All three daily Elliott wave counts remain valid.
The invalidation / confirmation point may now be moved lower today.
Summary: Some more downwards movement next week looks most likely, to about 1,279. If this target is wrong, it may be a little too low. In the short term, a new high now above 1,330.01 would be confirmation that the correction is likely over and the next wave up has begun.
New updates to this analysis are in bold.
Last weekly charts are here.
Grand SuperCycle analysis is here.
DAILY ELLIOTT WAVE COUNT
Primary waves 1 and 2 are complete. Thereafter, this wave count differs from the two alternates.
This main wave count will expect primary wave 3 to be longer than primary wave 1. Because this is very common, this is the main wave count and it expects the most common scenario is most likely. At 1,582 primary wave 3 would reach 1.618 the length of primary wave 1.
Only intermediate wave (1) so far is complete within primary wave 3. Intermediate wave (2) may be close to completion. It may find support at the lower edge of the base channel drawn about primary waves 1 and 2. Intermediate wave (2) may not move beyond the start of intermediate wave (1) below 1,200.07
Primary wave 3 may only subdivide as an impulse.
Minute wave iv may not move into minute wave i price territory above 1,330.01. If price moves above 1,330.01 in the short term, then it may also be possible that minute wave iii is not over. No second wave correction within minute wave iii may move beyond the start of its first wave above 1,356.85. A new high above 1,356.85 would invalidated any continuation of minute wave iii and provide further confidence to the alternate wave count.
At 1,279 minor wave C would reach 1.618 the length of minor wave A. Price may end downwards movement when it finds support at the lower edge of the maroon base channel drawn about primary waves 1 and 2.
Intermediate wave (2) may not move beyond the start of intermediate wave (1) below 1,200.07.
Primary wave 2 lasted 56 days (one more than a Fibonacci 55). So far intermediate wave (2) is more brief in duration. It has lasted 38 days and may be just a few days away from completion.
Draw a small channel about minor wave C, using Elliott’s technique, and copy it over to the hourly chart.
HOURLY ELLIOTT WAVE COUNT
Minor wave C must subdivide as a five wave structure. This wave count would be confirmed with a new low below 1,310.84.
Minor wave C still needs more downwards movement. Within minor wave C, minute wave iii is now complete. Minute wave ii was a deep zigzag, so to exhibit alternation minute wave iv may be a more shallow sideways structure and would most likely be a combination, flat or triangle. Minute wave iv may not move into minute wave i price territory above 1,330.01.
When minute wave iv is over, then the target may be calculated at minute degree also. At that stage, it may change or widen to a zone. If it changes, it may be moved upwards.
ALTERNATE DAILY ELLIOTT WAVE COUNT
The duration of minute wave ii now gives this wave count the wrong look. Lower degree second waves should be more brief in duration than second waves of a higher degree. Here, minute wave ii has lasted 19 days, minor wave 2 lasted 11 days, and intermediate wave (2) lasted 6 days.
At 1,437 intermediate wave (3) would reach equality in length with intermediate wave (1). At 1,552 intermediate wave (3) would reach 1.618 the length of intermediate wave (1).
Minute wave ii may not move beyond the start of minute wave i below 1,310.84.
A new high above 1,356.85 would add further confidence to this wave count. At that stage, alternate ideas for the main wave count would be invalidated.
ALTERNATE HOURLY ELLIOTT WAVE COUNT
A final fifth wave down would still be required for this alternate wave count. Upwards movement for Friday’s session will not subdivide as a five; it fits only as a three because of the deep spike labelled sub micro wave (B).
Friday’s session would have to be another fourth wave correction for this alternate.
After a slight new low, then this alternate wave count would expect upwards movement.
A new high above 1,339.48 is required for confidence in this wave count. At that stage, a third wave up at four degrees should be expected to be in the very early stages.
ALTERNATE III DAILY ELLIOTT WAVE COUNT
It is possible that primary wave 3 is over and shorter than primary wave 1. Primary wave 3 shows stronger momentum and volume than primary wave 1 (see technical analysis weekly chart).
If primary wave 3 is over, then the current consolidation for Gold would be primary wave 4.
Primary wave 2 was a relatively shallow 0.35 expanded flat correction. Primary wave 4 may be unfolding as a deeper zigzag which would exhibit perfect alternation.
Primary wave 4 may not move into primary wave 1 price territory below 1,282.68.
Primary wave 5 would be limited to no longer than equality in length with primary wave 3, so that the core Elliott wave rule stating a third wave may not be the shortest is met. Primary wave 5 would have a limit of 174.84.
This wave count expects more downwards movement to complete a five wave impulse for intermediate wave (C) in the same way as the main wave count expects a five wave impulse down to complete minor wave C. Only the degree of labelling differs; this wave count is one degree higher.
The hourly chart would be exactly the same except for the degree of labelling.
It is also possible that primary wave 4 may be a regular contracting triangle. If sideways movement continues in an ever decreasing range, then that idea would be published. At this stage, a zigzag looks more likely because the subdivisions have a slightly better fit.
A strong downwards week with an increase in volume supports the main and alternate III wave counts. Overall, volume is still declining and price remains range bound.
The prior two green weekly candlesticks had long upper shadows which was bearish.
Price may find some support about 1,310.
On Balance Volume at the end of last week has come down to find support at the purple trend line. This may help to stop price falling much further.
RSI is not extreme. There is some hidden bullish divergence with price and RSI: RSI has made a lower low below the low of 25th of July but price has made a higher low. This indicates some weakness to this downwards movement. It is more likely to be a smaller correction than a sustainable trend.
Overall, price remains range bound with resistance about 1,375 and support about 1,310 – 1,305. This range bound period began back on 7th of July. During this range bound period, it is the two upwards days of 8th of July and 26th of August which have strongest volume suggesting an upwards breakout is more likely than downwards. This supports all three Elliott wave counts.
The long lower wick of today’s candlestick is bullish as is the colour. However, the decline in volume is bearish; this upwards movement for Monday is not supported by volume, so it is more likely a counter trend movement (within a small downwards swing within the larger consolidation) than the start of a more sustainable upwards swing.
The 55 day moving average may provide some support here.
On Balance Volume may find resistance at the purple line. This may assist to halt the rise in price. A break above the purple line would be a reasonably strong bullish signal.
RSI is not extreme. There is room for price to rise or fall. There is no divergence today between price and RSI to indicate weakness.
ADX continues to decline and the +DX and -DX lines are whipsawing about each other. ADX indicates this market is not trending. ATR agrees as it too continues overall to decline.
Stochastics is oversold. Price has not yet reached support at 1,310 though, so a little more downwards movement from price may be expected before this downwards swing is over. This approach expects the same movement next as the main Elliott wave count.
Bollinger Bands are widening now for three days in a row. A trend may be beginning to return. If it is, then it would be down. However, this contradicts ADX and ATR.
Overall, the decline in volume for Monday suggests a little more downwards movement ahead for price to find support about 1,310 – 1,305 to end this downwards swing.
This analysis is published @ 09:16 p.m. EST.
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