An upwards session today favours the second alternate Elliott wave count from yesterday.

Today both Elliott wave counts are adjusted to better fit with current movement.

Summary: Both the main and first alternate Elliott wave counts now expect overall upwards movement to a short-term target at 1,843. Thereafter, a strong downwards wave should move below 1,793.21.

The second alternate Elliott wave count considers the possibility still that the bounce is over and a new wave down to 1,569 is underway.

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.

Double flats are fairly rare structures. The probability of this wave count is further reduced.

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 an incomplete zigzag. Intermediate wave (B) within primary wave 2 may be continuing higher as a double zigzag.

Primary wave 2 may not move beyond the start of primary wave 1 below 1,677.64.

HOURLY CHART

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Within intermediate wave (B): Minor wave X may be over at the low on the 23rd of July, and minor wave Y may have begun and may subdivide as a zigzag.

A target is calculated for minor wave Y.

Minute waves a and b within minor wave Y may be complete. If minute wave b continues lower, then it may not move beyond the start of minute wave a below 1,793.21.

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.

It is possible that primary wave 2 may not be over and may continue higher as a double zigzag. A target is calculated for primary wave 2 to end.

Primary wave 2 may not move beyond the start of primary wave 1 above 1,915.42.

HOURLY CHART

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Within primary wave 2: Intermediate wave (X) may be over at the low on the 23rd of July, and intermediate wave (Y) may have begun and may subdivide as a zigzag.

A target is calculated for intermediate wave (Y).

Minor waves A and B within intermediate wave (Y) may be complete. If minor wave B continues lower, then it may not move beyond the start of minor wave A below 1,793,21.

SECOND ALTERNATE DAILY CHART

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A new low below 1,677.64 would see this wave count become the main wave count again.

Primary waves 1 and 2 within cycle wave III may be complete.

Primary wave 3 may have begun. A target is calculated for primary wave 3. Within primary wave 3, no second wave correction may move beyond its start above 1,832.87.

TECHNICAL ANALYSIS

WEEKLY CHART

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Volume is bearish for the short term. The last few upwards weeks came with weak range and volume. But although the last downwards week now has some push from volume, the range is small.

DAILY CHART

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Price has closed below support at 1,800 but not convincingly. On Balance Volume is also at support.

GDX WEEKLY CHART

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Last week downwards movement has run out of steam with a small range and weaker volume. Stochastics is oversold, but price is not at support; some bounce within a downwards swing may unfold next week.

GDX DAILY CHART

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Price is consolidating with resistance about 35 and support about 33.0. A breakout is required before confidence in the next direction may be had.

An upwards swing within the consolidation is now underway. Look for price to continue higher until it reaches resistance and Stochastics reaches overbought.

Published @ 06:56 p.m. ET.

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1. Always trade with stops.

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New updates to this analysis are in bold.

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