GOLD: Elliott Wave and Technical Analysis | Charts – March 4, 2020
A small range day leaves all three Elliott wave counts unchanged.
Summary: The bear market may have resumed for Gold to eventually make new lows below 1,046.27. For the short term, a bounce may be over.
The alternate bullish wave count now expects a cycle degree fourth wave may have just begun.
If price makes a new high by any amount at any time frame above 1,687.92, then a target for upwards movement to end would be at 1,736.
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.
Intermediate wave (1) may have completed in four days. Intermediate wave (2) may be over as a quick sharp bounce.
The first large second wave correction for a new trend in Gold is usually very deep and time consuming. Intermediate wave (2) may be very deep, although so far it is not very time consuming.
HOURLY CHART
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This hourly chart shows detail of intermediate wave (1).
Intermediate wave (1) may have a typical curved look. Intermediate wave (2) may be over as a quick sharp bounce.
A channel is drawn about intermediate wave (2). Minor wave C has breached the upper edge. This is typical of some C waves; they can be strong. If the channel is breached by downwards movement, then that may indicate the bounce of intermediate wave (2) is over and intermediate wave (3) downwards may have begun. At that stage, a target may be calculated for intermediate wave (3).
It must be accepted that while price has not breached the channel intermediate wave (2) could continue higher as a double zigzag. Intermediate wave (2) may not move beyond the start of intermediate wave (1) above 1,687.92.
ALTERNATE DAILY CHART
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Alternatively, it remains possible that Super Cycle wave (b) may not be over. If the degree of labelling within intermediate wave (5) of primary wave C is moved down one degree, then at the last high only minor wave 1 of intermediate wave (5) may have been complete.
Minor wave 2 may be a complete zigzag. At the daily chart level, this does look best as a three wave structure.
Minor wave 2 may not move beyond the start of minor wave 1 below 1,562.37.
A target is calculated for primary wave C to end. If price makes a new high above 1,687.92 by any amount at any time frame, then this alternate would become the main wave count.
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 charts are again essentially the same, so only one will be published today.
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.
A continued lack of support from volume for upwards movement suggests this bounce may be a counter trend movement.
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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For the short term, some more upwards movement may unfold here, indicated by a bullish long lower wick. It may be limited though, as indicated by weak volume.
Published @ 06:57 p.m. EST.
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New updates to this analysis are in bold.
At the hourly chart level it looks like this wave up is unfolding as an impulse.
At the daily chart level it looks like the last wave down was a zigzag.
That would favour the alternate wave count.
A sustainable high may not yet be in. Conditions remain extreme. A high will come, but it may not be in yet.
Ending diagonal?
Inverse head and shoulders in play though ?
Alternate Daily in play now.
I’m flying to Panama tomorrow and so won’t be able to update the hourly chart prior to the NY close.
Thank you all for your understanding.
Turns out I arrived in good time…