An outside session closes green with support from volume.

Two short-term Elliott wave counts are considered for tomorrow’s session.

Summary: The first wave count is bearish for the bigger picture and classic technical analysis supports this view. This wave count expects a multi-year bear market may be in its early stages to end below 1,046.

For the very short term, a new low below 1,723.88 would increase confidence that an upwards bounce may be over. Alternatively, it may continue towards 1,803.

The next short-term target is still at 1,647 or 1,634. A long-term target is at 657.

The second wave count is bullish. A new upwards wave may now have begun. The target is at 2,124.

Grand SuperCycle analysis and last monthly charts are here.

FIRST ELLIOTT WAVE COUNT

WEEKLY CHART

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The bigger picture for this first Elliott wave count sees Gold as now within a bear market, in a three steps back pattern that is labelled Grand Super Cycle wave IV on monthly charts. Grand Super Cycle wave IV may be subdividing as an expanded flat pattern.

Super Cycle wave (b) within Grand Super Cycle wave IV may be a complete double zigzag. This wave count expects Super Cycle wave (c) to move price below the end of Super Cycle wave (a) at 1,046.27 to avoid a truncation and a very rare running flat. The target calculated expects a common Fibonacci ratio for Super Cycle wave (c).

DAILY CHART

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Within a new bear market, cycle wave I may be an incomplete five wave impulse.

Cycle wave II within the new downwards trend may not move beyond the start of cycle wave I above 2,070.48.

Gold typically exhibits extended and strong fifth waves; this tendency is especially prevalent for fifth waves to end third wave impulses one degree higher. One or both of minor wave 5 or intermediate wave (5) may exhibit this tendency; there may be one or more selling climaxes along the way down. Minute wave iv and minor wave 4 may be relatively brief and shallow.

Draw an acceleration channel about downwards movement. Draw the first trend line from the end of primary wave 1 to the last low, then place a parallel copy on the end of primary wave 2. Keep redrawing the channel as price continues lower. When primary wave 3 is complete, then this would be drawn using Elliott’s first technique and may show where primary wave 4 may find resistance.

Minute wave iv may be complete as a regular flat.

If it continues higher, then minute wave iv may not move into minute wave i price territory above 1,766.53.

HOURLY CHART

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Minute wave v within minor wave 3 may have begun. Minuette wave (ii) within minute wave v may not move beyond the start of minuette wave (i) above 1,757.92.

A base channel is drawn about the start of minute wave v. The upper edge may show where bounces find resistance.

A new low below 1,723.88 would add confidence to this wave count.

ALTERNATE DAILY CHART

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It is also possible that the flat correction may be labelled one degree higher. It may be minor wave 4.

Minor wave 4 may not move into minor wave 1 price territory above 1,849.22.

If the first daily chart is invalidated with a new high above 1,766.53, then this alternate would become the main wave count.

ALTERNATE HOURLY CHART

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It is possible that minor wave 4 may not be complete. Minute wave c may be extending higher. A target is calculated for it to end.

Minute wave c must subdivide as a five wave motive structure. Within minute wave c: Minuette waves (i) and (ii) may be complete, and minuette wave (iii) may only subdivide as an impulse.

Subminuette wave ii within minuette wave (iii) may not move beyond the start of subminuette wave i below 1,723.88.

SECOND 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.

Cycle wave II fits as a double flat. However, within the first flat correction labelled primary wave W, this wave count needs to ignore what looks like an obvious triangle from July to September 2016 (this can be seen labelled as a triangle on the second weekly chart on prior analysis here). This movement must be labelled as a series of overlapping first and second waves. Ignoring this triangle reduces the probability of this wave count in Elliott wave terms.

Cycle wave IV has moved lower; it may again be a complete triple zigzag. The rarity of triple zigzags reduces the probability of this wave count further.

If the third zigzag of primary wave Z continues lower, then cycle wave IV may not move into cycle wave I price territory below 1,303.51.

DAILY CHART

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Cycle wave IV may be a complete triple zigzag.

The purpose of multiple zigzags is to deepen a correction when the first zigzag does not move price deep enough. To achieve this purpose multiple zigzags normally have a clear counter trend slope. Cycle wave IV looks normal with a clear downwards slope.

A target is recalculated for cycle wave V. If cycle wave IV continues lower, then this target must again be recalculated.

A best fit channel is drawn about cycle wave IV. If this channel is breached by upwards movement with at least one full daily candlestick above and not touching the upper edge of the channel, then that may provide confidence in this second Elliott wave count.

HOURLY CHART

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Intermediate wave (3) may now have begun. Within intermediate wave (3): Minor waves 1 and 2 may be complete, and minor wave 3 may have begun.

Within minor wave 3: Minute wave i may be nearing completion, and minute wave ii may not move beyond the start of minute wave i below 1,723.88.

TECHNICAL ANALYSIS

WEEKLY CHART

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There is a series of lower swing lows and lower swing highs from the last all time high in August 2020. Downwards movement is now beginning to have a steeper slope. ADX now indicates a downwards trend at the weekly time frame.

Neither ADX nor RSI are extreme. There is plenty of room for a downwards trend to continue.

A downwards trend should now be the dominant view until the trend reaches extreme and then a bullish candlestick reversal pattern is seen.

This chart supports the first Elliott wave count.

Within the prior upwards trend, the last major swing low is the week beginning June 1, 2020, at 1,671.70. So far price has not made a new low below this point. If price does make a new low below 1,671.70, then the view of a new downwards trend would be strengthened.

Following a Hammer candlestick pattern, last week completes a small range upwards week that lacks support from volume. This looks like a small counter trend movement.

DAILY CHART

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ADX may reach very extreme (over 45 and above both directional lines) before a trend in this market may end. It is currently declining, indicating no clear trend. But if it again increases, then it would again indicate an extreme downwards trend.

An increase in volume for a session that has closed green is bullish for the short term. It is possible that the bounce may not be complete.

GDX WEEKLY CHART

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For GDX the last major swing low within the prior upwards trend is the low at 31.06 in the week beginning June 1, 2020. GDX has made a slight new low below this point. This is significant and supports the view that GDX may have had a trend change.

For confidence in a Morning Star reversal pattern the third candlestick should have support from volume. This one does not, so confidence may not be had in this pattern.

Weak volume for the last upwards week suggests this may be another counter trend bounce.

GDX DAILY CHART

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ADX now indicates a new upwards trend. This is possible, but volume is so far not supporting upwards movement; for confidence in an upwards trend to be sustainable, it should have support from volume.

Today, with volume pushing price higher, GDX now looks bullish for the short term.

Published @ 08:14 p.m. ET.

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1. Always trade with stops.

2. Risk only 1-5% of equity on any one trade.

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New updates to this analysis are in bold.