Another test of support about 1,310 to 1,305 was expected. This is what has happened.

Summary: Expect the upwards swing to resume, which may be choppy and overlapping. The target at 1,391 may be too high; upwards movement may find strong resistance about 1,365 – 1,375.

Today’s bullish volume and a long lower candlestick wick add just a little more confidence in this view than last analysis.

New updates to this analysis are in bold.

Grand SuperCycle analysis is here.

Last in-depth historic analysis with monthly and several weekly charts is here, video is here.

There are multiple wave counts at this time at the weekly and monthly chart levels. In order to make this analysis manageable and accessible only two will be published on a daily basis, one bullish and one bearish. This does not mean the other possibilities may not be correct, only that publication of them all each day is too much to digest. At this stage, they do not diverge from the two possibilities below.

BULLISH ELLIOTT WAVE COUNT

FIRST WEEKLY CHART

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Cycle wave b may be a single zigzag. Zigzags subdivide 5-3-5. Primary wave C must subdivide as a five wave structure and may be either an impulse or an ending diagonal. Overlapping at this stage indicates an ending diagonal.

Within an ending diagonal, all sub-waves must subdivide as zigzags. Intermediate wave (4) must overlap into intermediate wave (1) price territory. This diagonal is expanding: intermediate wave (3) is longer than intermediate wave (1) and intermediate wave (4) is longer than intermediate wave (2). Intermediate wave (5) must be longer than intermediate wave (3), so it must end above 1,398.41 where it would reach equality in length with intermediate wave (3).

Within the final zigzag of intermediate wave (5), minor wave B may not move beyond the start of minor wave A below 1,236.54.

Within the diagonal of primary wave C, each sub-wave is extending in price and so may also do so in time. Within each zigzag, minor wave B may exhibit alternation in structure and may show an increased duration.

Within intermediate wave (1), minor wave B was a triangle lasting 11 days. Within intermediate wave (2), minor wave B was a zigzag lasting 2 days. Within intermediate wave (3), minor wave B was a regular flat lasting 60 days. Within intermediate wave (4), minor wave B was a regular contracting triangle lasting 40 days. Within intermediate wave (5), minor wave B may be expected to be an expanded flat, combination or running triangle to exhibit some alternation in structure. It may last as long as 40 to 60 days. So far it has lasted 37 days and the structure is incomplete.

This first weekly chart sees the upwards wave labelled primary wave A as a five wave structure. It must be acknowledged that this upwards wave looks better as a three than it does as a five. The fifth weekly chart below will consider the possibility that it was a three.

FIRST DAILY CHART

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Within the ending diagonal, intermediate wave (5) must sub-divide as a zigzag.

Minor wave B may now be either a flat or a combination. An alternate idea of a triangle for minor wave B is published in a separate chart below.

Within either a flat or combination for minor wave B, the correction of minute wave b or x may be unfolding as an expanded flat correction. When this expanded flat is complete, then a downwards swing for minute wave c or y would be expected.

Because both options of a flat or combination for minor wave B now expect minute wave b or x to be completing as an expanded flat, they both need to see a five up complete for minuette wave (c). Within the five up, subminuette wave i would be complete at the last small swing high. Subminuette wave ii may have ended at Monday’s low.

If minor wave B is unfolding as a flat correction, then minute wave c may move reasonably below the low of minute wave a at 1,307.09, and it must be a five wave structure.

If minor wave B is unfolding as a combination, then minute wave y may be a flat or triangle and may end about the same level as minute wave w at 1,307.09.

HOURLY CHART

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Subminuette wave ii may again be over.

Micro wave C may have bought price back down to test support, which is strong about 1,310 – 1,305. Micro wave C is again a complete five wave structure. The structure of micro wave C now has a clearer look with another slight new low after last analysis. Subminuette wave iii may have begun.

If it continues further, then subminuette wave ii may not move beyond the start of subminuette wave i below 1,303.08.

FIRST DAILY CHART – ALTERNATE

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This alternate daily chart is identical to the first daily chart up to the high labelled minor wave A. Thereafter, it looks at a different structure for minor wave B.

Minor wave B may be an incomplete triangle, and within it minute wave a may have been a double zigzag. All remaining triangle sub-waves must be simple A-B-C structures, and three of the four remaining sub-waves must be simple zigzags. One remaining sub-wave may be a flat correction.

Minute wave b may be unfolding upwards as a single zigzag, and within it minuette wave (b) may not move beyond the start of minuette wave (a) below 1,303.08.

This alternate wave count expects weeks of choppy overlapping movement in an ever decreasing range.

BEARISH ELLIOTT WAVE COUNT

FIFTH WEEKLY CHART

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There were five weekly charts published in the last historic analysis. This fifth weekly chart is the most immediately bearish wave count, so this is published as a bearish possibility.

This fifth weekly chart sees cycle wave b as a flat correction, and within it intermediate wave (B) may be a complete triple zigzag. This would indicate a regular flat as intermediate wave (B) is less than 1.05 the length of intermediate wave (A).

If cycle wave b is a flat correction, then within it primary wave B must retrace a minimum 0.9 length of primary wave A at 1,079.13 or below. The most common length of B waves within flats is from 1 to 1.38 times the length of the A wave. The target calculated would see primary wave B end within this range.

I have only seen two triple zigzags before during my 10 years of daily Elliott wave analysis. If this wave count turns out to be correct, this would be the third. The rarity of this structure is identified on the chart.

TECHNICAL ANALYSIS

WEEKLY CHART

Click chart to enlarge. Chart courtesy of StockCharts.com.

Price is again at support and On Balance Volume is almost at support. With volume continuing to decline, it looks reasonable to expect a turn back to an upwards swing about here.

Price is still range bound.

DAILY CHART

Click chart to enlarge. Chart courtesy of StockCharts.com.

Looking at the bigger picture, Gold has been within a large consolidation since about January 2017 (this chart does not show all of this large consolidation), and during this consolidation it is two upwards days that have strongest volume and an upwards week that has strongest volume. Volume suggests an upwards breakout may be more likely than downwards.

Currently, Gold is within a smaller consolidation that began in early January 2018. This consolidation is delineated by support about 1,310 to 1,305 and resistance (final) about 1,375. It is an upwards day during this smaller consolidation that has strongest volume, suggesting an upwards breakout may be more likely here than downwards.

With a bearish signal from On Balance Volume, price may be ready to break out of this smaller consolidation downwards. This does not support the Elliott wave count.

Price needs to close below 1,305, preferably on a strong downwards day, for confidence in a downwards breakout. If there is support from volume, then more confidence may be had (but it is not necessary for a downwards breakout).

Monday’s session completes a very bullish daily candlestick with a long lower wick in the strong support zone. With support now for upwards movement during Monday, there is a little more support today from classic technical analysis for the main Elliott wave count.

However, On Balance Volume is now at resistance. If it moves lower tomorrow, that would provide a reasonable bearish signal and the Elliott wave count would be in doubt and an alternate would need to be considered. If it moves higher tomorrow, then the support line would need to be redrawn.

GDX WEEKLY CHART

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Support about 20.80 has been tested about eight times and so far has held. The more often a support area is tested and holds, the more technical significance it has.

In the first instance, expect this area to continue to provide support. Only a strong downwards day, closing below support and preferably with some increase in volume, would constitute a downwards breakout from the consolidation that GDX has been in for a year now.

Resistance is about 25.50. Only a strong upwards day, closing above resistance and with support from volume, would constitute an upwards breakout.

With On Balance Volume again at support and price close to support, it is reasonable to expect a turn and an upwards swing about here. There is a little room though for a little more downwards movement.

GDX DAILY CHART

Click chart to enlarge. Chart courtesy of StockCharts.com.

The signal from On Balance Volume is weak because the line has a reasonable slope and is not very long held. It was tested four times though, so this is identified as a weak bearish signal. The signal makes no comment though on how far nor for how long downwards movement may result.

If On Balance Volume turns lower here tomorrow, then the trend lines would be strengthened and that would be a bearish signal. If On Balance Volume breaks above the yellow line, it should be redrawn.

Volume and candlestick wicks suggest an upwards day tomorrow.

While ADX now indicates a downwards trend, for confidence in this a breakout below support with a close below 21.30 would be necessary. If this happens with support from volume, then more confidence in a downwards trend may be had.

Published @ 11:45 p.m. EST.