a truncation.

Primary wave E should exhibit reasonable weakness as it comes to an end. Triangles often end with declining ATR, weak momentum and weak volume.

If this weekly wave count is correct, then cycle wave c downwards should develop strength, ATR should show some increase, and MACD should exhibit an increase in downwards momentum.

Three targets are calculated for cycle wave c. Cycle wave a lasted 4.25 years. Cycle wave b may be over in 3.17 years. Cycle wave c may last a minimum of 2 years and possibly up to 5 years.

DAILY CHART – TRIANGLE

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Further confidence in this wave count may be had now that the blue channel is breached by a full daily candlestick below and not touching the lower edge.

Classic analysis offers good support to this wave count.

Cycle wave c must subdivide as a five wave structure, either an impulse or an ending diagonal. An impulse is much more common and that shall be how it is labelled unless overlapping suggests a diagonal should be considered.

A new trend at cycle degree should begin with a five wave structure on the daily chart, which will be labelled minor wave 1. When minor wave 1 is complete, then minor wave 2 may not move beyond its start above 1,345.90.

HOURLY CHART

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Minute waves i,ii and iii may be complete.

Labelling of this correction (which is unlikely to be complete) may yet change again as it unfolds, because it is still not possible to tell what structure minute wave iv may be.

Today a triangle is considered for minute wave iv.

If minuette wave (d) within minute wave iv moves lower, then it may not move reasonably below the end of minuette wave (b) below 1,282.12. Within the triangle, minuette wave (e) may not move beyond the end of minuette wave (c) above 1,288.25.

If the triangle is invalidated with a new high above 1,288.25 or a new low reasonably below 1,282.12, then minute wave iv may be relabelled as a combination or double flat correction.

All of triangles, double combinations and double flats are sideways corrections. If minute wave iv is time consuming, then it may end about resistance at the upper edge of the best fit channel.

Minute wave iv may not move into minute wave i price territory above 1,321.95.

When minute wave iv is finally complete, then minute wave v may continue lower. When the end of minute wave iv is known, then a target may be calculated for minute wave v to end; that cannot be done while minute wave iv continues. Minute wave v would most likely be about equal in length with minute wave i, which was $24.66.

When minor wave 1 may be complete, then minor wave 2 may unfold over a few days.

WEEKLY CHART – DOUBLE ZIGZAG

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It is possible that cycle wave b may be an incomplete 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 four fifths complete.

Within multiples, X waves are almost always zigzags and rarely triangles. Within the possible triangle of primary wave X, it is intermediate wave (B) that is a multiple; this is acceptable, but note this is not the most common triangle sub-wave to subdivide as a multiple. These two points reduce the probability of this wave count.

Intermediate wave (D) may be complete. The (B)-(D) trend line is almost perfectly adhered to with the smallest overshoot within intermediate wave (C). This is acceptable.

Intermediate wave (E) should continue to exhibit weakness: ATR should continue to show a steady decline, and MACD may begin to hover about zero.

Intermediate wave (E) may not move beyond the end of intermediate wave (C) below 1,160.75.

This wave count may now expect downwards movement for several weeks.

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.

WEEKLY CHART – ALTERNATE BULLISH

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Because the preferred wave count is at a critical juncture in expecting a cycle degree trend change, it is time to consider an alternate which expects the continuation of the an upwards trend.

It is possible that the low in December 2015 was the end of a bear market and that Gold has been in a basing action for the past three years. Downwards movement to that low will subdivide as a double zigzag, a corrective structure.

If Gold is in a new bull market, then it should begin with a five wave structure upwards on the weekly chart. However, the biggest problem with this wave count is the structure labelled cycle wave I because this wave count must see it as a five wave structure, but it looks more like a three wave structure.

Commodities often exhibit swift strong fifth waves that force the fourth wave corrections coming just prior to be more brief and shallow than their counterpart second waves. It is unusual for a commodity to exhibit a quick second wave and a more time consuming fourth wave, and this is how cycle wave I is labelled. The probability of this wave count is low due to this problem.

Cycle wave II subdivides well as a double combination: zigzag – X – expanded flat.

Cycle wave III may have begun. Within cycle wave III, primary wave 1 may now be complete. The target for primary wave 2 is the 0.618 Fibonacci ratio of primary wave 1. Primary wave 2 may not move beyond the start of primary wave 1 below 1,160.75.

A black channel is drawn about primary wave 1. Primary wave 2 may breach the lower edge of this channel.

Cycle wave III so far for this wave count would have been underway now for 27 weeks. It should be beginning to exhibit some support from volume, increase in upwards momentum and increasing ATR. However, volume continues to decline, ATR continues to decline and is very low, and momentum is weak in comparison to cycle wave I. This wave count lacks support from classic technical analysis.

TECHNICAL ANALYSIS

WEEKLY CHART

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There are now two bearish candlestick reversal patterns on the weekly chart: a Shooting Star and a Bearish Engulfing pattern. This supports the view that a high is in place.

DAILY CHART

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The Evening Star reversal pattern indicates a trend change here to either down or sideways.

With volume today pushing price lower, it looks like downwards movement may continue a little further. Next support below is about 1,275.

GDX WEEKLY CHART

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The Bearish Engulfing pattern at the weekly chart level should be given weight in this analysis. It signals an end to the upwards trend and a new downwards or sideways trend.

GDX DAILY CHART

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Look for next support about 21.40 to 21.10.

Price is now within a small consolidation. It may yet unfold into a bearish flag or pennant pattern, but today is too soon to see the pattern.

Published @ 08:32 p.m. EST.

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