Upwards movement overall continues towards the target. Today the invalidation point on the hourly Elliott wave chart was invalidated by 1.05 before price turned upwards again.
Summary: The target is now at 1,260. It may now be met within five sessions. There should be one more consolidation along the way up.
Classic technical analysis still offers more support for the main wave count than the alternate.
Always use a stop. Invest only 1-5% of equity on any one trade.
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.
MAIN ELLIOTT WAVE COUNT
WEEKLY CHART
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 possible and has the best fit for cycle wave b. It has some support from declining ATR and MACD now beginning to hover about zero.
Within a triangle, one sub-wave should be a more complicated multiple, which may be primary wave C. This is the most common sub-wave of the triangle to subdivide into a multiple.
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.
Finally, primary wave E of a contracting or barrier triangle may not move beyond the end of primary wave C above 1,295.65. Primary wave E would most likely fall short of the A-C trend line. But if it does not end there, then it can slightly overshoot that trend line.
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.
DAILY CHART
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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. At this stage, to try and see the whole of primary wave D complete at Monday’s low does not look right. The B-D trend line would be too steep for a normal looking contracting Elliott wave triangle, and primary wave D would have been far too brief at only 5 weeks duration. For the wave count to have the right look and good proportions (as Gold almost always does), primary wave D should not be labelled over yet.
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.
It is possible that only intermediate wave (A) was over at the last low and the current bounce is intermediate wave (B).
Intermediate wave (B) looks to be unfolding as a zigzag, a three wave structure. Corrective waves have a count of 3, 7, 11, 15 etc. Each extension adds another 4. So far intermediate wave (B) has a count of 4 on the daily chart, and so a further 3 is required to total 7. The structure cannot be complete at this stage.
So far intermediate wave (B) has lasted a Fibonacci 8 days and the structure is incomplete. The next Fibonacci number in the sequence is 13, which would see intermediate wave (B) end in a further five days.
Within the zigzag of primary wave D, intermediate wave (B) may not move beyond the start of intermediate wave (A) above 1,295.65.
HOURLY CHART
Click chart to enlarge.
Upwards movement may be a zigzag for intermediate wave (B). Zigzags subdivide 5-3-5, exactly the same as the start of an impulse.
Now that intermediate wave (B) has moved reasonably above the 0.382 Fibonacci ratio, the next Fibonacci ratio in the sequence at 1,260 will be used.
Minor waves A and B look correct. Minor wave C must be a five wave structure.
The structure within minor wave C is today relabelled. The duration of the regular flat correction labelled minute wave ii shows up on the daily chart. This labelling now looks right on both hourly and daily time frames.
Within minute wave iii, no second wave correction may move beyond the start of its first wave below 1,235.34.
MACD exhibits some weakness now within upwards movement. The target for minute wave iii expects it shall be shorter than minute wave i. With some weakness now this looks possible. The target for minute wave iii fits with the higher target for intermediate wave (B).
ALTERNATE ELLIOTT WAVE COUNT
WEEKLY CHART
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This wave count has been published only in historical analysis. At this stage, it will be published on a daily basis.
There are more than 23 possible corrective structures that B waves may take, and although cycle wave b fits best at this stage as a triangle (main wave count), it may still be another structure. This wave count looks at the possibility that it may be a double zigzag.
If cycle wave b is a double zigzag, then current upwards movement may be part of the second zigzag in the double, labelled primary wave Y.
The biggest problem with this wave count is the structure of intermediate wave (A). This upwards wave looks very much like a three and not a five. This upwards wave must be seen as a five for this wave count to work.
Within the second zigzag of primary wave Y, intermediate wave (B) is a completed regular flat correction. Minor wave C ends just slightly below the end of minor wave A avoiding a truncation. There is no Fibonacci ratio between minor waves A and C.
The target remains the same as previously published for this wave count.
Along the way up, some resistance should be expected at the cyan Magee trend line.
Within intermediate wave (C), no second wave correction may move beyond the start of its first wave below 1,205.41.
DAILY CHART
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Intermediate wave (C) may be unfolding as an impulse. So far minor waves 1 and 2 may be complete. It is common for Gold to exhibit short first waves and very long extended third waves.
When minor wave 3 is complete, then minor wave 4 may not move down into minor wave 1 price territory below 1,225.33.
HOURLY CHART
Click chart to enlarge.
A-B-C of a zigzag subdivides 5-3-5. This is exactly the same as 1-2-3 of an impulse. Both wave counts at the hourly chart level may have the same subdivisions.
The target for minor wave 3 is reasonable given that minor wave 1 was very short. This is not an uncommon Fibonacci ratio for Gold, and it fits with the higher target for minor wave 5 to end primary wave Y.
Minor wave 3 may only subdivide as an impulse. So far only minor wave 1 may be complete. This wave count now expects to see an increase in upwards momentum as a third wave at two degrees moves higher. This should also have strong support from volume.
Minor wave 2 may not move beyond the start of minor wave 2 below 1,235.34.
TECHNICAL ANALYSIS
WEEKLY CHART
Click chart to enlarge. Chart courtesy of StockCharts.com.
This chart is updated to now show the breached orange trend line. The prior bearish signal is negated, so the breach is a bullish signal. This supports the second Elliott wave count.
DAILY CHART
Click chart to enlarge. Chart courtesy of StockCharts.com.
If the main wave count is correct, then current upwards movement is a B wave. B waves should exhibit weakness.
For the short term, another long lower wick on today’s candlestick is bullish.
In support of the main wave count: bearish divergence with price and On Balance Volume, flat volume, declining ATR, and contracting Bollinger Bands.
In support of the more bullish alternate wave count: MACD and the weak bullish signal from On Balance Volume breaking above a resistance line.
On balance, at this stage it is still my judgement that the main wave count has more support than the alternate wave count. This would change if the volume profile becomes more bullish, ATR begins to increase, and Bollinger Bands widen with upwards movement.
Look for Stochastics to fully reach overbought and price to reach resistance at the same time. If that happens, then expect an end to upwards movement there.
GDX
DAILY CHART
Click chart to enlarge. Chart courtesy of StockCharts.com.
The rise for GDX is looking more clearly weak than the rise for Gold. If Stochastics fully enters overbought and price reaches resistance at the same time, it would be reasonable to expect an end to upwards movement then.
This analysis is published @ 07:12 p.m. EST.
Updated main hourly chart:
The final target at 1,260 now looks too low.
When minuette (i) arrives it should remain above this point.
Any members who are long Gold may move stops up, and move profit target up. For now leave it about 1,270. But it may be higher.
When minute iii is over then I’ll adjust the channel about this upwards movement. We may use that to tell us when upwards movement is over; when price breaks below the channel then a trend change would be expected.
For now the trend for Gold and Silver is up, and both have incomplete structures so expect it to continue.
did you mean when sub iv arrives it will remain above 1247.33?
minuette iv not sub iv
sorry, yes. that’s what I meant
looks like oil may have broken down?
Yes, it does indeed. An updated chart and comments posted on the last Oil analysis.
Shorting silver @ the close? YES? NO?
No. The trend for now for Gold and Silver is up. Trading against the trend, or trying to pick a high, isn’t a good idea.
… it has been pretty thrilling the way Gold price has kept on creeping and clawing its way up from 1214/1219+ turning resistance in to support, simply wonderful!… It will be interesting to see if Gold price can make it to and past 1258.88 (6/23 high) to test 61.8% retrace of H 1295 / L1205 and possibly 1264-65 inflection point… Imo Gold price should be looking to top soon unless the powers that be have other plans; wouldn’t like to see this go all the way back up to test 1290 lol….
Gold price is steadily plodding towards my first target of 1255.23, daily cloud lower boundary. I expect an initial rejection for a slight pullback before a second advance breaks through.
Agreed Alan
~50% retrace of this move up
~1250 should do the trick
thoughts?
GSR finally broke below 76 support.
On its way down to 70.
The pivot highs on upper trend channel of the various weekly dollar charts and the parallel lower channel at 5/6/16 is where today’s candle is.
If 94 doesn’t hold on the DXY it looks like next stop would be somewhere roundabout $93.20.
I must have a fake-print. This chart of XAU/USD is showing 1,294.08.
Looks like it should be 1,248. What a war zone, yikes!
Gold Ichimoku Daily Analysis
Data as at 6:30 am ET, July 21
===========================
Gold prices rose during Thursday’s trading session, eventually breaking above the brown trendline decidedly after 3 days of battle. Rising to new short-term highs, with prices trading above both the daily tenkan-sen and kijun-sen, gold is targeting the daily lower cloud boundary at 1255.23, and possibly the top cloud boundary in the 1260s. Gold prices yesterday were buoyed by a steep rise in the Euro following the hawkish tone from the ECB. Draghi told the markets that the ECB would evaluate QE in their September meeting to determine if tapering of its stimulus was to be effected. This helped ease the dollar, which paved the way for higher gold prices. Prices were also underpinned by heightened political concerns surrounding the investigations into President Trump’s campaign ties with Russia.
Currently, prices are attempting to negotiate the 1250 barrier. This is a region of significant resistance as this is where the 50-day SMA resides. It is also a psychological round number. In favour of a continued rise in prices is the positive momentum generated from a crossover buy signal in the MACD on Monday; it is still increasing in strength. But, from a daily perspective, gold prices remain below the kumo, and are therefore technically bearish. It does mean that the road forward would be paved with obstacles, and the going is likely to be choppy. Our target of 1260, a key technical retracement area, is very close, and sellers may reappear. A pullback is also quite likely, which means it is time to consider taking partial profits.
Looking forward, the battle at 1260 will be interesting to watch. Sellers are going to try to defend the downtrend and buyers are going to try to drive the market through 1260-1270 in an effort to turn the main trend to up. As far as the longer-term outlook is concerned, a sustained move over 1270 could trigger the start of a steep rally since the next major upside target is 1300. If the bears win the tussle, the first support to negotiate will be the brown trendline, now resistance-turned-support. The 1235 area would be the key battle zone should the downtrend scenario emerge.
Alan thank you so much.
time to take another look at the Alt?
the july 18th has an hourly chart as well
Lara Any update on copper? It seems to have broken threw resistance my position is pretty under water should I cut and run or hold. It feels like the top is near
For the very short term the long upper wick today indicates a downwards day tomorrow.
If price does not turn down tomorrow then it would be breaching the green trend line and this wave count would be in serious doubt. If that happens I’d take the loss. Which should be no more than 5% of equity of you’re managing risk.
But I’d expect price to move lower from here for at least one day. If it does then pull your stop down to today’s high; if that’s subsequently breached you don’t want to stay short.
If this wave count is right then price should move lower from here and strongly.
rin dang
USDXJY is in a parabolic water fall down trend. Do not know where the target is> May be the triangle apex.
Is it me or does USD/JPY looks to be in the process of reversing?
EVERYONE
I would like to contribute something to the board but I am not a chart technician. So I dug around a bit …. I compared the $GC to the 10 YR TR YIELD. I believe they are inversely traded for the most part. It looks like the TR YIELD has a little bit more room to come down just as the $GC is likely to move up a bit more. Notice the potential inverse head & shoulder in the TR YIELD? I am interested in your comments.
https://www.tradingview.com/x/VjVZmFrW/
Kyong,
Good chart. The only thing I would add is a check of the correlation using the StockCharts correlation tool. Many times we think there is a strong correlation, but this tool often proves us wrong. Like Lara would say, “the math doesn’t lie”.
That said, it looks like TNX actually has a very strong negative correlation that is pretty consistent. Brief periods in February and June (yellow) show when the correlation fades. Thanks for sharing.
Thank you
GDX continues to grind higher on declining volume. The last leg up may be extending. The first target was almost met today and the structure looks incomplete. A new second target has been added.
https://www.tradingview.com/x/piDd0kU5/
Dreamer–always appreciate your thoughts on GDX.
Thanks for the update. Really appreciate it.
Thanks guys. Let’s hope it’s right!
Should be a good shorting opportunity coming up.
Just noticed a mistake…
The targets should say “Minuette (y) = Minuette (w) @ …”, not Minuette (x)
Lara is it typical in a C of (B) for (pink) iii to be shorter than (pink) i?
No, that’s not typical.
But for (B) to reach 0.618 of (A), that’s typical.