A small range downwards day sees price move lower, which the main Elliott wave count had expected.

Summary: The bounce is expected to be over as most likely.

If price makes a new high above 1,701.61, then a target for upwards movement to end would be at 1,780 to 1,795.

Grand SuperCycle analysis is here.

Monthly charts were last updated here.

MAIN 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.

DAILY CHART

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Super Cycle wave (b) may be complete.

The second zigzag in the double, labelled cycle wave y, may be complete. There is no Fibonacci ratio between primary waves A and C.

Within Super Cycle wave (c): intermediate waves (1) and now (2) may be complete. If intermediate wave (2) continues higher, then it may not move beyond the start of intermediate wave (1) above 1,701.61.

HOURLY CHART

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Intermediate wave (2) may now be a complete double zigzag. The second zigzag in the double labelled minor wave Y may be complete.

A channel is drawn about minor wave Y. The lower edge of this channel needs to be breached for confidence that a high is in place. The channel is drawn using Elliott’s technique for a correction. Price is now back within the channel and finding resistance at the upper edge. The channel has not yet been breached. It must be accepted that intermediate wave (2) may continue higher while price remains within this channel. The invalidation point must remain the same. 

ALTERNATE DAILY CHART

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If the main wave count is invalidated by a new high above 1,701.61 on Barchart data, then this alternate may then be used.

It is possible that Super Cycle wave (b) may continue higher as a triple zigzag. However, triple zigzags are reasonably rare structures. The rarity of this structure means that this wave count has a low probability, but low probability does not mean no probability.

Cycle wave z for this wave count must subdivide as a zigzag. Within the zigzag: primary wave A may be a completed five wave impulse and primary wave B may not move beyond the start of primary wave A below 1,453.26.

ALTERNATE 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 be complete. Cycle wave IV may not move into cycle wave I price territory below 1,303.51.

DAILY CHART

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Cycle wave III may be complete. Cycle wave IV may not move into cycle wave I price territory below 1,303.51.

Cycle wave II was relatively deep at 0.55 of cycle wave I. If cycle wave IV exhibits alternation in depth, it may more likely be shallow; the first target at 0.382 of cycle wave III would be preferred.

Cycle wave II was a very long lasting double combination. It lasted 119 weeks. Cycle wave IV may most likely be a zigzag, which tend to be quicker structures, but it would still be expected to last several months.

Within the zigzag of cycle wave IV: primary wave B may not move beyond the start of primary wave A above 1,701.61. A new high above this point would indicate cycle wave IV may not be a zigzag; it may then be relabelled as a flat, combination or triangle.

HOURLY CHART

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Both hourly charts are essentially the same at this time.

ALTERNATE DAILY CHART

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It is also possible that cycle wave IV may subdivide as a flat correction, triangle or combination. Both a flat and triangle would still provide structural alternation with the combination of cycle wave II.

If cycle wave IV subdivides as a flat correction, then within it primary wave B may make a new high above the start of primary wave A at 1,701.61. The common range for primary wave B within a flat would be from 1 to 1.38 times the length of primary wave A.

If cycle wave IV subdivides as a triangle, then within it primary wave B may make a new high above the start of primary wave A as in a running triangle. 

There is no upper invalidation point for this wave count.

TECHNICAL ANALYSIS

WEEKLY CHART

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

The last Bearish Engulfing pattern is extreme. The pattern fully engulfs the prior nine weekly candlesticks, and it has some support from volume. This strongly indicates a trend change after the upwards trend reached very extreme and conditions reached overbought and exhibited bearish divergence.

Price does not move in straight lines. Look out for bounces and consolidations on the way down. The first major bounce within a new trend for Gold is often very deep.

Last week completes an inside week with a red candlestick. Downwards movement within the week lacks support from volume.

DAILY CHART

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Overall, volume remains very light and does not support this upwards movement.

There is now another bearish reversal pattern with a long upper wick. Also, bearish divergence between price and all of On Balance Volume, RSI, Stochastics and MACD remains.

From time to time there are differences between StockCharts and Barchart data. Gold is a truly global market; there is no one data feed that incorporates all global data points. Different feeds will have differences because they incorporate different geographic data points. The technical analysis relies upon Stockcharts data, while the Elliott wave analysis relies upon Barchart data. As long as the Elliott wave analysis is consistent in using the same data feed each day and each week, then it will be valid for that data feed.

A very small range downwards day today leaves this analysis unchanged.

On Balance Volume must now break out tomorrow, which may provide a signal, although neither the resistance nor support lines have good technical significance.

GDX WEEKLY CHART

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There is support below in a zone about 16.75 to 15.85. Price has bounced up strongly again within this zone.

Further weakness in volume for another green weekly candlestick suggests upwards movement may be over here or very soon.

GDX DAILY CHART

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Price is consolidating with resistance about 27.20 and support about 23.00. A breakout from this range is required before confidence in a trend may be had.

Published @ 05:48 p.m. EST.

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New updates to this analysis are in bold.