Downwards movement was expected for Friday’s session, which is what has happened.

Both Elliott wave counts expect the same direction next.

Summary: Price remains range bound and volume suggests a downwards swing to support may begin here. The upwards trend remains very extreme and overbought. The risk of a large consolidation or major trend change here is very high indeed.

The bullish Elliott wave count expects a swing down to 1,473 to 1,470.

The bearish wave count expects a major trend change at the last high.

Grand SuperCycle analysis is here.

Monthly charts were last published here with video here.

BEARISH ELLIOTT WAVE COUNT

WEEKLY CHART

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It is possible that Super Cycle wave (b) is completing as a double zigzag.

The first zigzag in the double is labelled cycle wave w. The double is joined by a three in the opposite direction, a triangle labelled cycle wave x. The second zigzag in the double is labelled cycle wave y.

Cycle wave y may now be a complete zigzag.

The purpose of the second zigzag in a double is to deepen the correction. Cycle wave y has achieved this purpose.

A new low below 1,346.45 would add strong confidence to this wave count. At that stage, the bullish Elliott wave count would be invalidated.

A wide best fit channel is added in light blue. This channel contains all of Super Cycle wave (b) and may currently provide strong resistance. Copy this channel over to daily charts.

DAILY CHART

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Within cycle wave y, the triangle that ended on the 17th of July may have been primary wave B. Primary wave C may have begun there. Primary wave C must subdivide as a five wave structure; it could be a complete impulse.

Within cycle wave y, there is no Fibonacci Ratio between primary waves A and C.

A breach of the best fit trend channel by downwards movement would be a very strong indication of a major trend change.

HOURLY CHART

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It is again possible that Super Cycle wave (b) may be a complete five wave impulse at the last high.

If there has been a major trend change, then a five down should develop at hourly, daily and weekly chart levels. The fist small five down on the hourly chart is labelled minor wave 1, which may now be complete.

Minor wave 2 may not move beyond the start of minor wave 1 above 1,556.11.

BULLISH ELLIOTT WAVE COUNT

WEEKLY CHART

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This wave count sees the the bear market complete at the last major low for Gold in November 2015.

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 and just after 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. This wave count still suffers from this very substantial problem, and for this reason the bearish wave count is still considered because it has a better fit in terms of Elliott wave structure.

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

Cycle wave III may have begun. Within cycle wave III, primary waves 1 and 2 may now be complete. Primary wave 3 has now moved above the end of primary wave 1 meeting a core Elliott wave rule. It has now moved far enough to allow room for primary wave 4 to unfold and remain above primary wave 1 price territory. Primary wave 4 may not move into primary wave 1 price territory below 1,346.45.

Cycle wave III so far for this wave count would have been underway now for 55 weeks. It is beginning to exhibit some support from volume and increasing ATR. This wave count now has some support from classic technical analysis.

The channel drawn about cycle wave III is an Elliott channel. Primary wave 4 may find support about the lower edge if it is time consuming enough.

Add the wide best fit channel to weekly and daily charts.

DAILY CHART

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Primary wave 4 may be continuing as an expanded flat, which is a common corrective structure. This would see alternation in structure with the zigzag of primary wave 2.

Primary wave 2 lasted 43 sessions. Primary wave 4 may be expected to be more brief; Gold usually exhibits more brief fourth waves than their counterpart second waves. Primary wave 4 may end in a total Fibonacci 21 or 34 sessions. So far it has lasted 18 sessions.

Primary wave 4 may not move into primary wave 1 price territory below 1,346.45.

Intermediate wave (B) may have moved higher. There is no Elliott wave rule which states a limit for B waves within flat corrections, so there is no upper invalidation point for this wave count.

B waves should be identifiable by weak volume, momentum or ATR. If intermediate wave (B) is over at the last high, then it has ended on weak volume, exhibits bearish divergence between price and On Balance Volume, and exhibits quadruple bearish divergence between price and RSI. Technical analysis supports the possibility that this high may be the end of a B wave.

HOURLY CHART

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Within expanded flat corrections, wave B is commonly from 1 to 1.38 times the length of wave A. For this example, intermediate wave (B) is now just beyond the most common length at 1.44 times the length of intermediate wave (A). This is acceptable.

A target is calculated for intermediate wave (C).

Within intermediate wave (C), minor wave 2 may not move beyond the start of minor wave 1 above 1,556.11.

TECHNICAL ANALYSIS

WEEKLY CHART

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

When trends reach very extreme, candlestick reversal patterns should be given weight. The Dark Cloud Cover bearish reversal pattern is given more bearish weight from the long upper wick.

The risk of a major high and a trend change or a large time consuming consolidation developing here is very high. These two scenarios effectively follow the main bearish wave count (major trend change) or bullish wave count (a large time consuming consolidation).

Despite a very slight new high this week, the weekly candlestick is bearish and has support from volume pushing price lower.

DAILY CHART

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

The Bearish Engulfing pattern is very strong. It fully engulfs the real bodies of the prior seven daily candlesticks. Coming after an upwards trend reached very extreme and indicators reached overbought then exhibited multiple bearish divergence with price, the probability here of either a major trend change to a new downwards trend, or a major consolidation to last weeks or months, is very high indeed.

The last swing low is at 1,488.90. A new low below this point would confirm a trend change.

GDX WEEKLY CHART

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

Look out for either a trend change to either down or sideways here.

GDX DAILY CHART

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

A new low below the prior swing low at 27.61 would confirm a trend change.

Published @ 11:22 p.m. EST.

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New updates to this analysis are in bold.