Upwards movement was favoured as more likely for Thursday’s session. This is what has happened.
Summary: A new high above 1,259.75 would indicate a bounce to last about two weeks has begun. A new low below 1,241.33 would indicate downwards movement is not over yet; the first target for it to end is at 1,225.
While price remains below 1,259.75 and above 1,241.33, the balance of probability will still favour a bounce in its early stages.
New updates to this analysis are in bold.
Last monthly charts and alternate weekly charts are here, video is here.
Grand SuperCycle analysis is here.
WEEKLY CHART I
Click chart to enlarge.
The Magee bear market trend line is added to the weekly charts. This cyan line is drawn from the all time high for Gold on the 6th of September, 2011, to the first major swing high within the following bear market on the 5th of October, 2012. This line should provide strong resistance.
At this stage, a triangle still looks most likely and has the best fit for cycle wave b.
Within a triangle, one sub-wave should be a more complicated multiple, which may be primary wave C. Primary wave C may not move beyond the end of primary wave A above 1,374.91. This invalidation point is black and white.
At this stage, it looks like primary wave C is now complete at the hourly and daily chart level. However, at the weekly chart level, it looks possible it may continue higher. This possibility must be acknowledged while price remains above 1,214.81. Within intermediate wave (Y), minor wave B may not move beyond the start of minor wave A.
Primary wave D of a contracting triangle may not move beyond the end of primary wave B below 1,123.08. Contracting triangles are the most common variety.
Primary wave D of a barrier triangle should end about the same level as primary wave B at 1,123.08, so that the B-D trend line remains essentially flat. This involves some subjectivity; price may move slightly below 1,123.08 and the triangle wave count may remain valid. This is the only Elliott wave rule which is not black and white.
Primary wave C may end when price comes up to touch the Magee trend line.
There are three alternate wave counts that have been published in the last historic analysis, which is linked to above. They are all very bullish. Members may like to review them at this stage. They will only be published on a daily basis if price shows them to be true with a new high now above 1,295.65.
DAILY CHART
Click chart to enlarge.
Intermediate wave (Y) may now be a complete zigzag if it is accepted that a triangle completed in the position labelled minor wave B. This has a perfect fit on the hourly chart.
A new low below 1,214.81 could not be minor wave B within intermediate wave (Y) and would provide strong confirmation that intermediate wave (Y) is over.
A common range for triangle sub-waves is from about 0.8 to 0.85 the prior sub-wave, this gives a range for primary wave D from 1,158 to 1,149.
If primary wave C is correctly labelled as a double zigzag, then primary wave D must be a simple A-B-C structure and would most likely be a zigzag. Within primary wave D, minor wave B may not move beyond the start of minor wave A above 1,295.64.
At the hourly chart level, intermediate wave (A) may now be complete. However, this view requires a new high above 1,259.75 now before confidence may be had in it. If intermediate wave (A) is over, then it would have lasted 10 days (not a Fibonacci number). For the wave count to have the right look intermediate wave (B) may be at least even in duration with intermediate wave (A).
Intermediate wave (B) may be any one of more than 23 possible corrective structures. It may be a swift sharp zigzag with a strong upwards slope, or it may be a shallow sideways complicated combination, triangle or flat. It is impossible until it is almost complete to know with confidence what structure it has taken. B waves exhibit the greatest variety in price behaviour and structure, so they do not present good trading opportunities.
Only the most experienced of traders should attempt to trade B waves, even at intermediate degree. If members choose to attempt to trade intermediate wave (B) upwards, it is my strong advice to reduce risk to only 1-3% of equity. It is essential that stops are always used.
Primary wave A lasted 31 weeks, primary wave B lasted 23 weeks, and primary wave C may have been complete in 25 weeks.
Primary wave D should be expected to last at least 8 weeks (but most likely longer). The next Fibonacci ratio in the sequence would be a Fibonacci 13 and then 21.
HOURLY CHART
Click chart to enlarge.
If intermediate wave (A) is complete, then a new wave up at intermediate degree should start with a five wave structure upwards on the hourly chart. This is incomplete. It may be unfolding as a leading expanding diagonal.
When minor wave A is complete, if it is a five, then minor wave B may not move beyond its start below 1,241.33.
The first five up may also be moved down one degree; this may be only minute wave i of minor wave A. If it is minute wave i, then minute wave ii may not move beyond its start below 1,241.33.
If intermediate wave (A) is complete, then the end of minor wave A corresponds with the strongest momentum as shown by MACD. This first wave count fits better with MACD, which is why it is the main wave count.
Minor wave 5 exhibits double divergence with MACD.
A new high above 1,259.75 would invalidate the alternate hourly wave count below and provide confidence in this main wave count.
ALTERNATE HOURLY CHART
Click chart to enlarge.
It is also possible that intermediate wave (A) is incomplete and minor wave 5 is still underway.
Minor wave 3 is slightly longer than minor wave 1. Minor wave 3 may have ended with an extended minute wave v, which is typical for Gold.
However, when fifth waves of third wave impulses extend they usually (not always) also exhibit strength. This one does not. This alternate does not have as good a fit with MACD.
Minor wave 2 was a zigzag. Minor wave 4 may exhibit alternation as a regular flat. It may not move into minor wave 1 price territory above 1,259.75.
TECHNICAL ANALYSIS
WEEKLY CHART
Click chart to enlarge. Chart courtesy of StockCharts.com.
The long upper wicks on the last two weekly candlesticks are bearish. Volume supports the downwards movement in price, so this is not suspicious.
Declining ATR fits with the Elliott wave count at the weekly chart level; this is normal for triangles.
DAILY CHART
Click chart to enlarge. Chart courtesy of StockCharts.com.
Volume today is slightly bullish, but the long upper wick on today’s candlestick is bearish. This looks like a counter trend movement which fits expectations from the Elliott wave count.
GDX
DAILY CHART
Click chart to enlarge. Chart courtesy of StockCharts.com.
GDX again looks more clearly bullish than Gold today.
If the gap up today is a breakaway gap from a small consolidation, then the lower edge of the gap should offer support. Breakaway gaps are not usually closed.
This analysis is published @ 07:18 p.m. EST.
With a very clear breach of the Elliott channel, there will be only one hourly wave count published at the end of this week. The alternate hasn’t been invalidated by price, but the probability is just too low for publication now.
Nice up day and strong close for the miners albeit on low volume. Maybe a bit of a pullback early next week before more up.
Steady as she goes! I will be looking for an entry on GDX next week.
Still holding SLV 16.00 strike calls which hopefully won’t expire worthless next week. Going into the money would be a nice bonus as they were the second leg of a bearish call spread.
Have a great week-end everyone!
Dollar giving a sell signal, GDX giving a buy signal. GLD not yet, but looks like it may happen very soon, barring a large drop, and Dow on a sell signal. Up volume on GLD constructive last couple of days. Stars seem to be lining up for GLD to challenge overhead resistance, although it is rather strong. There is still that potential double top on the daily and some weakness/neg divergence in the short term. We’ll have to see
The CFTC has finally levied charges against someone for price manipulation in the precious metals market. They are citing the COMEX and a junior trader rumored to be at DB. This may appear insignificant considering how institutionally widespread the practice is but many are saying it is a shot across the bow from new CFTC head James McDonald to the other bullion banks to clean up their act. I will have more confidence they can make a difference when, and if they take away their naked shorting ability in precious metals.
Second gap up open for Silver the last three days could be quite bullish short term. Prior instances saw a decent run to the upside and coming at the end of a down-trend could an be important clue about the right wave count.
Silver has breached its Elliott channel to the upside. It seems to now be following its yellow cousin. Holding onto my SLV 16.00 strike calls for more upside.
The 1st inverted H&S target is almost hit. A second inverted H&S target is added
https://www.tradingview.com/x/p0Qlj54q/
A very good chartist I know recently commented on the fact that the IHS was technically actually a bottoming reversal signal as the regular HS was a topping reversal signal. Several folk commented on the fact that it still seems to work in multiple time frames and even in the middle of trends. That does seem to me to be the case.
Gold to silver ratio breakout to downside from a wedge indicates nominal price of gold will go higher.
A sign of gold bottom in 2 hour period confirms GSR BO with inverted HnS BO. AND Price trading above red cloud.
Lara and Alan analysis is right on for a rally here. But need to watch 1259 .
Ichimoku Gold 4-Hourly Analysis
Data as at 4:15 am ET June 23
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Gold price is making higher highs and higher lows in the 4-Hour Ichimoku Chart. It is unfolding the upward reversal we expected off the 1241.33 low. Prices are expected to continue the bounce towards the 1260 level and higher. On the other hand, we could see a short-term new low towards 1225-1230, but that is not a requirement.
The 4-Hour Ichimoku Chart shows that gold prices remain below the cloud, and the cloud is red. This means that the upward thrust is at its infancy, and yet to find bullish traction. That could only happen with a break above the top cloud boundary, with the 4-hour cloud turning red at the same time. Meanwhile, gold price is trading above both the tenkan-sen and the kijun-sen, and this is a short-term bullish sign that the upside should continue. Moreover, the tenkan-sen had made a positive crossover with the kijun-sen two candlesticks ago. Gold is observed to be attempting to break into the cloud next. The only question is whether it could enter the cloud or get rejected by it, and this is the price action we should be watching today. If price enters the cloud, there would be a period of consolidation before a breakout above the cloud or a breakdown below the cloud, once again, would transpire. If it does get rejected by the cloud, prices would fall in Minor B of the Main Count, down to a maximum of 1241.33. (Breaching 1241.33 would mean the Alternate Count is in play).
Alan, thank you for your frequent Ichimoku analysis updates. What I like best about them, is how you tie your study to Lara’ Elliott analysis. It’s a great addition to Lara’ already outstanding work.
I dont post often. I think there will be a strong move to the upside in the near future.
I qualify this with some bias as a Australian gold stock investor and trader who is long at present.
In my experience follow the miners and they will indicate where gold is headed. The attached count is for the Australian gold miners index. It expects an imminent 3rd of 3 of primary 5th wave to continue this impulse upwards. (the US indexes likewise for primary 3rd wave)
The point being, so as long as the lows of May hold for the gold miners gold should move higher. Should they not then Lara’s count would be correct. XGD would fall below 4000 and breach trend line support. What I am seeing is some decent strength in some of the market leaders with the strongest charts that have been in uptrends for a few years e.g. TBR NST and GOR so I do expect that if the market leaders are strong then the rest will follow. GDXJ has been outperforming gold for a little while which as a little weight to my view as well. Anyway just my thoughts as it seems we are getting close to what is an interesting juncture in this market.
Thanks for the input Stuart. Nice to hear from you!
Ichimoku Gold Daily Analysis
Data as at market close, June 22
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The gold market rose during the day on Thursday, breaking above the 1250 level. Indications point to a continued rise from there. The MACD histogram had levelled out and is slowly rising. The 5-day RSI (yes, I use the 5-day RSI instead of the conventional 14-day as I find the latter too unresponsive for short-term trading) shows a rebound from oversold levels, moving strongly towards the 50-mark. RSI being a leading indicator, it gives a very good indication of price direction. Ichimoku shows that the gold price respected the bottom cloud boundary, and bounced from there. This is another bullish sign. The future cloud direction indicates green with a small interval of red at the beginning of July for a slight pullback before a continued climb. All these are in consonance with price action, which calls for a test of the 1255 level, the breaking of which would lead to an assault on 1260, and if that is conquered, the 1275. I would not say this will be an explosive move. The gold market rose largely because of the breakdown in oil prices; the sluggish stock market responded to the oil weakness, and so investors fled to the safe haven of precious metals. The still hibernating global geopolitics offered no help at all to gold.
But what about the risks? Ichimoku shows that the tenkan-sen is entrenched below the kijun-sen, a sign of weakness. Moreover, kijun-sen appears to be rising while tenkan-sen seems to be napping. This alerts of price topping soon, and falling again. A breakdown below the 1250 level, perhaps 1248, would have the market looking for the lows again should 1241.33 gives way. This is the Alternate Count. Although the price action in the past two days had steered us away from this scenario, it does not mean it would not happen.
On balance, I would be interested in going long should prices break above 1255. The current 1265-1275 ceiling may not be the end of the movement. It is the most likely in the foreseeable future, the Main Count. But, if some event could spur the gold price to greater heights (both figuratively and literally), then the bulls will come out to play. And, I want to be in their number.
Gold hourly looks like it might have an Inverted H&S in the making. A neckline breakout targets about 1,258
https://www.tradingview.com/x/If8542M2/