Upwards movement was expected for Monday’s session but did not happen. The hourly Elliott wave count was invalidated by downwards movement.
Summary: Volume still supports a bullish wave count. Upwards movement should continue from here or very soon. The target remains at 1,477 and risk remains at 1,237.97.
New updates to this analysis are in bold.
Last published weekly chart is here.
DAILY ELLIOTT WAVE COUNT
Click chart to enlarge.
Intermediate wave (2) may be a double combination.
Minor wave W is a zigzag, the first structure in a double. The two structures in the double may be joined by a simple zigzag for minor wave X in the opposite direction.
Minor wave Y may be a running contracting triangle. The triangle is supported by MACD hovering at the zero line here on the daily chart.
Minor wave 2 may not move beyond the start of minor wave 1 below 1,237.97.
The next wave up for intermediate wave (3) should be swift and strong. It must move above the end of intermediate wave (1) at 1,282.68. It must move far enough above this point to allow room for intermediate wave (4) to unfold and remain above intermediate wave (1) price territory.
At 1,477 it would reach equality in length with intermediate wave (1). This target is reasonable because intermediate wave (2) was very shallow.
If intermediate wave (2) is over as labelled, then it may have totalled a Fibonacci 34 sessions.
Minor wave 2 has moved lower and is now 0.645 the depth of minor wave 1. This is close to the 0.618 Fibonacci ratio, so again it is likely that minor wave 2 is over here but not yet confirmed. Minor wave 1 lasted two days. Minor wave 2 now has lasted a Fibonacci five days. If it is over here, it would have good proportion and look like a clear three wave structure on the daily and hourly charts.
HOURLY ELLIOTT WAVE COUNT
Click chart to enlarge.
Minor wave 2 fits as a zigzag. Minute wave a must be seen as a five wave structure. This will fit although it does seem a little forced.
Minute wave c is 2.04 longer than equality in length with minute wave a. Minor wave 2 is just slightly below the 0.618 Fibonacci ratio. The structure looks overall like a big three wave movement. At this stage, the probability that it is over here or will be very soon is high.
Below, in order, are four points members may look for to have confidence in the next wave up having begun. Depending upon risk appetite one or more of the below points may be required before a long position may be entered. Alternatively, for the more adventurous a long position may be entered here. Stops must be set just below 1,237.97. Give the market a little room to move; it is possible still that minor wave 2 may move lower.
1. So far minute wave c fits neatly within a channel. A breach of this channel would indicate that minute wave c is most likely to be over. The channel breach may be followed by a throwback to support at the lower pink line.
2. A wide pink channel is drawn about the entire zigzag. When the upper edge of the pink channel is breached, that shall provide final trend channel confirmation of a trend change. If choosing to enter there, then a little patience and waiting for a small throwback to find support at the pink line may offer a better entry price.
3. Earliest price confidence may be had above 1,295.34.
4. Final price confirmation would come with a new high above 1,303.51.
At 1,367 minor wave 3 would reach 1.618 the length of minor wave 1. If this target is wrong, it may be too low. The next possible target would be at 2.618 the length of minor wave 1 at 1,433.
Minor wave 3 may only subdivide as an impulse. Within the impulse, minute wave i may begin about here. When it arrives minute wave ii may also be deep and may also be time consuming.
It would not be until the middle that acceleration to the upside may be expected to be clear for minor wave 3. The fourth wave corrections within it may be quick and shallow, and the fifth waves to end minor wave 3 and then the final fifth wave up of minor wave 5 also may be expected to be very strong movements, completing blowoff tops for Gold.
ALTERNATE DAILY ELLIOTT WAVE COUNT
Click chart to enlarge.
It is still possible that intermediate wave (2) is not over.
Normally, the first large second wave correction within a new trend is very deep, often deeper than the 0.618 Fibonacci ratio. The main wave count sees intermediate wave (2) as very shallow at only 0.19 of intermediate wave (1). This is unusual. And so this alternate must be considered.
If any members have long positions on Gold already it is essential that stops are used in case this alternate unfolds.
Intermediate wave (2) may be an expanded flat correction. Minor wave A is a three, minor wave B is a three and a 1.28 length of minor wave A. This is within the normal range of 1 to 1.38.
At 1,183 minor wave C would reach 1.618 the length of minor wave A. This would be the most likely target. If price keeps falling through this first target, then the second target would be at 1,108 where minor wave C would reach 2.618 the length of minor wave A.
Intermediate wave (2) may not move beyond the start of intermediate wave (1) below 1,046.27.
ALTERNATE HOURLY ELLIOTT WAVE COUNT
Click chart to enlarge.
Minor wave C must subdivide as a five wave structure. So far only minute waves i and ii may be complete.
Minute wave iii must subdivide downwards as an impulse. It would be unlikely to be over at the low for today because that does not allow enough room for upwards movement for minute wave iv to unfold and remain below minute wave i price territory.
Minute wave iii is most likely to be incomplete. Minuette wave (i) is a complete impulse. Minuette wave (ii) may now move higher, to end about the 0.618 Fibonacci ratio of minuette wave (i) at 1,282.
Thereafter, minuette wave (iii) must make a new low below the end of minuette wave (i).
Minuette wave (ii) may not move beyond the start of minuette wave (i) above 1,295.34.
TECHNICAL ANALYSIS
Click chart to enlarge. Chart courtesy of StockCharts.com.
Strong downwards movement for Monday is not supported by volume. Volume for Monday is lighter than the prior upwards day of Friday. The volume profile continues to be bullish: volume increases as price rises, and as price falls it does so on lighter and declining volume.
ADX is today slightly declining indicating the market may not be trending. This indicator is lagging as it is based on a 14 day average. ADX has not indicated a trend change. If the ADX line again turns upwards, an upwards trend would again be indicated.
ATR is increasing today indicating the market may be again trending.
On Balance Volume today strongly supports the fall in price to end here. OBV should serve to hold up the fall in price as OBV comes down to touch the blue line almost again. It depends on exactly how the line is drawn, so there is a little room for movement. If it is drawn to touch the last low for OBV, then it is almost perfectly touched today.
RSI is almost neutral. There is room for price to rise or fall.
Stochastics has returned from overbought. There is room again for price to rise.
Along the way up, the 13 day moving average may help to show where corrections find support. This does not always work for the earliest corrections within a new trend for Gold, but it is likely to work once the trend gathers momentum.
This analysis is published @ 07:59 p.m. EST.
Minor 2 may now be over, but we don’t have confirmation of that.
If it is over at the low of 10th May then it lasted six days to minor 1’s two days.
The proportions look good; minor 2 should be expected to be more time consuming than minor 1.
The depth looks good; minor 2 is now deeper than 0.618 of minor 1. This is common for the first second wave correction within a new trend.
Minute ii to come may also be longer lasting and deeper than minute i. We may see this pattern repeated at least once more.
When I have volume data from StockCharts finalised and do the classic technical analysis then I will be able to state how much weight I give the main wave count. So far up to yesterday the classic TA is overall bullish, and quite strongly so.
I will be now waiting to see a small five up on the hourly chart, followed by a three down. If I see that I will enter a buy on the three down and my stop must be just below 1,237.97. I must give the market room to move.
The alternate is still valid, but not supported by TA.
Lara, will there be any throwback to the pink line or has that already passed and gold will move much higher tonight and for Wednesday’s open?
“minute wave c channel breach may be followed by a throwback to support at the lower pink line.”
It could do. The current hourly candlestick is red… and that could be first hour of the throwback…
But the problem of course is that doesn’t mean it has to.
I will be waiting patiently for another entry. Stopped out of my prior buys.
There will be the first second wave correction to come. That should offer a good entry point. I will now want to see a clear five up and a three down on the hourly chart. That will give more confidence that minor 2 is over. Then I will enter on the three down, at the end of it.
That’s my plan anyway.
It means I may have to stay up late 🙁
Any idea when that 3 wave down might end?
Might that be tonight or maybe at the open Wednesday?
Stay up late drinking coffee and watching surfing videos.
Probably Wednesday.
So far I can see 1-2-3-4, the last hourly candlestick being 4.
So it still needs 5 up.
Then it can start a three down.
This would be minuette (i) within minute i within minor 3.
That’s a good idea! That’s probably what I’ll do. Hang out here and EWSM, and have watch surfing videos at the same time 🙂 Always makes me happy
This “Game” being played by the FED has gone on long enough . No way the dollar will stay up . The emperor has no clothes and the FED is naked. Look for gold to start its upward trajectory tonight. IMVHO Stephen C,. New London CT. I’m proud to be a Yankee from New London, Connecticut, USA, where we like living RIGHT, and being Free. In GOD and Gold we TRUST !
The FED will play games every week forever.
They can and will do so. Have you seen the debate with Donald Trump last week? He advocated printing money if he becomes President.
Volume may be low today. For GDX, this move up may just be a backtest of the trend line breach from yesterday.
1,256.91 at 10:29 am appears to have been the bottom of minor 2.
12:00 noon gold and the miners just started Firing off BUY at multiple time frames and at 1:00 pm lifted up and hit some upper level at 1:40 pm so far.
Appreciate your comment here and below. The 5th wave to end minor 2 kinda freaked me out! Can you tell. lol.
same here
It freaked me right out of my NUGT, darn. I kept my GDX.
Gold and GDX fired BUY for time frames as long as 39 minutes so far. Just the shorter times showed weakness pause on the rally top so far. Not sure when will get a big turn down?
Richard, if we are in a strong Minor 3, price will hardly turn down big. There will be small corrections here and there, and usually the second waves drop the most, and most commonly the first of the second waves. Once momentum is locked in, second wave corrections are usually minimal.
Look at it as a roller coaster ride but in reverse (i.e. rising instead of dropping). In the ride, the start is very slow, but once the train picks up momentum, it accelerates very quickly until it reaches its destination.
A perfect analogy Alan.
If the main wave count is correct, Minor 2 ended at 1256.91 at 10:25 am ET. Price took off and has completed or is nearly completing a third wave. It is too early to tell what degree it is. I still think that Minor 3 will be a 2.618 retrace, and this will take us there.
On the other hand, the alternate cannot be written off yet. I will stay neutral at the sidelines, putting in very small positions here and there, UNTIL PRICES RISE ABOVE 1280.84, which is minuette 2 of the alternate at 0.618. The failsafe point, 1303.51, is where the alternate is invalidated, and I will fully load up then.
If the price of NUGT is any indication, I think the overall sentiment is for a bullish continuation. NUGT rose from a low of 85.00 to 94+ even with the rise of a meagre $6+ in gold.
Alan , yes throw $6 dollars of a gold nuggets spike from a deep mine bottom and the miners start buying more within 1 hour and a buying frenzy in another hour.
Junior Gold Miners Ready to Shake Out Weak Hands (GDXJ, GDX)
By Alan Farley | May 10, 2016 — 11:37 AM EDT
http://www.investopedia.com/stock-analysis/cotd/051016/junior-gold-miners-ready-shake-out-weak-hands-gdxj-gdx-gdxj-gdx.aspx?partner=YahooSA
Any wave counts?
Was today’s low of 1,256.91 at 10:29 am a 5th wave down to end minor 2, finally?
It looks like it was the bottom of minor 2.
I believe minute c channel was breached at 10:00 pm EST last night with a possible throwback at 10:29 am EST breaching the support down to today’s low of 1,256.91.
“1. So far minute wave c fits neatly within a channel. A breach of this channel would indicate that minute wave c is most likely to be over. The channel breach may be followed by a throwback to support at the lower pink line.”
Lara does this downward movement [1262.70 – 1259.08] 7:20am on 5-min chart look like minuette iii of the alternate hourly?
Price has answered your question. A new high means it can’t be.
Dollar hits highest level against yen since BOJ surprise
May 10, 2016 9:50 a.m. ET
Chinese yuan weakens to levels last seen in late March
http://www.marketwatch.com/story/dollar-hits-two-week-high-against-yen-as-japan-keeps-up-the-rhetoric-2016-05-10
The dollar rose Tuesday to its highest level against the yen in two weeks after Japan’s finance minister said warnings from U.S. Treasury officials wouldn’t stop Japan from trying to weaken its currency by selling yen in the open market.
I really hope gold goes up from here at 9:48 am EST GDX and NUGT morning lows.
I’m hoping the GDX and NUGT highs at 9:30 am will be surpassed today.
Watch U.S. Dollar…Up dollar down gold/Gdx. Although the dollar is into downward trendline. As a trader, I’ll always take the opposite side of a crowded trade. Happy trading to all.
Yes, key decision point now for $USD
Here’s a look at GDX on Stockcharts. OBV is near short term support. If that trend line is breached, OBV could continue down to the lower trend line. Down volume was very strong today, suggesting more down to come.
On the positive side, the last trend line breach only had one red candle before going up.
and that breach too was on high volume, yet price kept going up for new highs
curious
There are still a few concerns that the correction in GDX is not complete. Volume was strong for today’s down day and the trend line was breached. Also, the C wave has not made a new low below the end of the A wave. The chart shows some possible targets for an ABC correction to complete. This seems to contradict with the main gold count.
Dreamer, Love the charts, full of insight, well done, thank you.
Glad you find them helpful. Thanks,
Syed, You mentioned earlier Monday, “Should 1260 not hold will open up downside risk 1252.” Gold just held at 1,259.95 at 8:16 pm. I hope it is solid like a rock there.
Hi Richard. IMHO Gold price is top heavy under 1265/pivot and could likely seek 1280 before a pullback (short term decline) is expecting for target 1253/1248…. Lets see how this plays out…