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The short term target for Friday was 1,180. Price fell short of the target reaching only 1,187.36. Downwards movement ended perfectly at the lower edge of the pink parallel channel on the daily and hourly chart.

The wave count remains the same.

Click on the charts below to enlarge.

Gold Elliott Wave Chart Daily 2013

Gold is still within a large fourth wave correction at primary wave degree which is incomplete. To see a full explanation of my reasoning for expecting that primary wave 4 is not over and is continuing see this.

Primary wave 2 was a rare running flat correction, and was a deep 68% correction of primary wave 1. In order to show alternation in structure primary wave 4 may be a zigzag, double zigzag, combination, triangle or even an expanded or regular flat. We can rule out a zigzag because the first wave subdivides as a three. This still leaves several structural possibilities.

The downwards wave labeled intermediate wave (B) is now over 90% the length of the upwards wave labeled intermediate wave (A). Primary wave 4 may be a flat correction, but it may also still be a combination or triangle as there are still several different structural possibilities.

At 1,167.73 intermediate wave (B) would be 105% the length of intermediate wave (A), and primary wave 4 may be an expanded flat correction. Expanded flats normally have C waves which move substantially beyond the end of the A wave, and which are often 1.618 and sometimes 2.618 the length of the A wave. If 1,167.73 is reached and passed then the subsequent upwards wave for intermediate wave (C) may reach well above 1,433.83.

Within minor wave C there was no Fibonacci ratio between minute waves iii and i. This makes it more likely we shall see a Fibonacci ratio exhibited between minute wave v and either of i or iii. At 1,159 minute wave v would reach equality in length with minute wave iii. This lower target allows enough room for minute wave v to complete.

Downwards movement has breached the parallel channel drawn about intermediate wave (B) downwards, and it has found support at the next trend line.

Draw a parallel channel about minor wave C downwards with the first trend line from the highs labeled minute waves ii to iv, then place a parallel copy upon the low labeled minute wave iii. Downwards movement is finding support at the lower edge of this channel.

When the channel about intermediate wave (B) is finally breached by upwards movement then I would consider that final confirmation that intermediate wave (C) is underway.

Primary wave 4 may not move into primary wave 1 price territory. This wave count is invalidated with movement above 1,532.90.

GOLD Elliott Wave Chart Hourly 2013

The target for subminuette wave iii was not reached, and the target for minuette wave (iii) also was not reached. Upwards movement on the daily chart ended as a green candlestick, so although I was expecting a later end to minuette wave (iii) it is extremely likely to be over already.

Downwards movement found strong support at the lower edge of the pink channel copied over here from the daily chart.

Upwards movement for Friday is very unlikely to be subminuette wave iv because it is showing up very clearly on the daily chart. It is most likely to be minuette wave (iv).

This leaves subminuette waves ii and iv out of proportion on the hourly chart though. I have looked at alternate ways to see minuette wave (iii) and there is more than one way to label this downwards movement. I will leave it as it is though because for the movement labeled subminuette waves i and ii the subdivisions fit best like this.

Minuette wave (ii) was a relatively deep 66% zigzag correction. Given the guideline of alternation I would expect minuette wave (iv) to be more shallow, ending about the 0.382 Fibonacci ratio, and to not be a zigzag.

However, alternation is a guideline not a rule. Sometimes we see alternation in both depth and structure, sometimes we see alternation in only one of these two. If both second and fourth waves take the same structure (which does sometimes happen) then we may see alternation within the structures, such as different proportions between A and C waves.

At this stage it looks like minuette wave (iv) may be unfolding as a zigzag also. However, another possibility should be considered: if we move the degree of labeling within minuette wave (iv) down one degree the unfolding zigzag may only be subminuette wave a within a flat correction, or subminuette wave w within a double.

When Monday’s session is over I will consider this alternate idea, and the colour of the candlestick for Monday will be a deciding factor. If Monday gives a green candlestick then it may be more likely minuette wave (iv) would be over as a single zigzag. If Monday gives a red candlestick then it may be more likely that minuette wave (iv) will continue for another day (possibly two, but less likely) as a flat correction or double combination correction.

Within minuette wave (ii) there was no Fibonacci ratio between subminuette waves a and c, with subminuette wave c longer than subminuette wave a. So far within minuette wave (iv) this structure is incomplete, and I would expect it to move higher to start the next trading week. At 1,210 subminuette wave c would reach 1.618 the length of subminuette wave a, and also at 1,210 micro wave 5 within subminuette wave c would reach equality in length with micro wave 1.

When this upwards zigzag is complete then I will have an alternate hourly wave count which looks at the possibility that it is only the start of minuette wave (iv). That alternate would expect more sideways movement for another one or two days before the correction is complete.

Draw a parallel channel about minute wave v. Draw the first trend line from the lows of minuette waves (i) to (iii), place a parallel copy upon the high of minuette wave (ii). I would expect minuette wave (iv) to find resistance at the upper edge of that channel.

When minuette wave (iv) is complete then one final wave down may complete the entire structure at intermediate wave degree. When minuette wave (iv) is complete then I will add to the target calculation at minuette wave degree so the final target at 1,159 may widen to a small zone or it may change.

Alternate Daily Wave Count – Triangle.

Gold Elliott Wave Chart Daily Alternate 2013

It is also possible that primary wave 4 may continue as a regular contracting (or barrier) triangle.

A new low below 1,180.40 is also possible for this wave count if the triangle is a running triangle, as about 40% of triangles are.

The expected direction and structure of this next upwards wave is the same, but for this alternate intermediate wave (C) of the triangle may not move beyond the end of intermediate wave (A). The triangle is invalidated with movement above 1,438.83.

The final intermediate wave (E) upwards may not move above the end of intermediate wave (C) for both a contracting and barrier triangle. E waves most commonly end short of the A-C trend line.

All five subwaves of a triangle must divide into corrective structures. If this next upwards movement subdivides as a zigzag which does not make a new high above 1,438.83 then this alternate would be correct.

Triangles take up time and move price sideways. If primary wave 4 unfolds as a triangle then I would expect it to last months rather than weeks.