This Elliott wave count expects Gold is within a grand super cycle correction.
Upwards movement was expected, but not as much as unfolded.
A new low below 1,221.34 invalidated the alternate hourly Elliott wave count and confirmed the main Elliott wave count.
More sideways movement fits the new main Elliott wave count very well, with some adjustment. The larger Elliott wave structure remains the same, and the target changes by $2.
Upwards movement has clarified the situation. Yesterday’s alternate is now the main Elliott wave count, and I have to discard the other Elliott wave count because it no longer fits on the hourly chart and is invalid.
I had expected a little more upwards movement to 1,185 before price turned down. This is not what happened. Downwards movement does fit the Elliott wave count nicely.
Downwards movement continued as expected, but reached well below the target which was at 1,182. A red candlestick was expected for Friday.
Last Elliott wave analysis expected the new week to begin with a continuation of the current correction. Gold remains in a consolidation phase, as expected.
Price made a new low and we have another red candlestick which was expected, although price has fallen $2.84 short of the upper edge of the target zone.
Movement below 1,291.83 confirmed the alternate wave count and invalidated the main Elliott wave count. By a simple process of elimination I now have just one wave count for you today.
Summary: The target for this downwards movement to end is 1,275 to 1,271. It should be over within the next 24 hours. Thereafter, a new wave upwards should begin which should move above 1,345.22.
Click on charts to enlarge.
The main wave count sees primary wave 4 as an incomplete regular contracting triangle. Primary wave 2 was a deep 68% running flat correction. Primary wave 4 is showing alternation in depth and some alternation in structure.
Within the triangle of primary wave 4 intermediate wave (E) is unfolding as a zigzag: minor wave A is a five wave impulse and minor wave B downwards is an incomplete zigzag.
Because there is a clear triangle within this downwards wave of minor wave B this movement cannot be a new impulse to the downside because a triangle may not be the sole corrective structure in a second wave position. The position of this triangle indicates strongly that intermediate wave (E) is incomplete.
If minor wave B gets down as low as the black (B)-(D) trend line it should find very strong support there. Only a small intra-day overshoot could be contemplated if this wave count is correct. Minor wave B may not move beyond the start of minor wave A below 1,240.51.
When minor wave B is complete then I can calculate a target upwards for you for minor wave C. Because I do not know where it begins I cannot do that yet for you. Minor wave C is extremely likely to make at least a slight new high above the end of minor wave A at 1,345.22 to avoid a truncation. Intermediate wave (E) at its end is most likely to fall short of the (A)-(C) trend line. The other possibility is it may overshoot the (A)-(C) trend line and if it does that it may then find final resistance at the upper edge of the big maroon channel copied over here from the weekly chart.
Intermediate wave (E) may not move beyond the end of intermediate wave (C) above 1,392.30.
I can see one alternate possibility today. If primary wave 4 is over at the high labeled minor wave A within intermediate wave (E) then it is possible that primary wave 5 is beginning with a leading diagonal in a first wave position. However, leading diagonals in first wave positions are not very common, and I have never seen a zigzag for a first wave of a leading diagonal which has a triangle in its B wave position. This alternate idea is possible, but I judge it to have a very low probability, maybe as low as 5%. I will only publish this idea if the black (B)-(D) trend line is clearly breached.
The triangle was most likely over at the high labeled minuette wave (e) at 1,303.77. Subsequent movement fits best as a series of first and second waves.
Movements following triangles are most commonly relatively short and brief. At 1,271 minute wave c would reach 0.618 the length of minute wave a. At 1,275 minuette wave (v) would reach equality in length with minuette wave (i).
Minuette wave (iii) is 0.30 short of 1.618 the length of minuette wave (i).
I have drawn two channels on this downwards movement, both using Elliott’s first technique. The green channel about minute wave c is drawn first with a trend line from the ends of minuette waves (i) to (iii), then a parallel copy is placed on the end of minuette wave (ii). I would expect minuette wave (iv), if it continues further, to find resistance at the upper green trend line. When this green channel is clearly breached by upwards movement that shall be earliest indication that minute wave c and so minor wave B in its entirety is over.
Minuette wave (iv) may not move into minuette wave (i) price territory above 1,292.84. When minuette wave (v) downwards is complete then subsequent movement above this point would provide confidence that minute wave c is over because at that point upwards movement may not be just a fourth wave correction within the downwards trend, and so the downwards trend would have to be over.
I would expect minute wave c to end within the next 24 hours.
This analysis is published about 05:38 p.m. EST.
Upwards movement was expected for Friday.
Although the target is close by and the structure is incomplete, I am changing the wave count.
Movement below 1,315.48 invalidated yesterday’s alternate Elliott wave count and confirmed the main wave count. I have more confidence today that a B wave has begun. Continue reading GOLD Elliott Wave Technical Analysis – 26th June, 2014
Movement above 1,257.96 invalidated the main hourly wave count and was allowed for in the alternate wave count, but the structure was incorrect. I still have the same two wave counts for you. The structure at the hourly chart level is exactly the same, the invalidation point is the same, and the channel to provide resistance is the same.
Summary: The correction is incomplete. Price should move higher and sideways for another one or two days before the downwards trend resumes.
This analysis is published about 6:30 p.m. EST. Click on charts to enlarge.
Main Wave Count.
Gold is still within a large fourth wave correction at primary wave degree which is incomplete.
Primary wave 2 was a rare running flat. Primary wave 4 is unlikely to be a flat correction because it is likely to show structural alternation with primary wave 2.
Primary wave 4 is most likely to be completing as a double combination: zigzag – X – second structure. The second structure labeled intermediate wave (Y) is most likely to be a flat correction. Within the flat correction minor wave B must reach a minimum 90% the length of minor wave A at 1,201.98.
If downwards movement does not reach 1,201.98 or below then intermediate wave (Y) may not be a flat correction and may be a contracting triangle. I will keep this alternate possibility in mind as this next wave down unfolds. If it looks like a triangle may be forming I will again chart that possibility for you.
It remains possible that primary wave 4 in its entirety is a huge contracting triangle. This alternate idea is published at the end of this analysis daily.
Overall a double combination for primary wave 4 should take up time and move price sideways, and the second structure should end about the same level as the first at 1,434. Primary wave 4 may not move into primary wave 1 price territory. This wave count is invalidated with movement above 1,532.90.
Within intermediate wave (Y) minor wave B downwards is incomplete. It may be a single zigzag as labeled here. If it is a single zigzag then minute wave c is unfolding as a five wave impulse. Within the impulse minuette wave (ii) may not move beyond the start of minuette wave (i) at 1,293.47. At 1,178 minute wave c would reach equality in length with minute wave a.
This is the main wave count because minute wave a fits perfectly and best as a five wave impulse. The alternate wave count sees this movement as a three wave zigzag.
Within minute wave c downwards when the next wave down is complete then this main wave count will diverge from the alternate. This main wave count would then expect a fourth wave correction and the alternate would then expect downwards movement to be over. The point of differentiation at that stage would be 1,241.12.
I have drawn a channel about minor wave B downwards: draw the first trend line from the start of minute wave a to the end of minute wave b, then place a parallel copy upon the end of minute wave a. I will expect downward movement to find support at the lower end of this channel due to this being the most common place for minute wave c to end. Minuette wave (ii) within minute wave c should find resistance at the upper edge of the channel, if it reached up that high.
Upwards movement can only be a continuation of minuette wave (ii). Yesterday’s hourly chart for this wave count was wrong.
At this stage I would expect minuette wave (ii) to be completing as a double combination: flat – X – zigzag, with subminuette wave x as regular contracting triangle.
Within subminuette wave y micro wave B may not be complete and could move lower. It may not move beyond the start of micro wave A at 1,252.43.
I would expect micro wave C to most likely make at least a slight new high above the end of micro wave A at 1,263.72 to avoid a truncation. But I would not expect it to move much higher than this, because minuette wave (ii) is a combination and their purpose is to move price sideways not to deepen a correction. This one already has a shallow slope. I would not expect the slope of minuette wave (ii) to increase.
I have drawn a best fit channel about this correction. Once micro wave C may be complete (as soon as a new high above 1,263.72 is seen) then the invalidation point at 1,252.43 no longer applies. At that stage I would use the channel as first indication of a trend change; when this channel is clearly breached by downwards movement then a third wave may be underway. At that stage price movement below 1,241.16 would provide full and final confidence that a third wave is underway.
When minuette wave (ii) is complete then I can calculate a target for you for minuette wave (iii). I cannot do that today.
Minuette wave (ii) may not move beyond the start of minuette wave (i) above 1,293.47.
Alternate Wave Count.
If within minor wave B downwards the first wave is a three wave zigzag and not a five wave impulse then minor wave B may be completing as a double zigzag, with minute wave x a nine wave triangle. This means that the current downwards movement may be completing as a zigzag and not an impulse. This may explain the sideways movement of the last few days quite nicely. The overall direction is the same as I still expect more downwards movement.
This alternate has a lower probability than the main wave count because when the downwards wave for minute wave w is seen as a three it does not fit as neatly with momentum and the Fibonacci ratios are not as startlingly good as the main wave count.
Within minute wave y once minuette wave (b) is complete then minuette wave (c) downwards would be the final movement to complete minor wave B. At that stage subsequent movement above 1,241.12 would confirm this alternate wave count and invalidate the main wave count. But that is still weeks away at this stage.
Within minute wave y minuette wave (b) would be incomplete on the hourly chart. It may not move beyond the start of minuette wave (a) above 1,293.47.
If the next piece of downwards movement does not show a strong increase in downwards momentum then this alternate would be an excellent explanation.
At this stage there is absolutely no difference in the short term expectation, invalidation points, short term structure or trend channels between the main and alternate wave counts.
I have provided some more detail on this chart for you for subminuette wave w, which was the source of my mistake on yesterday’s analysis.
Daily – Triangle.
It remains possible that primary wave 4 in its entirety is a huge regular contracting triangle.
So far one of the five subwaves of the triangle subdivides into a double zigzag. All the other four subwaves must then be simple corrections, and three of them must be single zigzags. The fourth may be another type of simple A-B-C correction, and most commonly it would also be a zigzag.
Intermediate wave (D) would most likely be incomplete for the triangle to have a typical look. Intermediate wave (D) may end between 1,233 and 1,213, 75% to 85% the length of intermediate wave (C), which in my experience is a typical wave length for a triangle subwave.
Intermediate wave (D) may not move beyond the end of intermediate wave (B) for a contracting triangle. For a barrier triangle intermediate wave (D) may end about the same level as intermediate wave (B) as long as the B-D trend line remains essentially flat. In practice this means that intermediate wave (D) may end very slightly below the end of intermediate wave (B). This lower invalidation point is not black and white. This is the only Elliott wave rule which is not black and white.
Intermediate wave (E) may not move beyond the end of intermediate wave (C) for either a contracting or barrier triangle.