Updates to analysis throughout the week have expected a continuation of upwards movement towards the target. This is exactly what has happened.
Summary: The next target is 1,295. Look out for a possible further increase in upwards momentum towards this target. A relatively small blow off top may occur in coming days.
The final target for this bounce to end is about 1,305 – 1,310.
New updates to this analysis are in bold.
Grand SuperCycle analysis is here.
Last historic analysis with monthly charts is here.
Only three remaining wave counts have a reasonable probability and are published below: a triangle (the preferred wave count), a double zigzag, and a combination.
MAIN ELLIOTT WAVE COUNT
WEEKLY CHART – TRIANGLE
Click chart to enlarge.
Cycle wave b may be an incomplete regular contracting triangle. Primary wave E may not move beyond the end of primary wave C above 1,365.68.
Within primary wave E, intermediate waves (A) and (B) may be complete. Intermediate wave (C) must subdivide as a five wave structure. Within intermediate wave (C), minor wave 2 may not move beyond the start of minor wave 1 below 1,181.06.
Four of the five sub-waves of a triangle must be zigzags, with only one sub-wave allowed to be a multiple zigzag. Wave C is the most common sub-wave to subdivide as a multiple, and this is how primary wave C for this example fits best. Primary wave E would most likely be a single zigzag. It is also possible that it may subdivide as a triangle to create a rare nine wave triangle.
There are no problems in terms of subdivisions or rare structures for this wave count. It has an excellent fit and so far a typical look.
When primary wave E is a complete three wave structure, then this wave count would expect a cycle degree trend change. Cycle wave c would most likely make new lows below the end of cycle wave a at 1,046.27 to avoid a truncation.
It is possible now that primary wave E may end early in January 2019. Some reasonable weakness should be expected at its end. Triangles often end with declining ATR, weak momentum and weak volume.
DAILY CHART – TRIANGLE
Click chart to enlarge.
Primary wave E may now be nearing its final stages for this wave count.
Primary wave E should subdivide as a zigzag. Intermediate waves (A) and (B) may now be complete. Intermediate wave (C) may be underway.
Within intermediate wave (C), minor wave 1 fits perfectly as a five wave impulse. Minor wave 2 is a deep zigzag.
Minor wave 3 may be an almost complete impulse, now within the final fifth wave. The target is now calculated at two degrees and so has a higher probability.
Gold often exhibits swift strong fifth waves. This tendency is especially prevalent in fifth waves to end third wave impulses. Look out for a possible blow off top to end minute wave v of minor wave 3.
Although the triangle for cycle wave b is expected to end with weakness, it is still possible that a smaller blow off top may occur at the end of minor wave 3 just ahead.
When minor wave 3 is complete, then minor wave 4 may unfold over about two to four weeks. Minor wave 4 may not move into minor wave 1 price territory below 1,241.88.
A target for primary wave E is the strong zone of resistance about 1,305 to 1,310. Primary wave E is most likely to subdivide as a zigzag (although it may also subdivide as a triangle to create a rare nine wave triangle). It may last a total Fibonacci 21 or 34 weeks. So far it has lasted 19 weeks. Primary wave E may not move beyond the end of primary wave C above 1,365.68.
HOURLY CHART – TRIANGLE
Click chart to enlarge.
The hourly chart focusses on the end of minute wave v. Minute wave v must subdivide as a five wave structure, either an impulse or ending diagonal. An impulse is much more likely as these are more common structures.
So far minuette waves (i) through to (iv) may be complete.
Minuette wave (v) may subdivide as either an impulse or an ending diagonal. So far an impulse looks more likely. If overlapping within minuette wave (v) develops, then a diagonal would be indicated.
So far the structure of minuette wave (v) looks incomplete.
The target is widened to a small zone now calculated at three degrees. The lower edge of the zone is calculated at the lowest degree, so this should be favoured.
WEEKLY CHART – DOUBLE ZIGZAG
Click chart to enlarge.
It is possible that cycle wave b may be a double zigzag or a double combination.
The first zigzag in the double is labelled primary wave W. This has a good fit.
The double may be joined by a corrective structure in the opposite direction, a triangle labelled primary wave X. The triangle would be about three quarters complete.
Within the triangle of primary wave X, intermediate wave (C) should be complete. Within intermediate wave (D), minor waves A and B may be complete. Minor wave C must subdivide as a five wave structure. Within minor wave C, minute wave ii may not move beyond the start of minute wave i below 1,181.06.
Intermediate wave (D) would most likely subdivide as a single zigzag.
This wave count may now expect choppy overlapping movement in an ever decreasing range for several more months.
Primary wave Y would most likely be a zigzag because primary wave X would be shallow; double zigzags normally have relatively shallow X waves.
Primary wave Y may also be a flat correction if cycle wave b is a double combination, but combinations normally have deep X waves. This would be less likely.
This wave count has good proportions and no problems in terms of subdivisions.
WEEKLY CHART – COMBINATION
Click chart to enlarge.
If cycle wave b is a combination, then the first structure in a double may be a complete zigzag labelled primary wave W.
The double may be joined by a three in the opposite direction, a zigzag labelled primary wave X.
The second structure in the double may be a flat correction labelled primary wave Y. My research on Gold so far has found that the most common two structures in a double combination are one zigzag and one flat correction. I have found only one instance where a triangle unfolded for wave Y. The most likely structure for wave Y would be a flat correction by a very wide margin, so that is what this wave count shall expect.
Within a flat correction for primary wave Y, the current downwards wave of intermediate wave (B) may be a double zigzag. Intermediate wave (B) must retrace a minimum 0.9 length of intermediate wave (A) at 1,147.34. Intermediate wave (B) may move beyond the start of intermediate wave (A) as in an expanded flat.
No upper invalidation point is given on this chart. Minor wave X may still continue higher. There is no Elliott wave rule stating a minimum nor maximum length for X waves within multiples.
Because the minimum requirement for intermediate wave (B) is not yet met, this wave count requires that intermediate wave (B) continues lower. This is the most immediately bearish of all weekly wave counts.
When intermediate wave (B) is complete, then intermediate wave (C) would be expected to make at least a slight new high above the end of intermediate wave (A) at 1,365.68 to avoid a truncation. Primary wave Y would be most likely to end about the same level as primary wave W at 1,374.91, so that the whole structure takes up time and moves price sideways, as that is the purpose of double combinations.
While double combinations are very common, triples are extremely rare. I have found no examples of triple combinations for Gold at daily chart time frames or higher back to 1976. When the second structure in a double is complete, then it is extremely likely (almost certain) that the whole correction is over.
Minor wave X now only fits as a possible triple zigzag which could possibly be complete.
While double zigzags are fairly common, triples are reasonably rare. I have found four examples at the daily chart level or higher for Gold back to 1976.
However, X waves within multiple zigzags (which is the structure seen here for intermediate wave (B) ) are very rarely themselves multiples.
The probability of this wave count is substantially reduced. It no longer warrants a daily chart.
TECHNICAL ANALYSIS
WEEKLY CHART
Click chart to enlarge. Chart courtesy of StockCharts.com.
On Balance Volume has made a lower low than its prior low at the end of November 2015. This divergence is extremely bearish but does not rule out a consolidation unfolding here; the divergence does strongly support the Triangle wave count, which expects a consolidation or bounce up to test resistance now and then a continuation of a major bear market. It could also support the flat wave count that allows for a new low below 1,046.27 in coming months.
Although volume has declined for this week, it was not a full trading week. To judge the short-term volume profile it is necessary to look inside the week at daily volume patterns.
Next resistance ahead is strong about 1,305 – 1,310.
DAILY CHART
Click chart to enlarge. Chart courtesy of StockCharts.com.
Look out for an end to this upwards trend coming soon: ADX is almost extreme, the short-term volume profile is slightly bearish, and RSI has just reached overbought. That does not mean upwards movement must end here, only that it might end quite soon.
Look for a candlestick reversal pattern to possibly signal the end of this upwards wave and either a trend change or an interruption to the trend by a consolidation.
GDX WEEKLY CHART
Click chart to enlarge. Chart courtesy of StockCharts.com.
The Gravestone doji’s forte is in calling market tops. This weekly candlestick is a bearish reversal pattern.
GDX DAILY CHART
Click chart to enlarge. Chart courtesy of StockCharts.com.
Price has been very strongly rejected just above 20.80.
The very strong Bearish Engulfing reversal pattern indicates the upwards trend is now over. Expect GDX to go on to make new lows below 17.28.
Published @ 10:05 p.m. EST.
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Follow my two Golden Rules:
1. Always trade with stops.
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Updated daily chart for markets before close of NY session 4th January:
Sorry everybody, I’m needing more time on the hourly chart before I can figure out how to label all the little subdivisions.
But right now I would rather draw your attention to the slightly larger picture at the daily chart level.
The target was met and very slightly exceeded. Now there is a Bearish Engulfing candlestick pattern on the daily chart possibly forming (we won’t know for sure until the session has closed). Coming right after the target, this is a strong indication minor wave 3 should be over and now minor wave 4 should have begun today.
I hope members took profits after the target was hit. If you did, that could have been a perfect trade and a great start to the new year.
I’ll expect now choppy overlapping movement for about 2-4 weeks. A sideways consolidation; a flat, triangle or combination for minor wave 4. Not a good trading opportunity.
When minor wave 4 is done, then a final short sharp upwards thrust for minor wave 5 will be expected to the final target. And that will be the end of cycle wave b!
I do hope members are prepared for a long downwards wave for cycle wave c after the triangle for cycle wave b ends. I hope you have the option to short gold.
Gold looks like it could have formed a rounded bottom. I wonder if there’s a valued wave count that suggests Gold has now bottomed out?
Gold bear markets tend to last about 20 years if you look at the long term.
Lara’s 2nd count, “Double ZZ” is similar to the main count, but the big triangle breaks upward. That could give gold a very powerful move up to above 1,500. I think this is likely. That’s also the count EWI shows in the link I posted a few days ago below in this feed.
After the move above 1,500, then gold may move down to new lows below 1,000.
Thanks Dreamer I will check it out. I like the sound of that wave count.
I don’t know about that, I think the low in December 2015 looks too much like a V to be part of a good looking rounded bottom.
And as Dreamer notes, the double zigzag count is pretty bullish (after more sideways movement)
This is the last day of my annual semi holiday. I thank all members very much for your patience and support.
I have had a fantastic two weeks, the surf came to my home breaks with a vengeance. I am today completely surfed out, after 6 days in a row of good sized surf and up to two sessions a day, 3 hrs each… my arms are noodled, I’m sunburned and totally stoked.
I’m refreshed, and ready to fully get back into it tomorrow.
End of week analysis will be published this weekend as normal, full analysis resumes next week.
End of day update for the main Gold wave count:
Technical Analysis:
There is still a little support from volume. The trend is now extreme, but this can remain so and become more extreme yet. Next resistance above is strong at 1,300 to 1,310.
With a very clear upwards trend expect it to continue still until we can see a candlestick reversal pattern. This chart supports the main Elliott wave count.
Update for the preferred Elliott wave count:
Primary wave E continues to unfold as expected. The target and invalidation point remain the same.
Intermediate (C) needs to complete as a five wave structure. Within that, minor wave 4 should be obvious on the daily chart. That hasn’t started yet.
Still a warning to look out for the potential for a small blow off top to end minor wave 3.
Members should all have nice profits to start the new year on Gold.
Updated hourly chart before NY close on 3rd Jan:
Within minuette (v) there is so much overlapping, I cannot yet see a complete impulse for the middle of it, subminuette iii. Subminuette iii may only subdivide as an impulse.
So my conclusion today is the target now looks too low. The structure is incomplete. Expect at least one more day of upwards movement.
It doesn’t look like it at the moment, but there is still the possibility of a sharp upwards thrust to end minor wave 3 just ahead. Again, be aware of this possibility.
If members are holding long positions you may like to now watch the market more closely. If price starts to rocket upwards higher, watch it very closely for a reversal. If you then see a reversal, exit there. On the hourly chart might be best to view that, not a one or five minute, that shows up too much noise.
End of day update 2nd January 2019:
TA:
A bit more support today for upwards movement. Price has made a higher high and the balance of volume is upwards, volume has increased.
The doji again presents a small pause, and like the last one may be only a pause within an ongoing trend. It is not itself a reversal signal.
The trend is now extreme and Stochastics has been overbought for a while, but RSI is not overbought and the single divergence with price is weak. This is not enough to look for a high here, but know that it is now fairly likely quite close.
Daily chart:
This is unfolding as expected. This wave count remains the same, the target remains the same, the invalidation point remains the same.
Classic TA supports this wave count.
Look out for the potential for a small blow off top to end minor wave 3 just ahead.
Updated hourly chart before NY close:
There’s still too much overlapping to see a complete minuette wave (v). The middle could have now passed.
Two more little fourth wave corrections are needed; micro wave 4 then subminuette wave iv. Each must remain above it’s respective first wave price territory.
Still a warning for the potential (not certainty) of a small blow off top in the next few sessions.
Happy New Year every one .
Dear All, Happy New Year and best wishes for 2019. Lara’s analysis is as always very fascinating. I am sure her hard work, dedication and consistency must have paid dividends to members. May you all continue reap in the fruits of Lara’s labor of love for the year 2019 also.
Very Best wishes
Syed
Best wishes to all in 2019!
Free post from EWI’s Steven Hochberg may be of interest:
Summary:
~ Shows the stock market has topped… Has it?
~ Shows the USD may have topped
~ Shows Gold’s triangle may break upward [similar to Lara’s Double ZZ count] ( although I know Lara won’t approve of the multiples as labeled for legs C & D of the triangle as wave B is already a multiple. Why does EWI do that? Questions that amuse us!!!
https://www.elliottwave.com/US-Markets/Dont-Panic?rcn=comem123118clubez&tcn=EZIND&sc_camp=D85BE26FE5D442818E285F54D59CAEB1&utm_source=ewi&utm_medium=emdep&utm_campaign=ezn&utm_content=free-STU
Happy New Year every one!!
Other indicators of PM sector shows Lara’s double zz count will become the primary count in near future .
A major trend change is taking place in P sector.
End of day update for 31st December 2018:
Technical Analysis:
Volume and ATR are declining as price moves higher, this may be due to the holiday season though. It may also indicate minor wave 3 could be over very soon.
With ADX now extreme minor wave 3 may be near its end.
Elliott wave daily chart for Gold:
The target, invalidation point and channel all remain the same. No change.
Updated hourly chart before NY closes:
I still can’t see a completed structure for minor wave 3. Maybe one more day up to the target?
I’ll be back after the session closes and StockCharts have volume data to give you an end of day update.
Notice to all EWG daily members:
We are now entering the second week of my partial holiday. The same as last week, I will be here in comments to provide a quick updated hourly chart before NY closes, time permitting in my morning in NZ. I manage this almost every day.
After each NY session closes this week, I will come into comments and provide you an updated TA and daily EW chart, with a comment (summary) for each.
If the wave count changes or something really big or unusual happens, I’ll do a full update of analysis.
Otherwise, thank you all so very much for your support this year. And thank you for your understanding that I need to take at least a semi-holiday in order to continue to provide you with analysis long term.
It’s New Year’s Eve here in NZ (living in the future down here) and so I wish you all a very Happy New Year. Let us all hope that this cycle wave b ends soon and we can focus on a new clearer trend for Gold.
Happy New year to you too Lara.