In yesterday’s analysis members were warned to look for a small bounce to about 1,472 for the short term. A small range upwards day with a high at 1,466.29 fits this expectation.

Summary: For the very short term, look out for this small bounce to end about 1,472 or to test the lower triangle trend line (daily technical analysis chart). Thereafter, expect the downwards trend to resume. This upwards bounce is weak and looks like a counter trend movement.

The Elliott wave target is at 1,348.

A target calculated from the adjusted triangle is about 1,431.

For the very short term, a new high above 1,514.29 would add some confidence in a more bullish outlook. The target would then be at 1,567, 1,635 or 1,693.

For the bigger picture, the bearish Elliott wave count expects a new downwards trend to last one to several years has begun. The alternate bearish wave count looks at the possibility that one final high to 1,559 is required first.

The bullish Elliott wave count expects a primary degree fourth wave has completed and the upwards trend has resumed.

Grand SuperCycle analysis is here.

Monthly charts were last published here.

BEARISH ELLIOTT WAVE COUNT

WEEKLY CHART

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It is possible that Super Cycle wave (b) is nearly complete as a double zigzag.

The first zigzag in the double is labelled cycle wave w. The double is joined by a three in the opposite direction, a triangle labelled cycle wave x. The second zigzag in the double is labelled cycle wave y.

The purpose of the second zigzag in a double is to deepen the correction. Cycle wave y has achieved this purpose.

A new low below 1,346.45 would add strong confidence to this wave count. At that stage, the bullish Elliott wave count would be invalidated.

A wide best fit channel is added in light blue. This channel contains all of Super Cycle wave (b) and may provide resistance and support. Copy this channel over to daily charts.

Super Cycle wave (c) must subdivide as a five wave structure, most likely an impulse. It may last several years. It would be very likely to make new lows below the end of Super Cycle wave (a) at 1,046.27 to avoid a truncation.

DAILY CHART

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Classic analysis now reasonably supports this wave count.

Cycle wave y may be a complete zigzag. Within both of primary waves A and C, there is good proportion between intermediate waves (2) and (4). Within both of primary waves A and C, there is good alternation in structure of intermediate waves (2) and (4).

Within cycle wave y, there is no Fibonacci Ratio between primary waves A and C.

If there has been a trend change at Super Cycle degree, then a five down needs to develop on the daily and weekly charts. So far that is incomplete. It will be labelled intermediate wave (1).

HOURLY CHART

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A channel is drawn about subminuette wave i using Elliott’s technique. This channel is now breached by upwards movement, which is an indication that the impulse of subminuette wave i is over and subminuette wave ii is underway. Subminuette wave ii may be completing as a relatively shallow zigzag.

Subminuette wave ii may not move beyond the start of subminuette wave i above 1,514.29.

This wave count now expects that soon there may be a series of four overlapping first and second waves complete. An increase in downwards momentum would be expected.

Gold typically exhibits swift strong fifth waves. This tendency is especially prevalant for fifth waves to end third wave impulses. It is possible that any one or more of subminuette wave v, minuette wave (v) or minute wave v may be particularly strong, ending in capitulation spikes.

ALTERNATE DAILY CHART

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It is possible that the double zigzag for Super Cycle wave (b) may be incomplete and may yet require one more high.

Within cycle wave y, primary wave A may have been over at the last high. Primary wave B may now be complete as a double zigzag. Primary wave B may not move beyond the start of primary wave A below 1,266.61.

Primary wave C would be expected to find strong resistance and end at the upper edge of the blue best fit channel copied over from the weekly chart.

BULLISH ELLIOTT WAVE COUNT

WEEKLY CHART

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This wave count sees the the bear market complete at the last major low for Gold in November 2015.

If Gold is in a new bull market, then it should begin with a five wave structure upwards on the weekly chart. However, the biggest problem with this wave count is the structure labelled cycle wave I because this wave count must see it as a five wave structure, but it looks more like a three wave structure.

Commodities often exhibit swift strong fifth waves that force the fourth wave corrections coming just prior and just after to be more brief and shallow than their counterpart second waves. It is unusual for a commodity to exhibit a quick second wave and a more time consuming fourth wave, and this is how cycle wave I is labelled. This wave count still suffers from this very substantial problem, and for this reason the bearish wave count is still considered because it has a better fit in terms of Elliott wave structure.

Cycle wave II subdivides well as a double combination: zigzag – X – expanded flat.

Cycle wave III may have begun. Within cycle wave III, primary waves 1 and 2 may now be complete. Primary wave 3 has now moved above the end of primary wave 1 meeting a core Elliott wave rule. It has now moved far enough to allow room for primary wave 4 to unfold and remain above primary wave 1 price territory. Primary wave 4 may not move into primary wave 1 price territory below 1,346.45.

Cycle wave III so far for this wave count would have been underway now for 65 weeks. It exhibits some support from volume and increasing ATR. This wave count has some support from classic technical analysis.

The channel drawn about cycle wave III is an adjusted Elliott channel. The lower edge is pulled lower.

Add the wide best fit channel to weekly and daily charts.

DAILY CHART

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Primary wave 4 may be complete as a double zigzag. Primary wave 4 may have lasted 49 sessions, just six more than primary wave 2, which lasted 43 sessions. The proportion remains very good for this part of the wave count.

A target for cycle wave III is calculated also now at primary degree. If price reaches the first target and keeps rising, then the second higher target may be used.

If it continues any further, then primary wave 4 may not move into primary wave 1 price territory below 1,346.45.

HOURLY CHART

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Within the second zigzag of intermediate wave (Y), minor wave C may again be a complete five wave structure.

More confidence that this downwards wave is complete may be had now that the channel about minor wave C is very clearly breached by downwards movement.

For this wave count, within primary wave 5, no second wave correction may move beyond its start below 1,446.68.

TECHNICAL ANALYSIS

MONTHLY CHART

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

Overall, this chart is bullish. However, with RSI reaching overbought at the last high, upwards movement may be limited.

The last two months of sideways movement look like a consolidation within an ongoing upwards trend.

Some suspicion regarding the current upwards trend may be warranted by bearish divergence between price and On Balance Volume at the last lows. Also, at the last high price has made a substantial new high above April 2018, but On Balance Volume is flat.

WEEKLY CHART

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

When trends reach very extreme, candlestick reversal patterns should be given weight. The Dark Cloud Cover bearish reversal pattern is given more bearish weight from the long upper wick.

Last week is very strongly bearish and strongly supports the main Elliott wave count.

DAILY CHART

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

Since the last high on the 4th of September, there is now a series of swing lows and swing highs.

After a breakout from the triangle, the target is to be about 1,431.

Look for any higher bounces to possibly test resistance at the lower edge of the triangle trend line, if price gets up that high.

So far today the small bounce looks weak. It has a small range and relatively weak volume. This looks like a small counter trend movement and not a sustainable low.

GDX WEEKLY CHART

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Last weekly candlestick for GDX is very bearish and switches the short-term and mid-term picture to bearish.

GDX DAILY CHART

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GDX has made a new swing low. There is now a series of three lower highs and four lower lows from the high on the 4th of September. It still looks like GDX may have had a trend change. This view should remain dominant while the last swing high at 28.18 on the 31st of October remains intact.

The small bounce looks weak. It lacks support from volume, has a small range and a long upper wick on the last candlestick.

Published @ 06:51 p.m. EST.

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New updates to this analysis are in bold.