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All four Elliott wave counts remain valid. The most recent movement has a better fit in terms of structure for Elliott wave counts 2 and 4.

Members should use their own preferred technical analysis tools to judge for themselves which wave count they can use as a road map for the immediate future. One by one price will invalidate wave counts until we have one left.

Summary: Gold is in a sideways consolidation phase which began on March 27th. Since price entered the consolidation phase the strongest volume is on down days, indicating that when the breakout comes it may be more likely to be down. Volume towards the end of this week is declining, which often happens towards the end of a consolidation phase. However, the Elliott wave picture remains remarkably unclear. While price remains below 1,209.43 and above 1,178.59 multiple wave counts will remain valid. The very short term still sees all wave counts expecting at least some downwards movement.

Click on charts to enlarge.

To see weekly charts for bull and bear wave counts go here. Wave counts 1 and 2 follow the weekly bull count, wave counts 3 and 4 follow the weekly bear count.

Wave Count #1

Gold Elliott Wave Chart Daily 2015

So far within cycle wave b there is a 5-3 and an incomplete 5 up. This may be intermediate waves (A)-(B)-(C) for a zigzag for primary wave A, or may also be intermediate waves (1)-(2)-(3) for an impulse for primary wave A. Within cycle wave b primary wave A may be either a three or a five wave structure.

Intermediate wave (A) subdivides only as a five. I cannot see a solution where this movement subdivides as a three and meets all Elliott wave rules. This means that intermediate wave (B) may not move beyond the start of intermediate wave (A) below 1,131.09. Intermediate wave (B) is a complete zigzag. Because intermediate wave (A) was a leading diagonal it is likely that intermediate wave (C) will subdivide as an impulse to exhibit structural alternation. If this intermediate wave up is intermediate wave (3) it may only subdivide as an impulse.

At 1,320 intermediate wave (C) would reach equality in length with intermediate wave (A), and would probably end at the upper edge of the maroon channel. At 1,429 intermediate wave (C) or (3) would reach 1.618 the length of intermediate wave (A) or (1). If this target is met it would most likely be by a third wave and primary wave A would most likely be subdividing as a five wave impulse.

Within intermediate wave (C) minor wave 2 is seen for this first wave count as an expanded flat correction. These are very common structures. It may not move beyond the start of minor wave 1 below 1,142.82.

Within minor wave 2 expanded flat minute wave c must subdivide as a five wave structure.

Pros:

1. Expanded flat corrections are very common structures.

2. Minute wave b up looks like a three on the daily chart.

Cons:

1. Within minute wave c subminuette wave ii is showing up on the daily chart, which is unusual for Gold.

2. Within minute wave c subminuette wave ii has lasted 2 days on the daily chart, which is longer than minuette wave (i) one degree higher. It should be quicker, not longer.

3. Subminuette wave ii breaches a base channel drawn about minuette waves (i) and (ii) one degree higher (this is drawn on the hourly chart below).

4. Micro wave 2 shows up as a green candlestick on the daily chart. It is unusual for a low degree wave within a smaller movement to do this for Gold.

Within minuette wave (iii) no second wave correction may move beyond its start above 1,209.22.

GOLD Elliott Wave Chart 2015

The green channel is a base channel drawn about minuette waves (i) and (ii). Subminuette wave ii clearly breaches this channel. Sometimes this happens, but more commonly a lower degree second wave should find support or resistance at a base channel drawn about a higher degree wave. This breach of the base channel indicates this wave count may be wrong.

So far within minute wave c down there may now be three first and second waves complete. This indicates a strong and imminent increase in downwards momentum.

Subminuette wave ii completed as a zigzag. Within it (and this is seen in the same way for wave counts 1 and 3) there is an expanded flat for submicro wave (4). Looking at minuscule wave B on the five minute chart, this movement fits better as a five wave impulse than a three wave zigzag, and this wave count must see it as a three wave zigzag.

At 1,157 minute wave c would reach 1.618 the length of minute wave a.

Micro wave 2 may not move beyond the start of micro wave 1 above 1,209.22.

A new low below 1,184.04 would invalidate wave count #2.

Wave Count #2

Gold Elliott Wave Chart Daily 2015

This wave count is identical to wave count #1 up to the high labelled minor wave 1. Thereafter, instead of minor wave 2 continuing it sees minor wave 2 as complete, and now within minor wave 3 minute waves i and ii complete.

Pros:

1. Minute wave ii looks like a clear three wave movement now on the daily chart.

2. Minor wave 3 should show its corrections for minute waves ii and iv clearly on the daily chart.

3. The most recent movement up to Thursday’s high subdivides best as a five wave structure on the hourly chart.

Cons:

1. Minute wave ii clearly and strongly breaches the lower edge of a base channel drawn about minor waves 1 and 2, one degree higher.

2. Minute wave ii is twice the duration of minor wave 2 one degree higher.

3. The upwards wave of minute wave i looks like a three on the daily chart, but it should be a five.

Within minute wave iii no second wave correction may move beyond its start below 1,184.04.

A new high above 1,209.22 would invalidate wave counts 1 and 3. A new high above 1,224.35 would fully invalidate wave count 4.

GOLD Elliott Wave Chart 2015

At 1,304 minute wave iii would reach 2.618 the length of minute wave i.

Minuette wave (ii) is still incomplete. Upwards movement for Friday’s session may have been a continuation of subminuette wave b as a double zigzag. At 1,194 subminuette wave c would reach equality in length with subminuette wave a, and minuette wave (ii) would end at the 0.618 Fibonacci ratio of minuette wave (i).

Minuette wave (ii) may not move beyond the start of minuette wave (i) below 1,184.04.

When minuette wave (ii) is a complete corrective structure then this wave count expects to see a strong increase in upwards momentum as the middle of a third wave begins.

Wave Count #3

Gold Elliott Wave Chart Daily 2015

This wave count follows the bear weekly count which sees primary wave 5 within cycle wave a as incomplete. At 957 primary wave 5 would reach equality in length with primary wave 1.

So far within intermediate wave (3) minor waves 1 and now 2 should be over.

At 1,059 minor wave 3 would reach equality in length with minor wave 1. Minor wave 1 is extended, and this target would see minor wave 3 also extended. A short fifth wave would be expected to follow.

Within minor wave 3 minute wave ii and minuette wave (ii) must be over for this wave count. Within the middle of this third wave no second wave correction may move beyond its start above 1,209.22.

This wave count expects a strong increase in downwards momentum.

Pros:

1. It is extremely common for third waves to begin with a series of overlapping first and second wave corrections.

Cons:

1. Within minor wave 1 there is gross disproportion between minute waves iv and ii: minute wave iv is more than thirteen times the duration of minute wave ii giving minor wave 1 a three wave look.

2. On the hourly chart minuette wave (ii) breaches the upper edge of a base channel drawn about minute waves i and ii, one degree higher.

A new low below 1,184.04 would invalidate wave count 2. A new low below 1,142.82 would invalidate wave count 1.

Gold Elliott Wave Chart Hourly 2015

Within minute wave iii minuette waves (i) and now (ii) are complete. Minuette wave (ii) breaches the upper edge of a base channel drawn about minute waves i and ii, one degree higher.

This wave count now expects a very strong and imminent increase in downwards momentum as a third wave at 5 degrees begins.

At 1,160 minute wave iii would reach 1.618 the length of minute wave i.

Subminuette wave ii moved higher on Friday as a double zigzag. It may not move beyond the start of subminuette wave i above 1,209.22.

Wave Count #4

Gold Elliott Wave Chart Daily 2015

This wave count is identical to wave count 3 up to the low labelled minute wave i within minor wave 3 down.

Minute wave ii may have completed as a rare running flat correction. The problem of the breach of the base channel about minute waves i and ii for wave count 3 is resolved.

MACD hovers about the zero line, indicating low momentum and a lack of volatility. From an Elliott wave perspective MACD often returns to or beyond the zero line during a second wave correction. If this wave count is correct then MACD should show a strong increase in momentum beyond that seen for minor wave 1 downwards.

Pros:

1. Price remains within the base channel about minor waves 1 and 2.

2. The proportion of minute wave ii looks right.

3. The last upwards movement labelled minuette wave (c) fits best as a five wave impulse on the hourly chart.

4. Upwards movement continues to remain within the base channel drawn about minor waves 1 and 2.

Cons:

1. Within minor wave 1 there is gross disproportion between minute waves iv and ii: minute wave iv is more than thirteen times the duration of minute wave ii giving minor wave 1 a three wave look.

2. Minute wave ii has completed as a rare running flat: minuette wave (c) did not manage to move beyond the end of minuette wave (a) by a small margin of 1.66. This is only a small detraction though, this is a second wave within a third wave two degrees higher, which is the kind of situation a running flat may appear in.

3. The upwards wave of minute wave c within minor wave 2 looks like a three on the daily chart, but it should be a five.

If it were to continue as a double flat or combination, then minute wave ii may not move above the start of minute wave i above 1,224.35.

At 1,059 minor wave 3 would reach equality in length with minor wave 1.

Gold Elliott Wave Chart Hourly 2015

Minute wave ii subdivides as a running flat. The subdivisions fit perfectly and the truncation is small. This is acceptable.

Upwards movement for minuette wave (c) ended just short of the blue base channel copied over here to the hourly chart. Today I have created a parallel copy and pulled it down to sit on the high of minute wave ii. This parallel trend line shows where Friday’s session found resistance.

I am moving the degree of labelling within the last first and second wave correction up one degree, because upwards movement labelled minuette wave (ii) shows up on the daily chart as a small green candlestick it is likely to be minuette wave (ii) and not a lower degree correction.

This wave count now expects an extended third wave is in its early stages. Downwards momentum should increase strongly next week as a third wave at six wave degrees unfolds.

At 1,126 minute wave iii would reach 2.618 the length of minute wave i.

This fits nicely with the lower target for minor wave 3 to reach equality in length with minor wave 1 at 1,059.

If I had to pick a winner it would still be wave count 4. However, it has too many problems for me to have confidence in it. I would wait for price to indicate which count is correct.

This analysis is published about 08:06 p.m. EST.