GOLD: Elliott Wave and Technical Analysis | Charts – February 28, 2020

A strong bearish engulfing pattern on the weekly chart has strong support from volume. This indicates a high is in place for Gold.

Summary: The bear market may have resumed for Gold to eventually make new lows below 1,046.27. For the short term, the first five down is incomplete. Expect more downwards movement next week. When a small fourth wave correction is over, then a target for the fifth wave may be calculated.

The alternate bullish wave count now expects a cycle degree fourth wave may have just begun. 

Grand SuperCycle analysis is here.

Monthly charts were last updated here.

BEARISH ELLIOTT WAVE COUNT

WEEKLY CHART

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Super Cycle wave (b) may be a complete 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.

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

A wide best fit channel is added in light blue. Copy this channel over to daily charts. Price is now above the upper edge of this channel, which may now provide some support.

DAILY CHART

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Super Cycle wave (b) may be complete.

A new trend at Super Cycle degree should begin with a five down at all time frames. This is labelled intermediate wave (1). Following the completion of intermediate wave (1), intermediate wave (2) may not move beyond the start of intermediate wave (1) above 1,687.92.

HOURLY CHART

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This hourly chart shows detail of intermediate wave (1).

Minor waves 1 through to 3 may be complete. Minor wave 4 may find resistance at the upper edge of the blue channel, and it may end about the 0.382 Fibonacci ratio of minor wave 3.

Minor wave 4 may not move into minor wave 1 price territory above 1,627.53.

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 on 3 December 2015.

If Gold is in a new bull market, then it should begin with a five wave structure upwards on the weekly chart.

Cycle wave I fits as a five wave impulse with reasonably proportionate corrections for primary waves 2 and 4. This resolves a previous major problem with the bullish wave count.

Cycle wave II now fits as a double flat. However, a problem arises with the relabelling of this structure. Within the first flat correction labelled primary wave W, this wave count now needs to ignore what looks like an obvious triangle from July to September 2016 (this can be seen labelled as a triangle on the bear wave count above). This movement must now be labelled as a series of overlapping first and second waves.

Within the first flat correction labelled primary wave W of the double flat of cycle wave II, intermediate wave (B) is 1.69 the length of intermediate wave (A). This is longer than the common range of up to 1.38, but within an allowable guideline of up to 2. The length of intermediate wave (B) reduces the probability of this wave count.

Cycle wave III may now be complete. Cycle wave IV may have just begun, and it may not move into cycle wave I price territory below 1,303.51.

DAILY CHART

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Cycle wave IV may end within the price territory of the fourth wave of one lesser degree. Primary wave 4 has its territory from 1,556.11 to 1,446.68. Within this territory is the 0.382 Fibonacci ratio of cycle wave III at 1,486.64.

Cycle wave IV would most likely subdivide as a zigzag. This is the most common Elliott wave corrective structure, and it would provide alternation with the double combination of cycle wave II.

HOURLY CHART

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Hourly charts are again essentially the same.

TECHNICAL ANALYSIS

WEEKLY CHART

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After an upwards trend reached very extreme and RSI reached overbought then exhibited bearish divergence, a very strong bearish candlestick reversal pattern should be given weight. A trend change here now looks extremely likely.

DAILY CHART

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An extremely strong bearish candlestick for Friday gives confidence that a sustainable high now looks likely to be in place. 

Do not expect price to continue to move in a straight line. There will be bounces and consolidations along the way. If price reaches an area of support when Stochastics reaches oversold, then expect a bounce. 

Bounces in a downwards trend are opportunities to join the trend.

GDX WEEKLY CHART

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GDX has had a trend change. Look for bounces and consolidations to possibly arrive about identified support areas.

GDX DAILY CHART

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A target calculated from the measuring gap is at 23.34. The gap may provide resistance at 28.14.

Published @ 11:33 p.m. EST.

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New updates to this analysis are in bold.

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