The video above is a recording of a US Opening Bell webinar from June 10, 2019. We focused on the Elliott wave patterns for key markets such as gold, silver, crude oil, DXY, EURUSD, GBPUSD, NZDUSD, and USDJPY.
Waiting for a break in gold prices
Last week, gold prices popped to their highest level in nearly 14 months. The subsequent softening in gold prices this week opens the door for competing Elliott wave interpretations.
Though we can count the minimum waves in place for the three-year sideways triangle to be complete at the May 2, 2019 low, this recent rally has not pushed high enough to confirm. If the triangle that began July 2016 is finished, then gold may forge a large rally pushing deep into the $1400’s and possibly $1500. A move above the ‘B’ wave high near $1365 would help this bullish scenario.
However, we are keeping in mind the alternate count in that Friday’s high near $1348 was simply wave ‘D’ of the three-year triangle. This implies another deep correction in gold to below $1250 and possibly the $1200 zone. A break down below $1265 would add further weight to the likelihood of a continuation on the triangle pattern.
Bottom line, watch for a break above $1365 to confirm a bullish stance or a break below $1265 to temporarily delay the bullish stance until the three-year triangle is completed.
Read more: top gold trading strategies and tips
Crude oil bumps higher in an apparent relief rally
The move lower in crude oil prices from the April 2019 high appears to be taking the shape of an Elliott wave impulse. If so, we cannot count the minimum waves in place yet for the impulse. This suggests lower prices are likely on the horizon.
It appears the current Elliott wave for crude oil is wave ‘iv’. This wave may grind higher towards $55.75 and eventually meet the blue line on the four hour chart. If crude oil is successful in reaching $55.75, then we will be on the lookout for another turn lower in wave ‘v’.
Though not expected, if a rally continues up to and through $60.12, then another pattern is at play and we will need to reassess the wave picture.
Bottom line, we cannot rule out higher crude oil pricing. A bias towards lower pricing and a retest of the $50 low is maintained so long as crude oil remains below $60.12.
Elliott Wave Theory FAQ
How does Elliott Wave theory work?
Elliott Wave theory is a trading study that identifies the highs and lows of price movements on charts via wave patterns. Traders analyze the waves for 5-wave moves and 3-wave corrections to determine where the market is at within the larger pattern. Additionally, the theory maintains three rules and several guidelines on the depth of the waves related to one another. Therefore, it is common to use Fibonacci with Elliott Wave analysis. We cover these topics in our beginners and advanced Elliott Wave trading guides.
After reviewing the guides above, be sure to follow future Elliott Wave articles to see Elliott Wave Theory in action.
—Written by Jeremy Wagner, CEWA-M
Jeremy Wagner is a Certified Elliott Wave Analyst with a Master’s designation. Jeremy provides Elliott Wave analysis on key markets as well as Elliott Wave educational resources. Read more of Jeremy’s Elliott Wave reports via his bio page.
Join Jeremy in his live US Opening Bell webinar where these markets and more are discussed through Elliott wave theory.
Follow Jeremy on Twitter at @JWagnerFXTrader .