Price has moved slightly below the target on the alternate hourly wave count, which was at 1,244. The next 24 hours should provide clarity.
Summary: If upwards movement breaks above the channel on the hourly chart, then the main wave count should be used. A low may be in place and long positions should be entered with stops just below the last low.
If the next session prints a red daily candlestick below the base channel on the main daily chart, then the weekly alternate will become the new wave count and Gold would be expected to be in a new downwards trend to new lows.
New updates to this analysis are in bold.
Grand SuperCycle analysis is here.
Last monthly and weekly charts are here.
MAIN ELLIOTT WAVE COUNT
DAILY CHART – DETAIL
Click chart to enlarge.
This chart steps back to see all movement since the important low on the 3rd of December, 2015.
To see how this fits into the bigger picture, please see the last historic analysis linked to at the start of this analysis.
The first upwards movement labelled primary wave 1 fits well as a five wave impulse. Primary wave 2 fits as a zigzag. It would be difficult to see the downwards wave of primary wave 2 as an impulse because that would require ignoring what looks very much like a triangle at its start (labelled intermediate wave (B) ). To see this as an impulse that movement would need to be a second wave correction, but second waves do not subdivide as triangles.
Primary wave 3 should have begun. Within it intermediate waves (1) and (2) should be complete. Intermediate wave (2) is a very common expanded flat correction.
The middle of this big third wave looks unlikely to have passed, so it is still ahead.
A cyan trend line is added to all charts. Draw it from the high in October 2012 to the high in July 2016. This line has been tested five times. Price is finding resistance at the cyan trend line now. If price can break through resistance here after some consolidation, then that may release energy to the upside for the end of minor wave 3.
DAILY CHART
Click chart to enlarge.
This daily chart will suffice for both weekly charts, which can be seen in the last published historic analysis.
Upwards movement at primary degree is either a third wave (first weekly chart) to unfold as an impulse, or a Y wave (second weekly chart) to unfold as a zigzag. If upwards movement is a zigzag for primary wave Y, then it would be labelled intermediate waves (A) – (B) and now (C) to unfold. It is most likely a third wave because cycle wave a is most likely to subdivide as an impulse.
Intermediate wave (1) or (A) is a complete five wave impulse lasting 39 days. Intermediate wave (2) or (B) looks like an expanded flat, which is a very common structure.
Price has moved lower today below the target on yesterday’s alternate at 1,244. So far price is 7.19 below that target and has overshot the lower edge of the base channel. If this main wave count is right, then the low must be in for Gold. A third wave at three degrees must begin here, and tomorrow must see a green daily candlestick for Gold.
Minor wave 2 may not move beyond the start of minor wave 1 below 1,195.22. However, if the base channel provides support, price should not get close to this invalidation point. Only if the base channel is breached by a full daily candlestick below and not touching the lower edge would a bearish wave count be considered.
The gold best fit channel about minor wave 2 is shown on the daily chart today, so that members may see how it is drawn.
HOURLY CHART
Click chart to enlarge.
The base channel is breached at the hourly chart level, but for this wave count to be discarded or revert to an alternate it must be properly breached at the daily chart level. The lower edge of the channel has been slightly breached on the hourly chart before; this line is not perfectly showing where support is (only a general area). The overshoot on the daily chart is a little concerning but not enough to discard this wave count.
The structure of minor wave 2 as a complete double zigzag may again be seen as complete. Today’s downwards movement may be a selling climax at the end of the pullback.
For confidence that a low is in place, members may want to wait to see if price can break above the upper edge of the channel on this hourly chart.
If price continues lower from here for the next 24 hours, then the base channel on the daily chart would be breached and the alternate weekly chart below would become the new main wave count.
ALTERNATE WEEKLY CHART
Click chart to enlarge.
Primary wave 2 may be complete as a double zigzag.
If a full daily candlestick is printed below the lower edge of the base channel on the main daily Elliott wave count, then this alternate would be the new main wave count.
If price makes a new low below 1,195.22, then this alternate would be considered confirmed.
TECHNICAL ANALYSIS
WEEKLY CHART
Click chart to enlarge. Chart courtesy of StockCharts.com.
There are a lot of assumptions out there about Gold and its relationships to various other markets. Happily, there is a quick and easy mathematical method to determine if Gold is indeed related to any other market: StockCharts have a “correlation” option in their indicators that shows the correlation coefficient between any selected market and the one charted.
The correlation coefficient ranges from -1 to 1. A correlation coefficient of 1 is a perfect positive correlation whereas a correlation coefficient of -1 is a perfect negative correlation.
A correlation coefficient of 0.5 to 1 is a strong positive correlation. A correlation coefficient of -0.5 to -1 is a strong negative correlation.
Any two markets which have a correlation coefficient that fluctuates about zero or spends time in the 0.5 to -0.5 range (shown by highlighted areas on the chart) may not be said to have a correlation. Markets which sometimes have a positive or negative correlation, but sometimes do not, may not be assumed to continue a relationship when it does arise. The relationship is not reliable.
For illustrative purposes I have included the correlation coefficient between Gold and Silver, which is what strong and reliable correlation should look like.
Volume for last week suggests the downwards movement is a pullback, and it may still continue further as volume remains fairly heavy.
Gold has made a series of higher highs and higher lows since the low in December 2016, the definition of an upwards trend. Assume the trend remains the same until proven otherwise.
This weekly chart still remains mostly bullish with some neutrality.
DAILY CHART
Click chart to enlarge. Chart courtesy of StockCharts.com.
After hours has seen further downwards movement, so far to reach just below support about 1,240.
Some increase in volume today supports downwards movement. This may be a small selling climax, or equally as likely it may be a strengthening downwards trend. ADX, ATR and Bollinger Bands still indicate overall this is more likely to be a pullback within a larger upwards trend than it is to be a healthy downwards trend. A healthy trend should have increasing range, increasing volatility, and increasing volume.
There is room for price to fall further. Stochastics exhibits no divergence with price and RSI is not yet oversold.
TRADING ADVICE
The next 24 hours should provide clarity between the two wave counts: either a very bullish main count or a very bearish alternate. It would be most wise to wait patiently for this clarity.
If choosing to take a punt on the long side, reduce position size here to about 1-2% of equity. Alternatively, members may like to hedge here: stops for longs may be about 1,231 and stops for shorts may be about 1,259.
Always follow my two Golden Rules for risk management.
1. Always use a stop.
2. Invest only 1-5% of equity on any one trade.
GDX
DAILY CHART
Click chart to enlarge. Chart courtesy of StockCharts.com.
The bearish signal today from On Balance Volume should be given weight. It changes the balance in this chart from neutral / bearish to more bearish.
The long upper wick on this last daily candlestick is very bearish.
STUDY OF A THIRD WAVE IN $GOLD
Click chart to enlarge.
This study of a third wave will be left in daily analysis until the current third wave is either proven to be wrong (invalidated) or it is complete.
This third wave spans 59 trading days.
It was not until the 40th day that the overlapping ended and the third wave took off strongly.
The middle of the third wave is the end of minute wave iii, which ended in a blow off top.
There is excellent alternation between second and fourth wave corrections.
This third wave began with a series of five overlapping first and second waves (if the hourly chart were to be added, it would be seven) before momentum really builds and the overlapping ends.
The fifth wave of minuette wave (v) is the strongest portion.
This third wave curves upwards. This is typical of Gold’s strong impulses. They begin slowly, accelerate towards the middle, and explode at the end. They do not fit neatly into channels. In this instance, the gold coloured curve was used.
Click chart to enlarge. Chart courtesy of StockCharts.com.
This trend began after a long consolidation period of which the upper edge is bound by the blue trend line. After the breakout above the blue trend line, price curved back down to test support at the line before moving up and away.
RSI reaches overbought while price continues higher for another five days and RSI reaches above 85. The point in time where RSI reaches overbought is prior to the strongest upwards movement.
ADX reached above 35 on the 9th of February, but price continued higher for another two days.
The lesson to be learned here: look for RSI to be extreme and ADX to be extreme at the same time, then look for a blow off top. Only then expect that the middle of a big third wave is most likely over.
The end of this big third wave only came after the blow off top was followed by shallow consolidation, and more highs. At its end RSI exhibited strong divergence with price and On Balance Volume gave a bearish signal.
Third waves require patience at their start and patience at their ends.
This analysis is published @ 07:35 p.m. EST.
Now the question is, where is the best entry to join the trend in Gold, Silver and further in Oil? Correction are expected, how high will they go?
Thanks
Ursula
I’ll have alternates at the monthly chart level. It’s entirely possible cycle b isn’t over as a zigzag, that was only primary wave A of a flat or primary wave W of a double zigzag or double combination. Or of a triangle.
And I’ve said this before, this is the problem at this time with the wave count. At the monthly chart level there are so many possibilities because price may be within a B wave. B waves are the worst. There are so many structures they can take. They can be fast and shallow, or very complicated time consuming structures. I have to consider all these possibilities.
We have to be flexible and be prepared to switch from bull to bear and back again as we work through these options.
So, I’ve read through all your comments now.
Thank you so very much to all who have shared charts and analysis today.
And thank you very much for anyone who is frustrated this last week with this pullback not ending… not jumping in here to have a go at me or anyone else. I did read these comments today actually expecting that, and it’s nice to see it didn’t happen.
Okay, so before I go through the rest of your comments below here is an updated hourly chart.
The new main wave count is very bearish. Very bearish indeed. I’ll be looking now for alternate scenarios at the weekly chart level.
A first wave down is incomplete, it’s within a primary degree third wave. When intermediate wave (1) is complete then we shall have a bounce for intermediate (2), probably very deep probably much deeper than 0.618. That will give us a bit of profit on the upside, and then allow a good entry to ride the next wave down.
Today changes everything. With a full daily candlestick below the lower edge of the base channel and not touching it, and it’s a good convincing downwards day, the bull wave count must now substantially reduce in probability.
And that’s the problem with TA, EW and the nature of probability. Always assume the trend remains the same, until proven otherwise. Assume the market is in an upwards trend since December 2015 until price tells you it’s not. Today price is giving a very strong shout with a breach of an important support line.
Sorry, above is an updated daily detail chart.
Here’s a daily chart zoomed in…
And an hourly chart.
I count 1-2-3 done, today sideways for 4
tomorrow down for 5
Lara. The degree of detail in these charts is astounding. Thank you for your patience and time in working all these out.
I can empathise with you in these trying times when gold suddenly took on a bearish turn. I do hope that people who had lost money following the bullish trend would not vent their frustrations at you. It is not your fault. To be sure, all of us are ultimately responsible for our own decisions and it is not right to put the blame on others when things go different than planned. As I said earlier, markets are dynamic, and can be very volatile at times. Sometimes, indicators are of no help. The simple rule is that if in doubt, don’t trade. If trade we must, then discipline in money management is vital. I believe all of us should be in this together, and we ought to encourage and nurture each other along the way. In this way, it makes the humdrum life of a day trader more conducive and less stressful.
Lost a few but quickly made it back and then some extra in a hedge now turned into the main trade as it covered the loss allowing me to close long.
Your channels, invalidation points along with strict money management have been excellent guidance. Alternative charts are there for a reason and I reference your hourly daily and monthly drawing areas on my charts to be aware. EW is amazing but there are always decisions and turns so remaining nimble and vigilant is key. You’ve done a wonderful job at it all and I thank you.
PS I don’t chat in the Trading Room but have had great success with your analysis there as well for my oil and copper shorts. Sorry for the rant. Just wanted to share my support. Now off for a surf.
Joseph L
Malibu, Ca
Lara: Even using TA one would first wait for the break of previous low.
From completed PM wave 2 low gold is still in higher high and higher low mode which is considered bullish.
IMO
I agree…
But this breach is so strong. With a strong downwards day.
And the TA is bearish.
Will run both wave counts alongside each other. Bullish members may trade the alternate, bearish members may trade the main count.
Wild and crazy guys may trade both! 🙂
I have an alternate I think you’ll like Papudi.
Cycle b could be a triangle. We may see a continued drop but not below 1,123.08, then another three up to end below 1,294.96.
Starting to write this all up now… it’s going to be long and complicated, but I’ll do my best to try and make it clear.
Thank you Lara, for the chart…….. If this is the main wave count now…., will it take years to complete this C wave down ?
Thanks,
No, not necessarily.
Cycle degree waves usually last about one to several years. So far cycle c has lasted 9 months, now in the 10th month.
Cycle c could be even in length with cycle a, but then the target for it would be 501 and that would only be the end of Super Cycle (a).
It’s all a bit complicated, and at this stage at the monthly chart level there are multiple alternates possible.
For now, the short answer is unlikely. It may be over within another year.
I hit the refresh button so often during the day to read posts and am very grateful for all of them.
The comments are vital to enriching Lara’s site because, after all, she does need some sleep.
Alan – I can recall a while back that you got very quiet with your posts for about a week or two because your opinion differed from Lara’s. You were bearish and shorting while Lara’s charts were bullish. You wound up being correct and profited. Many times, you offered a check and balance for Lara which is very valuable. I’m sure Lara appreciates the comments too because she wants to nail the movements for gold so badly. Please know that your comments are greatly appreciated.
On a humorous note, can you imagine what John might be spewing right about now? Hahahaha
Stephen you read my mind! Hyuk!
Thanks Stephen. Calling a position is an exercise in probability. Sometimes we are right, sometimes we are wrong. Moreover, it is a function of time. To be fair, Lara calls it when she sees it. Her posts are about half a day old when the US market opens. In that time period, a lot might have transpired, especially when the US is notorious for releasing investor-sensitive information at 8:30 am just before the market opens. Especially in critical situations, the ensuing mass hysteria could result in a position being completely turned around. That’s why I always feel sorry for her when some members of the forum direct their frustrations at her. They fail to realise that the markets are dynamic. Very often, there are a few ways to interpret a wave. An example is the second wave which may appear to be a simple zigzag but turns out to be an ABC affair. Lately, the third or fifth subwaves have been very very deceptive. You might notice that Lara had called for a bottom but it was only the third of five waves. I made the same mistake today in calling the bottom too soon. We have to make a judgement call based on the available information. And, there is no guarantee that the most probable event will happen. This is the nature of the game. If we can be right all the time, then all of us can become rich overnight.
By the way, who is John? Is it Trump, his middle name?
I believe John was the member who suggested trading without stops.
And I think that poor risk management may be at the heart of his problems.
I can imagine what he’ll be saying about my analysis skills today, and it won’t be good.
I’m learning more and more that when new members exhibit a lack of understanding of risk management, or an unwillingness to take it seriously, or a lack of understanding about how probability works, then it does not end well. For them or for me. In future I’ll be quicker to remove people who exhibit these traits.
Anyone else notice the bounce in Platinum and palladium today? Strange that gold and silver didn’t bounce with them…
I’m also noticing that USD Index has moved strongly lower today. With Gold.
And that right there is a great illustration of how we cannot rely on correlations which are mathematically shown to be unreliable.
Very little being reported about the fact the Puerto Rico is in court today with very bad news for its bond holders. Somebody is going to have to eat that better than 120 billion that they simply cannot afford to repay. Are they about to become another Greece, with enslavement of the island population and a fire sale of national assets?
Question is : Do we become Greece???
We already are…we just don’t realize it as yet…
Gold had entered the cloud (you may refer to the graphic I posted at 5:51 am), almost touching the bottom and then decided to move upwards. A drop below the bottom would spell bear, and price could then cave in, a waterfall perhaps. Luckily this has been averted, so far. I’m waiting to see if price can break out above the top of the cloud, around 1232-1234. If it does, the bull lives to see another day. Anywhere inside the cloud, we have a hibernating animal.
Alan
The Ichimoku chart in intraday time frame is available on Pmbull charting site.
http://www.pmbull.com/gold-price/
Thanks Papudi. That’s invaluable advice. I’ll play with it and see how to post it.
The IHK spells the cloud is thin! That is the danger signal I fear. I would feel better with a fat cloud.
Appears Gold price is facing resistance below 1235. Lowered stop to 1239 and keeping it short for a break below 1225 targeting 1217-16, lets see if price gets there. Cant trust the Big Boys lol… Got my overnight expected 1227 woo hoo & am I over the moon or what 🙂 Thanks to Alan, Papudi, Dreamer, Verne others for their valuable inputs. Inspirational! Have a fine trade all, tomorrow is another day. GL.
Hi Syed. From my EW count, when the current drop ends, there will be a substantial rise in the gold price. Both Lara’s Main and Alternate counts, as well as my alternate Alternate counts point to a rise.
The Main Count will see Minor 3 rising to the 1300s, exact figure only available once this drop ends. Lara’s Alternate Count indicates a rise to the 1260s (most likely Minor 2), gold’s last stand before laying anchor in the deep. My alternate Alternate Count also targets the 1260s, but it has a possible further high to the 1340-1360 region later before the big plunge.
This will technically allow those bulls who suddenly found themselves being flooded yesterday, in the swirling waters perpetrated by the deceitful bankers, a chance to get out with some profits.
Hi Alan. Thanks for sounding the board. Being cautious now keeping stops tight lol. Yeah do expect a near random plentiful bullish reversal to come in to play anytime soon. In my estimation Gold price has probably established an interim top at 1295 already and it would probably labor to firstly get past 1275. Time will tell. With Lara’s analysis punctuated by your updates is fascinating to follow. Awesome! Thanks so much.
Papudi ,
Your Count is also OK with me , I have been seeing it that way too , but will let Lara determine what is the best way , she checks their Fib ratios we can’t do visually .
I know EW has no unique solution , and 2 different counts can give the same results for a long time till one invalidates .
I know FX traders making good money using Hourly Ichimoku .
Good of Alan to bring it out , Thanks ,
I personally prefer EW becos it is more descriptive , and it allows an expert like Lara to determine its own timing Indicators , and we can check its traceability .
It also allows inter- market checks , like Dreamer’s 4 ” Head and Shoulders ” in one chart page .
Put USD above EURO on the left and USDJPY above GOLD on the right , and check their EW . As a longer term player , I find this useful at major turns like now .
Lara , thanks for so many extras you have given this site . Sorry I have not responded earlier .
Best of luck everyone .
Raymond .
Thank you Raymond for your continued support, especially in times like this.
It is much appreciated.
Hi ,
Look at the USDJPY Hourly – it has very good inversed correlation with GOLD .
David has mentioned this 3 times previously . The Correlation coefficient is calculated like say the RSI , based on price ( and direction ) and to be used similarly when doing analysis, not what happened historically . Since the Gold rally started to now , it has very high inversed coeff , except during the major turn when one of the pair leads or lags , but they will revert back to their normal correlation again . This is what Lara ‘s attached Daily chart says .
Here is my best read of USDJPY Hourly :
Start : 108.10
(i) : 109.20 , …… (iii) : 111.80 , …… (iv) is just below (iii) , right a bit .
For (v) , it has an imperfect Wedge ( Ending Diagonal ) that has counted to v now .
I expect it to fall and GOLD to rally anytime . The fall maybe a wave 2 , not sure of the bigger Count . But that’s the GOLD ‘s rally . IF USDJPY Hourly falls below
iii or lower at (iii) , 111.80 , it will likely be confirmed . Check it out yourself with your USDJPY Hourly .
I suspect the Sell- off is intense becos the blue smart money ( banksters that Verne mentioned ) are raiding Silver . https://www.wellenreiter-invest.de/cot-daten/silber
The smart blue have been short Silver for weeks since FEB ( eg -100,000) and need to Buy SILVER to cover their positions . They triggered a Sell- Off to Buy as always .
Read smart blue money and red dumb money ( eg Hedge Funds , Speculators ) are mirror image , one Buy/ the other Sell . The red just follow the gray Price .
SILVER just waterfalled : http://stockcharts.com/h-sc/ui?s=%24SILVER&p=D&yr=0&mn=6&dy=0&id=p44592739581
I just had surgery and recovering , but I enjoyed reading your work .
Big thanks to Dreamer’s effort . Trading View has Ichimoku charts Hourly that Alan is looking for .
Lara main count will get GOLD correct . I trust her count and I can see it agrees with my USDJPY perspective .
Regards everyone ,
Raymond .
Raymond, good to see you back posting. Best wishes for good health!
I put my EW skill to work????
May be int (2) is not done yet??
Gold turn into double overlapping flats.
Invalidation 1194.
Any comments from skilled EWers will be appresciated
You can add the Fibo Levels from small c to big B. We are about 38.2% or 61.8%.
Hi Papudi. Thanks for the count. You might like to look at my alternate Alternate count posted below, time stamped 7:59 am. Like you, I’m thinking that the high of 1294.96 is not Primary 2, as in Lara’s count. I picture Primary 2 as comprising 3 sub-waves, either as a flat or a combination.
I defer to Lara’s point 1374.91 being the end of Cycle B (Primary 1 on your graph). The low of 1123.08 (your Primary 2) is my Primary A. I deem Cycle C as having 3 sub-waves, Primary A, B and C. The high of 1294.96 (your Minor B) I place as Intermediate A.
Today’s low, so far 1225.96, would be my Minor A of Intermediate B. Let’s wait for Lara’s comments.
Thanks Alan and Rafael.
While it has a fairly good look, the reason why I’ve discarded that idea is B is now just over 2 X A. It is 2.02 X A.
So the idea is technically valid, but has an exceptionally low probability.
Thanks Lara. The second I pressed the post button I realized it wave B is above 2.0. LOL!
Thanks for teaching us EW.
I know Lara does not like the correlation of gold with USD/JPY but it has been very high recently. USD/JPY is at downtrend channel resistance now. If it turns south, I believe gold will rally. It appears to be making a Doji reversal candle today at resistance. Holding my very underwater gold longs.
It’s not that I don’t “like” it, it’s just that the math shows it’s not reliable.
And for what I mean in terms of daily price movements, look today at Gold vs USD Index. They most often have a negative correlation, but today both these markets have moved strongly down.
That’s the problem with unreliable correlations.
Now, markets which have reliable correlations (like Gold and Silver, or the S&P and DJIA for example) very rarely do that.
Gold going down while bitcoin going up. Oh well. We trade what we get. On another note, good job Lara on OIl. I trimmed some CL puts here.
Cheers Sundeep. Yes, at least we have nice profits on Oil. Very nice indeed.
I’m keeping a close eye on it daily, will update where to pull stops down and how strong or weak this fall is looking, in US Oil comments on that post.
And If I may add…with much, MUCH more to come; this party’s just getting started people! 🙂
Most folk trying to pinpoint the genesis of the next global financial crisis were sure it would be China, because of their gargantuan dept to GDP ratio, mal-investment, and ruined environment. The thinking was that the contagion would then spread to Australia whose economy is very closely linked to China’s due to commodity sales, and where there is one of the biggest real estate bubbles ever seen. Interestingly enough, trouble has been quietly brewing in another place at the opposite end of the globe. I am referring to our neighbors to the North, Canada. There are whispers of a run on banks there in the offing. Already two non-bank mortgage lenders have been forced to obtain emergency lines of credit to the tune of of billions and at exorbitant rates of interest – 22% for the first billion, 15% for the next billion if accessed. Just one look at the charts of Canada’s banks and you know there is a financial storm on the horizon. Of course we know all about the legendary real estate bubble in that neck of the woods.
Short BMO…, and others….’nuff said! 🙂
The property market bubble in Perth, Australia has burst already.
The word here in NZ is that cannot possibly happen in NZ, because our economy is more diversified.
Yeah, right.
Same is true in India. Property value has been in bubble for longer than I expected and there is no end in sight!!!
Same reason given : it can not happen. Tell to those who bot Tullips!!!!
Fortunately for those of us living in Singapore, the property market is highly regulated by the government. It is not a free-for-all. We do have speculators from Indonesia and now China trying to prove otherwise, but they had not prevailed, so far.
Silver and gold are now breaking their respective weekly upward trend lines.
Any back-test of those that fails in the next few days and I will be shorting.
My preferred trade near term is to fade the S&P 500 pop today on the healthcare vote. Looking to close the 4/24 gap.
I simply cannot see the equity market holding up near term in the face of a worldwide commodity meltdown and in the face of a slightly hawkish fed.
Actually, I’m very excited about the prospect of gold testing down to the lows from Dec. 2015. There would be a fantastic seasonal play to go long if we can bottom in the July / August time-frame…there have been many fantastic moves up when gold bottoms in the summer.
Good luck – and if your trading account got spanked last few days, get to cash, clear your head, and stay in the game!!!
What is happening with the price of oil is quite telling. We are talking about the life-blood of the economy. How long do you think it is going to take the average Joe to put two and two together and figure out what this momentous slide in the price of that which greases the economy’s skids. so to speak, is telling us about the true state of the economy….hmmmnnnn???!! 🙂
Lara. I promised Syed that I would look at the Alternate Count. It looked soberingly bearish because the next wave is a third down.
What if Primary 2 (or B) is a zigzag instead of ending at 1294.96? I’m thinking of a flat or combination, that 1294.96 is only the A (or W) wave of Primary 2 (or B). Early in the making, it is too early to tell. But, my experience with second waves is that they have a disproportionate tendency of being ABCs or WXYs.
Working on this, if 1294.96 is the Intermediate A wave, then Intermediate B = 0.618 * Intermediate A yields 1294.96 – 0.618 * (1294.96 – 1123.08) = 1188.74. If Intermediate C = Intermediate A, then Primary B ends at 1360.62, yielding a nice flat for Cycle C (comprising Primary A, B and C). Primary C and hence Cycle C will end around 1041, your first target.
Will answer this question in todays analysis which will have video update.
Lara always writes about gold’s typical move.
Using the same sentiment I keep looking at past EW counts available to me.
Last time major third of 3rd wave began was in Jun 2007 . Once gold completed wave 2 in Jun 2006 it took almost 9 moths to complete first two int waves 1 and 2. Then Jun 2007 the lift off came which took gold to new high in Jan 2008 to 1033.
The current daily count from bottom of PM wave 2 to int wave 1 the counts are similar five up . from Jun 2006-Jun 2007 wave 2 took lot more time all the way to Jun 2007.
Is it possible Lara’s int wave 2 is taking longer time this time around again???
May be any EW expert here can make better comparison of the wave counts from two time period or it is a waist of time????
Thanks.
Papudi. History often repeats itself. But, there is no guarantee. There are many analysts who have called for the fractal nature of the wave to repeat, with varying degrees of success. I leave it to those who are good in cycle analysis and EW to answer your question. Ultimately, I think it is an exercise in probability. Worse yet, there are talks about conspiracy theories, the HFT and computer algorithms being a favourite one. Their basis is that corporations (with banks singled out as being the villains most of the time) have analysts of all description working for them. They will have undoubtedly worked out as many scenarios as possible, and then go against the grain. With a good capital base, they will buy and sell at critical resistance, support and invalidation points, causing prices to bend in their favour.
For myself, I look to the immediate future. I trade what I see before me. I’m sure the immediate datasets have a much greater influence than what happened in the past or what is expected to occur in the distant future. I have learnt that the trading community is ruthless. Theories are of no help, in fact, they are a hindrance. In common parlance, “a bird in the hand is worth two in the bush”. Take things off the table whenever we have a chance to do so.
Thanks Alan.
Yes you are correct. Do the best at hand.
I saw a book on investing/trading on Amazon:
Nobody Knows Anything: Investing Basics Learn to Ignore the Experts, the Gurus and other Fools
https://www.amazon.com/Nobody-Knows-Anything-Investing-Experts/dp/1533087148/321team-20
That wave count just looks… wrong. It’s labelling wave C of 2 as a three, a-b-c. C waves only subdivide like that in triangles, all other times they must be five wave structures not thees.
B moves beyond the start of A as it can in a flat correction. But C falls well short, that’s a massive truncation, a running flat. When running flats truncate it’s usually not by very much at all.
Technically this wave count is incorrect, and even if C could be seen as a five to make it correct, it would have an exceptionally low probability due to the severity of the truncation.
So far, the gold price descent had followed my analysis quite precisely. (I had profited quite a fair bit from my shorts, and now I’m at the crossroads deciding whether to change my mind). When the support yesterday gave way, I mentioned that the next support is at 1233.32. Today, price had gone down to 1233.17, pretty close to my target. That was submicro 5 of micro 5, subminuette 5, minuette c, Minute Y and hence Minor 2. If this count is correct, price will rise strongly from here.
The Ichimoku chart has not painted a rosy picture. The faster Tenkan-sen (blue) had just had a negative crossover to the slower Kijun-sen (red). This is equivalent to a negative crossover of the moving average lines, and is an indicator of caution, that the trend may turn bearish. Notice that there are now no more support levels until price plunges into the cloud. The silver lining is that the cloud is still green, and price is still above the cloud. This means that the trend is still bullishly neutral. (If it does either, then a trend change is indicated). Furthermore, the other “hope” factor is that history repeats itself. When price fell to the low of 1194.50 on March 10, the top of the cloud provided a strong bounce, propelling price to 1297.40. It would be really great if it does the same, probably gaining some momentum on Monday when the French election results are known, since the pundits are gungho about a Macron win, as Roopa pointed out. You all know the saying “buy the rumour, sell the fact”.
What will I be looking for before entering long? Price must now quickly get back into the downtrend channel line, showing that the break downwards is a fake. That will be nibbling time. To be on the safe side, I am waiting for a break out of and above the channel for final confirmation.
On a side note, I don’t know whether anyone really reads my analysis as I have not received any feedback to same, whether a word of encouragement or criticism. Nay, not even an acknowledgement. If there are no readers, then I reckon it is pointless to continue as it would be a waste of my time as well as this forum space.
I like your posts. I am a pac man on it.
The IHK you post shows the daily – what has a green future cloud. I have checked other time units. The future clouds in other time units are red. So I am not happy with the smaller time units.But I guess it will give you more feedback if you can post IHK in time units of 4h or 1h. This have more reactive potential and can generate more feedback.
Thanks Rafael. I have only got StockCharts that shows the daily view. I would love to lay hands on some platform that show the view on smaller timeframes, as it would yield a more accurate intraday decision. If you know of any, please let me know.
I have used Ichimoku only a month back because I feel that other analysis methods do not give a comprehensive view of factors that would be useful for us day traders. It’s no use talking of what would happen in the future, such as gold reaching $5000. We live day by day, not year by year. I don’t have that kind of money like Warren Buffett, who can buy something and keep it for 20 years.
The reason I’m sold is that Ichimoku provides in one simple chart:
(1) Overall trend direction;
(2) Current and near-future status, whether bullish or bearish, as well as their momentum;
(3) Resistance and support points;
(4) Trend change, yielding precise entry and exit points, excellent for us day traders.
I haven’t found any other indicator that shows all these in a simple chart. When day trading, I don’t have the luxury of viewing 3 or more indicators at one time to get the same big picture.
I have no clue if the data is valid and it is a german page.
https://go.guidants.com
Rafael. It looks German to me. Even when I entered, I can’t make head or tail of it.
So sorry Alan, I’m reading your posts avidly. Especially the Ichimoku posts, which is a method that I’ve not come across much of before.
I do have trouble “seeing” the wave count when you give it with numbers, but I’m getting better at that.
Your posts and charts are much appreciated. Please do continue 🙂
Thanks Lara for the encouragement. It gives me much pleasure to help others trade wherever I can. When I first started trading, I had to go it alone, so I realise how much heartaches, newcomers especially, face. It’s just that I was unsure whether my efforts helped. Now that so many have given me the assurance I will try my best to live up to expectations. I don’t profess to be an expert. Like many, I’m learning along the way.
I have trouble getting an easy to use platform with which to post charts. I know Dreamer has been able to do so. I ought to follow that. It is definitely much better to visualise a chart than to think in abstract terms. Not many people can juggle numbers in their heads. Only some weird people like me do so.
There are of course many ways to model price movements mathematically, some good, some outrightly bad. I find that EW gives a comprehensive overview of price, and that astoundingly accurate too. For day trading, in a minute by minute situation, unless one has the skill and the discipline to count the subwaves, and that quickly and accurately in real time, many traders resort to using indicators as a proxy instead. Nowadays, the markets being so volatile, many of us do not hold positions overnight. Which means that we use EW as a road map. But, indicators have the same problem of modelling. It takes a few together to provide a good idea of what is going on because each has its own limitations and some are lagging. In a real life situation, I find that I can follow five at most when trading. I came to use Ichimoku as it gives a simple chart providing much detail, sufficient to decide on a trade. It’s much easier to follow one indicator rather than five. That said, we each have to work out for ourselves what works for us. To me, EW + Ichimoku is a suitable combination.
Alan, I’m sure there are many readers of your posts, including your recent Ichimoku charts, that find value in them. Many readers either prefer not to post at all or post only occasionally. I’ve often had the same thoughts about my charts when very few or no one comments. I think we just need to keep the faith that others benefit in some way from the often time consuming work we share 🤔 I’m sure even Lara doesn’t feel as appreciated when some of her posts go without comments…
One question for you…. Does the width of the cloud mean anything? When it’s narrow like now, does that mean support is weaker?
Thanks. I do appreciate your posts. I’m as guilty as others in that I always read them, but don’t often comment.
Thanks Dreamer for the kind words.
The simple fact is that prices are bullish above the cloud, neutral when inside it, and bearish if below. The top of the cloud represents the last support for the bullish scenario, and the bottom of the cloud indicates the last resistance for the bearish one. In technical terms, going into the cloud would sound the alarm for a highly probable breakout, whether from the bullish or the bearish trend. The time price stays within the cloud represents consolidation, either backtesting or confirming/denying the breakout. Once price emerges on the opposite side of the cloud, the breakout is confirmed. This means that the width of the cloud indicates the price range of the consolidation, and is good for traders who trade a consolidation between support and resistance as it provides the extremes. Coupled with the x-axis representing time, the length of time for the consolidation is indicated. The colour of the cloud also shows the tendency for the consolidation to breakout in either direction, green for a strong bullish one, and red when a strong bearish one is more favoured.
Thank you so much Alan, that’s a really great explanation. Nice and clear.
Alan, thanks for all the detailed explanations!
Alan…your thoughts are critical in me deciding positions…and you’ve been spot on w/ your levels since I’ve joined. Pls keep up the great work!!
Thanks Joseph. So glad I am able to help.
Alan, as Dreamer says, some people (like me) only post occasionally and the majority on any subscription site don’t post at all. I know it can be difficult sometimes when you don’t get the responses you think deserve but that can be the nature of internet communication generally.
If Lara were to fall under a bus (heaven forbid!), then I would look to you to pick up the mantle with a paid service. I don’t know how to pay tribute to your skills better. (But don’t expect me to post all the time)
Thanks Johno. We are all learning and hopefully becoming better traders as we go along. Since accurate trading equals immediate rewards (and hopefully minimal losses), it does pay to have adequate information … fast.
Consider the analogy of a road trip. I use Lara’s Elliott Wave like a road map, showing the general direction in which to manoeuvre. I use indicators for the moment by moment day trading, much akin to looking at signposts along the road. I came across Ichimoku recently, and its accuracy proved almost impeccable. I had been mildly bearish in gold when most people had been bullish, especially in the gold miners. Taking small positions in shorts, avoiding the longs had been the correct decision. If only I had used this earlier. But hey, we shouldn’t be too greedy.
On a side note, we cannot trade accurately without Lara. Notice that she takes only a moment every close of the trading day to come up with a wave count, and for that I’m very grateful. It is the springboard for decisions on the next day’s trading, sometimes having to refine as markets are quite dynamic. I take at least half an hour to hone in on the most probable one. So, I still have a lot to learn.
🙂 that’s nine years of daily EW analysis I think.
It did take some time before I could see alternates that quickly, and I still wish I could see them before they become blindingly obvious sometimes.
I was interpreting your mild bearishness as expecting a pullback within an upwards trend, until today. Today changes the outlook substantially.
Lara. You are right about today.
When I posted, price was above the cloud. Today it went into the cloud, which means alarms. As long as price cannot break out of the top of the cloud convincingly, it is getting increasingly bearish. The ultimate straw that breaks the proverbial camel’s back is when prices go below the cloud. When that happens, any remaining bull would be slaughtered.
Thanks Alan, your analysis and comments are most timely and valuable. I am sure a vast majority of the members go through them even if few seldom comment. Gold price upside looks questionable for now. Price was rejected very quickly earlier today from under pivot; imo a play for 61.8% of H1375/L1122 (almost coincides with 100dma) is probably in the making, else if price can stay above 1233 then would need to take out 1242-43 with conviction to target 1250+. Let’s see how this goes, my sentiment is for further downside to follow. .
Thanks Syed.
I am with you in your inference. At the moment, unless price asserts itself like you rightly mentioned, then the bearish sentiment is stronger.
There are many silent reader benefiting from your post.
Stockchart does not provide intraday charting for gold. May be Trading view??
Great asset here!
thanks for sharing.
Papudi. I haven’t really tried to milk the features of TradingView. I know Dreamer use them a lot. Gosh, I think I ought to give it a try. Maybe it does have.
Thanks for the hint of a possible source.
Keep posting dude. I read every word, and your instincts and analysis I think are really amazing.
I am holding my downside hedges until we retake the 100 day, when I will unload half. I will jettison the rest on re-take of the 200 day.
I have been holding a few miners with a long term horizon and have been able to do very well managing the positions by selling calls against the positions, buying puts, and using the profits from the puts to add shares. Over time you can build a position (dollar-cost averaging) in some great companies that are going to eventually be worth ten times what they are trading for today. These are trades made in a long term account.
You are right that it takes an entirely different mentality for short term traders and I rarely hold positions for more than hours, and occasionally a few days, unless they are credit spreads.
Thanks Verne. I know I can always count on you.
I also read and like your post. I read all the posts as everyone here provides value. Keep it up!
Thanks David.
You are right in that everyone provides inputs based on their expertise, experience and knowledge. Reading the posts gives us fresh perspectives, and hence trade better.
Nothing bullish as yet for Gold price. Pretty lethargic. Looks unlikely for an oversold bounce to get to & past 1251-1253; keeping it short & see what happens. . .
Syed. I share your concern. It is indeed disheartening for the bulls this past week or so when a bottom had time and time again offered hope, but just as quickly slipped away. The bear had been at its most deceptive … and alas it had succeeded. Well, it can only play this game so much until everyone gets wise.
*The 5dma looks poised to cross below the 50dma, that should be bearish?*
Even more so. Let’s see whether things can reverse anytime soon. I’m still bullish in the longer timeframe. I do hope Lara’s alternative doesn’t come to pass. Perhaps I can work on one possibility where price drops but turns up before hitting 1194.50.
Lara
Where does the long term support line lies for gold. Like the cyan long term resistance line.
Anyways. I dont want to loose my focus and get scared by the very bearish weekly count and trend line untill and unless the bullish count gets invalidated. Invalidation is the rule but the trend lines can be redrawn. And 2nd wave corrections are usually deep and tend to change the sentiments of the market so i will give bullish count headsup untill its not invalidated.
Short term EW counts depend on the major events. Right now what we are seeing is just the preaction of the event on sunday. The french election outcome. Market had already priced the win of macron. No fomc and no NPA will have effect on the prices a lot before this event . This action will have an equal and opposite reaction on monday and i believe that bull count has a very good lead still.
Happy trading
Roopa. The Macron analysis is a pretty good thought that was being floated around. It appears a good justification for the market anomalies, and it would certainly have a profound impact on the crowd sentiment. I don’t normally give much weight to news, but I do so insofar as the degree of influence it has on investor sentiments. And if the crowd is polarised in one direction, price follows.
Thank you alan for sharing your thought
There was a cyan support line going back to 2003. It was breached in September 2014 and tested for resistance in January 2015.
Price has remained below it.
GDX broke out upwards today from a descending wedge, only to have upwards movement halted at the downtrend line. Both opening and closing prices were below the symmetrical triangle uptrend line.
I think there is a good chance that GDX goes lower for another 3-5 days toward my 20.31 target. The problem is going to be that the overshoot then turns into a full blown breach of the bull market uptrend line. Furthermore, Gold would have a full blown breach by then if this occurs.
While I am showing a possible “around the apex” move up, I don’t know how that would fit with a Gold count from Lara. She will have switched the bull count to an alternate. We may only get a bounce and then head down into the abyss.
The next week is going to be a wild ride.
NFP Friday and French election over the weekend…
https://www.tradingview.com/x/i2Qg4nv1/
Dreamer, good analysis. My gut feeling is that people will start jostling for a position at the close of the week in anticipation of the French results. A Macron win may result in euphoria but could quickly dissipate as the Trump win proved. But, if Le Pen wins, ah, the fun begins …
Yep, seems like gold needs to bottom by Friday for the bull count to stay in control . Maybe GDX could bottom by then also if the pattern finishes quickly.
Unfortunately I think GDXJ has been the “canary in the Gold mine” all along. It broke out downwards from the bull uptrend line last week and now we have GDX and Gold with overshoots.
The scenario is starting to look more bearish…
https://www.tradingview.com/x/y49LXcuW/
I agree Dreamer. A canary indeed 🙁