Downwards movement was expected to end soon and be followed by upwards movement.
There was no more downwards movement. Price turned and moved higher.
Summary: Both wave counts expect upwards movement this week to make a new high above 1,112.19. The main bear wave count requires upwards movement to a minimum at 1,125.13. The target for the alternate bull wave count is at 1,158.
New updates to this analysis are in bold.
Last published weekly charts with the bigger picture are here.
MAIN BEAR ELLIOTT WAVE COUNT
Click chart to enlarge.
Gold has been in a bear market since September 2011. There has not yet been confirmation of a change from bear to bull, so at this stage any bull wave count would be trying to pick a low which is not advised. Price remains below the 200 day moving average and below the cyan trend line. The bear market should be expected to be intact until we have technical confirmation of a big trend change.
That technical confirmation would come with a breach of the upper cyan trend line by at least one full daily candlestick above and not touching the line. A new high above 1,191.37 would provide full and final price confirmation.
The final line of resistance (cyan line copied over from weekly charts) is only overshot and not so far properly breached. Simple is best, and the simplest method to confirm a trend change is a trend line.
Minute wave ii is a complete zigzag and deep at 0.73 the length of minute wave i.
At 941 minute wave iii would reach 1.618 the length of minute wave i.
Minuette wave (i) is complete.
Minuette wave (ii) looks like a fairly typical expanded flat correction which may end about the 0.618 Fibonacci ratio at 1,135.
There are two structural possibilities for a C wave within a flat correction: either an impulse or an ending diagonal. Because the impulse is now invalidated with the fourth wave overlap into first wave price territory, that leaves only one possible structure for subminuette wave c, an ending expanding diagonal.
All the subwaves must subdivide as zigzags within an ending diagonal. I have checked subdivisions on the hourly chart and both micro waves 1 and 3 can be seen as zigzags. The fourth wave must overlap back into first wave price territory within a diagonal. The rule for the end of the fourth wave is it may not move beyond the end of the second wave. Micro wave 4 may not move below 1,058.42.
The diagonal must be expanding because micro wave 3 is longer than micro wave 1, and micro wave 4 is longer than micro wave 2. The trend lines must diverge.
There is still the possibility that minuette wave (ii) could be labelled as complete at the last high. If it was over, then the only structure I can see which would fit is a double combination. But double combinations are sideways structures; they should not have a slope against the trend one degree higher. This correction has a clear slope. For that reason I still do not want to publish this idea because the probability is too low. I will only publish it if price breaks below 1,058.42.
Click chart to enlarge.
Micro wave 5 upwards is underway and must subdivide as a zigzag.
The diagonal is expanding, so micro wave 5 must be longer than micro wave 3. Micro wave 5 would reach equality with micro wave 3 at 1,125.13. It must end above this point.
The target will remain the 0.382 Fibonacci ratio at 1,135. The cyan line, the final bear market trend line on the daily chart, should provide strong resistance for this wave count.
It is not possible to see submicro wave (A) complete at Friday’s high. From the start at 1,071.37 to Friday’s high, this structure will not subdivide as a five wave impulse and meet all Elliott wave rules. The third wave within it would be the shortest, violating a core rule.
Sideways movement looks like a triangle which is most likely minuscule wave 4.
The breakout should be upwards for minuscule wave 5 when the triangle is complete.
Fifth waves following fourth wave triangles for Gold are sometimes surprisingly quick and short. The fifth wave would not be truncated as soon as Gold makes a new high above 1,097.16. When the breakout is 9.12 in length, then minuscule wave 5 would be equal in length with minuscule wave 1 and it would be a short fifth wave.
Submicro wave (B) should unfold downwards when submicro wave (A) is a complete five wave structure. If it gets that low, it should find strong support at the lower 2-4 diagonal trend line. Submicro wave (B) may not move beyond the start of submicro wave (A) at 1,071.37. It should show up on the daily chart as a red candlestick, so should last at least one day.
ALTERNATE BULL WAVE COUNT
Click chart to enlarge.
This was published here as a second alternate wave count. I will use it as the only regular alternate bull wave count because it is the only bull wave count to meet all Elliott wave rules.
I want to remind members that last time Gold saw a reasonable upwards movement from 24th July, 2015, to 15th October, 2015, there were many who expected that rise meant the bear market had ended and a new bull market had begun. It turned out that idea was premature: price turned around and made new lows. On 21st August I developed three bullish wave counts, partly in response to a demand from members, and one by one they have all been eliminated.
Now, again, price rises and there is a demand for bullish wave counts.
It is my strong view that this is premature. I will publish this wave count with that strong caveat.
Eventually the market will change from bear to bull, and when that change is confirmed that is the time to have confidence in a bull wave count. That time is not now.
Price remains below the 200 day moving average. Price has made a series of lower highs and lower lows down to the last recent low. There is not a clear five up on the daily chart. Price remains below the bear market trend line. While price remains below that line this wave count will be an alternate and comes with a strong warning that it is premature.
Downwards movement from the all time high for this bull wave count is seen as a big double zigzag which would most likely be complete at super cycle degree for an A wave.
When an A wave subdivides as a three, then the larger structure may be either a flat or triangle. The B wave may make a new price extreme beyond the start of the A wave within flats and triangles. Here, super cycle wave (b) may move above 1,920.18 as in an expanded flat or running triangle.
When the first move of a larger correction subdivides as a multiple (w-x-y), then a combination may be eliminated. Combinations may not have multiples within multiples, because that would increase the number of corrective structures within a multiple beyond three and violate the rule.
A new wave up at super cycle degree must begin with a clear five up on the daily chart (and probably the weekly as well). So far only minor waves 1 and 2 are complete. At 1,227 minor wave 3 would reach 4.236 the length of minor wave 1.
Minute waves i and ii are complete within minor wave 3. The acceleration channel is not working, so a more conservative base channel is drawn about these two waves. Copy it over to the hourly chart. A lower degree second wave correction for minuette wave (ii) should not breach a base channel drawn about a first and second wave one or more degrees higher. The lower pink line should provide support, if this wave count is correct.
Minuette wave (ii) may not move beyond the start of minuette wave (i) below 1,059.35.
Click chart to enlarge.
This wave count now sees a third wave up at three degrees in the very early stages. Upwards momentum should increase this week as new highs are made. Minuette wave (iii) must move above the end of minuette wave (i) above 1,112.19.
At 1,158 minuette wave (iii) would reach 1.618 the length of minuette wave (i). If price keeps rising through this first target, or if when price gets there the structure is incomplete, then the next target would be at 1,212 where minuette wave (iii) would reach 2.618 the length of minuette wave (i).
The first wave of subminuette wave i is incomplete within minuette wave (iii). When it is done, then subminuette wave ii may not move below the start of subminuette wave i at 1,071.37.
Micro wave 4 may be a triangle within subminuette wave i.
The final line of support for this wave count should be the lower edge of the base channel.
There is still no divergence between expected direction for both wave counts in the short to mid term.
TECHNICAL ANALYSIS
Click chart to enlarge. Chart courtesy of StockCharts.com.
Note: Stockcharts does not have data for Monday due to NY being closed.
This regular TA is unchanged by Monday’s small doji.
Volume for Friday’s green daily candlestick is slightly lighter than the prior downwards day. This gives a slight doubt to the wave count; the upwards movement in price was not well supported by volume. If another upwards day comes with a clear increase in volume, more confidence may be had in the Elliott wave analysis.
Since the last low of 3rd December, as price has risen it has done so on increasing volume. Overall sideways movement from 4th December to 31st December came on overall declining volume. Thereafter, as price broke above resistance on 6th January, the rise in price to the next high came on increasing volume.
The last fall in price from 8th to 14th January came on a decline in volume.
Overall, the volume profile from the last low of 3rd December is bullish and overall supports the Elliott wave analysis.
On Friday price found support about 1,076, a previous area of resistance. If the analysis is correct, then this price point should hold.
ATR indicates price is most likely trending as it is increasing, but ADX disagrees as it is declining. ADX has not indicated a trend change as the +DX line remains above the -DX line. If the black ADX line turns upwards, then it would indicate the market is again trending and the trend would be up.
Neither RSI nor Stochastics are overbought or oversold. There is room for this market to move up… or down. Volume indicates it is more likely to move upwards.
This analysis is published @ 06:08 p.m. EST.
This upwards movement is either a C wave or third wave.
I’ll now move the invalidation point on the hourly chart up to 1,082.74.
IMHO raising the invalidation point may be premature. Seems like a C wave could move slightly lower, yet remain intact.
Meant to say, this leg of the C wave could move lower first.
Too much uncertainty. 3rd waves up are longest and strongest. Not a 3 wave. This is a weak showing . Dont know what to call it ,but I am reducing my upward exposure. GL
Lara,
Thanks for the update.
This sideways movement is just too large to be a fourth wave correction.
This is either submicro (B) for the main count, or subminuette ii for the alternate.
The prior upwards movement must be seen as a five. While that just won’t work at the hourly timeframe it will work on the five minute time frame. There may have been a series of small quick fourth wave corrections at the top of the wave.
Sometimes a wave isn’t clear at all time frames. I chose to rely on the hourly timeframe here. That hasn’t worked.
The structure of this sideways correction looks like it is now complete, although I’m struggling with the position of the triangle in there. Figuring that out may take some time.
With (A) – (B) complete now a target for (C) would be 2.618 X (A) = 1,150. But because that would take price above the final bear market trend line I will leave the target as it is: the 0.618 Fibonacci ratio at 1,135. And expect price to find resistance at the bear market trend line.
For the bull wave count I would still expect resistance at that line, and a correction there, but then price should breach resistance after that.
Thanks Lara.
I’m in GDX and will hold for the 1,135 area target for 5 c (ii)
HUI hits at least a 5 year low of 99.33
http://stockcharts.com/h-sc/ui
GDX 1,3,5,15 minute all MACD BUY in TOS now finally today.
Perhaps GDX bottomed at 12.44?
Hi Lara, GDX is hitting all time low today. Please let us know if you have updated the counts for it. Thanks
I have not but I will if and when I find the time today or tomorrow.
It will probably be charts only for members only.
Wave counts will no doubt need to be reworked. Sideways movement has dragged on for too long.
Unless there is a strong move within the next 48 hours, I am leaning toward a prolonged ABC movement with the A wave complete at 1112.
This rattlesnake is getting ready to STRIKE IMHO.
Agreed. I’m 80% in such camp of an ABC completed. Give it two more days to confirm such escenario.
Yes. The duration is more like submicro (B) or subminuette ii than a fourth wave correction.
My problem is the prior upwards wave, trying to see that as a complete five.
If it has a slightly truncted fifth then on the five minute chart it will work.
But at the hourly chart level if you try to label that as an impulse then the third wave within it is the shortest, and the fourth overlaps first wave territory. Two rules are violated.
I think that move should be viewed on a lower time frame. The hourly time frame is not clear.
GDX hit at least a 5 year low at 12.57 today and I bought some at 12.66.
Previous low Sept 11th, 2015 at 12.62
GDX just hit 12.62 I think the year low double bottom.
To hit a 5-year low is very bearish, so buying GDX now seems to me a very risky proposition. It could be the case that GDX is already in the third wave down…..will negate if in the nex t couple of days (at the most), reverses this lower low….as for me, loading up more DUST.
Thanks for your advice. GDX is at an extreme low right now and DUST is at an extreme high on many indicators so they can change direction any minute now.
GDX is now a BUY on MACD 1,3, 5 and soon maybe 15 minutes.
Below $12.81 in GDX (November low), the pressure is down. I’d give it the benefit of the doubt for the next 2 days to negate it (in case I will buy more DUST anyways). As for now, any bounces in GDX are opportunities to load up more DUST.
Stock market is moving up and gold down.
Yes, and soon market will be DOWN and Gold UP.
Oscar On gold at 8.30 minute marker
https://www.youtube.com/watch?v=_sPTNzMqeKA
The idea that we have been in a simple triangle for a wave 4 was invalidated with a downwards break. That said, we could still be in a more complex wave 4 as long as we stay above the wave 1 top at 1,080.40 ish.
Wave 4 triangle is in the process of completing now at E (1084). A,B,C and d are complete.
Am I correct????
I think the correction has morphed into a combination and it’s likely almost complete. I also think that since it has taken so long, it looks a little out of proportion as a 4th wave. We may find that this ends up being the b wave of the last leg up for the diagonal (main count) or a 2nd wave for the alternate. Need to see how high it goes after the correction ends.
With an inside week H 1108 / L 1071 followed by a narrow range inside day (H 1093/ L 1087 ), I guess a breakaway can be expected to follow any day…. Sentiment: Gold price is encountering resistance in range 1098-1108 and expecting it to top this week within this range…. lets see…. (Gold price is above the moving averages 20dma/50dma which gives it bullish bias)
Lara,
In the third paragraph, below the main hourly chart, you meant to write “The target will remain the 0.618 Fibonacci ratio at 1,135.” You wrote 0.382. You’ve had that in there for a couple days, but I am sure that your subscribers knew what you meant.
Yes Matt you are right that is what she meant.
Under main wave daily chart above Lara wrote:
“Minuette wave (i) is complete.
Minuette wave (ii) looks like a fairly typical expanded flat correction which may end about the 0.618 Fibonacci ratio at 1,135.”
Oh goodness, yes. I am sorry and will fix it.