Further sideways movement leaves both Elliott wave counts the same.

Summary: The main wave count expects the upwards trend may now resume to a new target at 2,147. A new low below 1,677.64 would see this main wave count invalidated and most likely discarded.

An alternate wave count is very bearish. A short-term target is at 1,734. A mid-term target is at 887. A new low below 1,677.64 would provide some confidence in this wave count.

Overall, a lack of support from volume and range for the last few sessions suggests more downwards movement immediately ahead. This looks like a small consolidation within an ongoing downwards trend.

Grand SuperCycle analysis and last monthly charts are here.

MAIN 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 on 3 December 2015.

If Gold is in a new bull market, then it should begin with a five wave structure upwards on the weekly chart.

Cycle wave I fits as a five wave impulse with reasonably proportionate corrections for primary waves 2 and 4.

Cycle wave II fits as a double flat. However, within the first flat correction labelled primary wave W, this wave count needs to ignore what looks like an obvious triangle from July to September 2016 (this can be seen labelled as a triangle on the second weekly chart on prior analysis here). This movement must be labelled as a series of overlapping first and second waves. Ignoring this triangle reduces the probability of this wave count in Elliott wave terms.

Cycle wave IV may be a complete triple zigzag. Triple zigzags are not rare structures, but they are not common. The probability of this wave count is further reduced in Elliott wave terms. This is one reason why an alternate is still considered.

Cycle wave V may have begun. Within cycle wave V: Primary wave 1 may be over at the last high, and primary wave 2 may not move beyond the start of primary wave 1 below 1,677.64.

DAILY CHART

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A target is calculated for cycle wave V. If this target is wrong for this wave count, then it may be too low. As price approaches the target, if the structure is incomplete, then a higher target may be calculated.

Primary wave 1 within cycle wave V may be complete.

Primary wave 2 may be complete as a deep zigzag, lasting two weeks.

If it continues lower, then primary wave 2 may not move beyond the start of primary wave 1 below 1,677.64.

HOURLY CHART

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Minute wave ii is labelled as a complete triple zigzag. At this stage, this is the only solution I can see that meets all Elliott wave rules for this wave count. All subdivisions fit, but triple zigzags should have a strong slope. This structure is sideways and not sloped, so it does not have the right look.

Within primary wave 3, minute wave ii may not move beyond the start of minute wave i below 1,762.07.

A new high above 1,794.09 would provide some confidence in labelling on this hourly chart; it would indicate at least a short-term bounce if not a trend change may have occurred. A breach of the channel would add further confidence.

ALTERNATE ELLIOTT WAVE COUNT

WEEKLY CHART

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The bigger picture for this alternate Elliott wave count sees Gold as within a bear market, in a three steps back pattern that is labelled Grand Super Cycle wave IV on monthly charts. Grand Super Cycle wave IV may be subdividing as an expanded flat pattern.

Super Cycle wave (b) within Grand Super Cycle wave IV may be a complete double zigzag. This wave count expects Super Cycle wave (c) to move price below the end of Super Cycle wave (a) at 1,046.27 to avoid a truncation and a very rare running flat. The target calculated expects a common Fibonacci ratio for Super Cycle wave (c).

Super Cycle wave (c) may have begun with a leading expanding diagonal for cycle wave I. Leading expanding diagonals in first wave positions are uncommon, so the probability of this wave count is reduced. However, it has a good fit and must be considered.

Second wave corrections to follow leading diagonals in first wave positions are usually very deep. Cycle wave II is deep and the structure may be complete; so far it is following a common pattern. If it continues higher, then cycle wave II may not move beyond the start of cycle wave I above 2,070.78.

DAILY CHART

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A target is calculated for cycle wave III.

Primary wave 1 within cycle wave III may be nearing an end, but for this wave count may not yet be complete. If intermediate wave (4) within primary wave 1 continues higher, then it may not move into intermediate wave (1) price territory above 1,861.17.

Intermediate wave (4) may be a complete regular contracting triangle. A target for intermediate wave (5) is calculated.

Draw an Elliott channel about primary wave 1. When this channel is breached by upwards movement, then that may be used as an indication that primary wave 1 should be over and primary wave 2 may then be underway.

HOURLY CHART

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Intermediate wave (4) may have been a regular contracting triangle. If minor wave E within the triangle continues any higher, then it may not move beyond the end of minor wave C above 1,793.84.

The most common Fibonacci ratio for intermediate wave (5) would be equality in length with intermediate wave (1).

Following fourth wave triangles for Gold, fifth waves can be surprisingly brief and short. If the target is wrong, then it may be too low; intermediate wave (5) could be surprisingly brief and short.

When primary wave 1 may be complete, then a multi-week to multi-month bounce or consolidation for primary wave 2 may be expected.

TECHNICAL ANALYSIS

Note: There is no data from StockCharts for Gold or GDX at this time (6:45 EST), so no further comments may be made. The session is a small range day, so this portion of the analysis would unlikely change.

WEEKLY CHART

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

The upwards trend may have ended, for now. There is now a bearish candlestick reversal pattern in a Hanging Man that has bearish confirmation in the following candlestick.

A small inside week is a small pause after the prior strong downwards week. This looks like a small pause within an ongoing downwards movement. If ADX increases, then it would give a strong bearish signal.

DAILY CHART

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

If next support about 1,765 is breached, then this downwards movement may end about 1,750.

While the Bullish Engulfing pattern was strong, it lacked support from volume. It is now followed by four small range sessions with declining volume. This looks like a pause within an ongoing downwards trend, which fits expectations for the alternate wave count for the short term.

A small pennant pattern may be forming. A target calculated from the flag pole is at 1,632.

GDX WEEKLY CHART

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

A strong downwards week that has push from volume is followed by a small pause. This looks like a pause within an ongoing downwards trend.

GDX DAILY CHART

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

The measuring gap gives a target at 33.78.

A target from the pennant pattern is at 29.41.

Published @ 07:25 p.m. ET.

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New updates to this analysis are in bold.

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